KARACHI: The Pakistan Stock Exchange (PSX) saw its benchmark index close in green as the feel-good factor returned to the bourse in the outgoing week.

The KSE-100 index rose 345 points during the week and closed at 44,822 points, up 0.8 per cent on a week-on-week basis.

“Building anticipation of the revival of the Intern­ational Monetary Fund (IMF) programme and the likelihood of the civil-military leadership reaching a consensus over the appointment of the new ISI chief fuelled the market performance,” said a note by AKD Securities.

Commercial banks remained outperformers during the week as investors expected further rate hikes in the upcoming monetary policy statement. The banking stocks gained 3.6pc on a weekly basis.

The rise in the banking sector was followed by gains in pharmaceutical and cement stocks, which went up 2pc and 1.6pc, respectively, on a week-on-week basis because of the revision in pricing.

Investors’ participation improved during the week with the average daily traded volume clocking in at 342 million shares against 266m shares a week ago.

Sector-wise, cement prices increased Rs35-45 per bag to Rs690-710 whereas automobile sales jumped 68pc year-on-year to 82,000 units, it said.

News stories that affected the stock trading in the outgoing week included the government agreeing to withdraw general sales tax exemptions worth Rs334 billion to revive the IMF programme. The country also received record $8bn in remittances during the first quarter of 2021-22, up 12.5pc from a year ago. The government retired international Islamic bonds (sukuk) worth $1bn in the outgoing week. Cotton prices increased to Rs14,500 per mound in the local market, expatriates inve­sted $2.4bn in Roshan Digital Accounts and Engro Corporation announced its plan to invest $1.5bn-$1.8bn under the petrochemical policy.

Top performers of the market included Gatron Indus­tries Ltd, which went up 15.6pc on a week-on-week basis, followed by Allied Bank Ltd (14.1pc), Fauji Fert­iliser Bin Qasim Ltd (13.6pc), Habib Bank Ltd (8pc) and Lotte Chemical (7.4pc).

Major laggards were Has­col Petroleum (20.1pc), Kot Addu Power Company (15.1pc), Azgard Nine Ltd (15.1pc), TRG Pakistan Ltd (14.7pc) and Jubilee Life Insurance Company Ltd (10.3pc).

Top volume leaders were WorldCall Telecom Ltd (213m shares), Unity Foods (92.3m shares), TeleCard Ltd (89m), Treet Corporation (81.4m) and Hascol Petroleum (62.6m).

According to Arif Habib Ltd, key short-term risks to the PSX include regional volatility and the ensuing security concerns along with the possible rupee depreciation.

“The KSE-100 is currently trading at a price-to-earnings multiple of 5.2 (2021) compared with the Asia Pacific regional average of 14.7 while offering a dividend yield of about 8.1pc versus 2.2pc.”

Published in Dawn, October 17th, 2021

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