KARACHI: Bulls retook the stock market in the outgoing week following the return of certainty in the political arena.

According to Arif Habib Ltd, the new coalition government has begun work to tackle the serious issues facing the economy, which led to a positive momentum in the national bourse.

Moreover, the rupee recovered against the dollar at a rapid pace and closed at 181.4, marking a 3.6 per cent appreciation.

Additionally, the country received record-high remittances last month as inflows amounted to $28.3 billion, up 28pc on a month-on-month basis, thanks to the Ramazan/Eid factor.

Although there was a slight correction mid-week, the market sustained its momentum and posted its highest week-on-week increase since April 3, 2020. As a result, the bourse closed at 46,602, up 2,157 points or 4.9pc from a week ago.

Sector-wise, positive contributions came from commercial banking (395 points), fertiliser 292 points, technology and communication (268 points), cement (241 points) and refinery (129 points).

Whereas, sectors that contributed negatively were real estate investment trust (2.19 points), vanaspati and allied industries (1.55 points).

Scrip-wise, positive contributions came from Engro Corporation Ltd (152 points), TRG Pakistan Ltd (136 points), Meezan Bank Ltd (122 points), Habib Bank Ltd (85 points) and Systems Ltd (80 points).

Meanwhile, negative contributors were Colgate-Palmolive Pakistan Ltd (14 points), Faysal Bank Ltd (10.88 points), Fatima Fertiliser Company Ltd (4.74 points), Allied Bank Ltd (3.18 points) and Dolmen City REIT (2.19 points).

Foreign buying was witnessed in the outgoing week as it amounted to $1.29 million versus a net sell of $3.78m in the preceding week. Major buying was witnessed in technology ($2.21m) and fertiliser ($1.16m).

On the local front, selling was reported by mutual funds ($9.89m) and insurance companies ($7.76m). According to AKD Sec­urities, the positive momentum will likely continue in the near term.

The market is currently trading at a price-to-earnings multiple of 4.5, which is fairly low given its historical average. However, the political arena is also heating up with the PTI staging protests across the country, the brokerage added.

“Even though this largely remains a non-event from the stock market’s vantage (point), any escalation in tensions can have a negative impact on the investors’ sentiments. Moreover, the result season is likely to pick up pace in the upcoming week where surprises cannot be ruled out for driving individual stock performance,” it added.

Published in Dawn, April 17th, 2022