Stocks set for more records on rate, earnings bets

KARACHI: The stock market is set to extend its recording-breaking rally in the coming week, as investors bet on a steady interest rate and attractive earnings prospects for some sectors, analysts said on Saturday.

Brokerage Arif Habib Limited said during the outgoing week, the sentiment remained robust since the IMF board meeting is now set to be on January 11, 2024.

Additionally, Pakistan and Saudi Arabia have agreed upon investment modalities during the week, which will pave way for signing of free trade agreement with GCC in future.

Moreover, petroleum sales witnessed 9 percent month-on-month jump in Nov’23. Furthermore, urea and DAP offtake showcased a healthy growth of 33 percent and 26 percent month-on-month, respectively. Whereas, the cement dispatches decreased by 2 percent year-on-year amd 8 percent month-on-month in Nov’23.

Meanwhile, SBP’s reserves plummeted by $237 million, reaching $7 billion. During the week rupee closed at 283.87 against dollar, appreciating by Rs 1.09 or 0.38 percent week-on-week.

Overall, the market closed at 66,224 points, swelling up by 4,532 points or 7.3 percent, which is highest ever weekly point-wise return. "Moreover, KSE-100 became the world’s best performing market on weekly basis," the brokerage said.

Sector-wise positive contributions came from commercial banks (1,704 ), oil & gas exploration Companies (997 points), fertilizer (387 points), oil & gas marketing companies (333 points) and power generation (166 points).

The sectors which mainly contributed negatively were automobile assembler (19 points), and cement (11 points). Scrip-wise positive contributors were PPL (388 points), HBL (320 points), OGDC (294 points), MARI (282 points), and BAHL (271 points). The scrip-wise negative contributions came from LUCK (70 points), MTL (26 points), SYS (7 points), IBFL (7 points), and FATIMA (5 points).

Foreigner buying continued during this week, clocking in at $11.2 million compared to a net buy of $17.5 million last week. Major buying was witnessed in banks ($4.3 million) and all other sectors ($2.4 million).

On the local front, selling was reported by banks and DFIs ($13.0 million) followed by individuals ($3.7 million). Average volumes arrived at 1,026 million shares (up by 64 percent week-on-week) while the average value traded settled at $118 million (up 48 percenr week-on-week).

The brokerage house expected the market to retain the positive momentum in the coming week. The monetary policy announcement is scheduled in the upcoming week, where we expect policy rate to remain unchanged at 22 percent. Furthermore, the scrips continue to trade at attractive levels, which could further entice investors.

Over the last ten years, seven times the market has closed positively in the month of December. Keeping in view the momentum, brokerage house expected the

market to close positively this month.

Topline Securities said that 7.35 percent is the weekly gain at PSX in the outgoing week, reflecting straight 10 weeks amazing winning streak.

It said that investor participation in market continued to remain on a higher side as average daily traded volume and value stood at 1,026 million shares and Rs34 billion, respectively.