Bull run expected on the market

KARACHI: Stock trading commenced on a positive note in the outgoing week. But the market corrected midweek as oil prices crossed $90 per barrel for the first time since 2014, according to Arif Habib Ltd.

The International Monetary Fund (IMF) approved the disbursement of $1 billion while the Economic Coordination Committee approved the textile policy after incorporating certain changes. Furthermore, the fiscal deficit contracted 2.1 per cent to Rs1.37 trillion for the first half of 2021-22.

As a result, the benchmark index closed at 46,079 points after gaining 170 points or 0.4pc on a week-on-week basis.

Sector-wise, positive contributions came from fertiliser (159 points), automobile assembling (55 points), oil and gas exploration (40 points), commercial banking (38 points) and power generation and distribution (34 points).

Sectors that contributed negatively to the index were technology and communication (66 points), cement (49 points), oil and gas marketing (45 points), insurance (36 points) and cable and electrical goods (20 points).

Scrip-wise, positive contributors were Engro Corporation Ltd (86 points), Dawood Hercules Corporation Ltd (61 points), Meezan Bank Ltd (59 points), Engro Polymer and Chemicals Ltd (34 points) and Fauji Fertiliser Company Ltd (33 points).

Main negative contributors were Pakistan State Oil Company Ltd (39 points), Adamjee Insurance Company Ltd (35 points), Systems Ltd (33 points), MCB Bank (21 points) and Pak Elektron Ltd (20 points).

Foreign selling continued in the outgoing week, clocking in at $5.9 million versus a net sell of $4.4m a week ago. Major selling was witnessed in technology ($3.2m) and all other sectors ($1.6m).

On the local front, buying was reported by “other organisations” ($11.1m) and individuals ($3.1m). The daily average volume clocked in at 207m shares, down 28pc week-on-week. The daily average value settled at $46m, down 16pc from a week ago.

According to AKD Securities, investors’ confidence will likely translate into positive performance of the index following the revival of the dormant loan programme with the IMF. The local currency is expected to gain further ground against the dollar as the government aims to raise funds through a Eurobond auction.

“The results season is in full swing where we expect corporate profitability to remain buoyant amid a commodity bull run, robust exports growth and rupee depreciation. With valuations at very attractive levels, the market may be set to post a sustainable bull run,” it added.