Pakistan stocks likely to remain bullish next week

KARACHI: Pakistan stocks continued positive momentum during the week ended August 20, 2021, and analysts expect the market to remain positive in the upcoming week too, attributable to crashing global commodity prices and the ongoing results season, which will keep specific companies under the limelight.

“On the other hand, a decline in infection ratio of the novel coronavirus in Pakistan and slowdown in [the] global oil prices would release pressure from external account,” an analyst at Arif Habib Limited said.

The Pakistan Stock Exchange KSE-100 shares index gained 0.91 per cent, or 429.98 points, to close at 47,599.82 points. The KSE-30 shares index gained 1.3 per cent, or 247.79 points, to close at 19,103.04 points.

Investors’ participation remained dull, as average daily traded volume declined 13 per cent to 266 million shares/day, while the value of traded securities averaged at $70 million/day.

Foreign funds and investors offloaded stocks worth $10.82 million during the outgoing week, compared with net buying of $3.95 million in the corresponding week.

Muhammad Waqas at JS Global Capital said that the KSE-100 closed the short trading week at the level of 47,600, a gain of 430 points over last week’s closing.

“Regional geopolitics had an influence on the market earlier in the week after Afghan President [Ashraf Ghani] flew out of the country paving way for [the] Taliban to take control 20 years after a US-led military invasion ousted them. However, the market was quick to more than recuperate the losses.”

On the economic front, large-scale manufacturing (LSM) grew 18.42 per cent during June 2021, taking FY21 LSM growth to 14.85 per cent. This remarkable rise in LSM during the fiscal year was expected given slowed industrial activity during FY20, amid strict lockdowns during the first wave of the Covid-19.

Moreover, the latest data showed that the country received only $90 million as foreign direct investment (FDI) during July as against an inflow of $129 million during the same period last year.

Cement companies in the South Region increased prices by Rs25/bag effective Friday, which led to a rally in the sector on the last trading day of the week where several cement scrips closed at their upper circuits.

“[The] trading activity picked pace on the back of peaceful Taliban takeover of Kabul, decline in international commodity prices, reopening of borders with Afghanistan, and slowdown in Covid-19 infection ratio, resulting in a drastic jump in [the] trading activity,” analyst at Arif Habib Limited said.

“Going forward, we expect the market activities to remain upbeat, owing to the reduced geopolitical uncertainty; therefore, we recommend our investors to take exposure in cements, steel, and auto sectors,” a report issued by Pearl Securities noted.

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