Pakistan Stock market enjoyed a record- breaking and memorable week in more ways than one. The KSE-100 indexes first time crossed the 50,000 mark and the market capitalization ended at$ 93 billion. The rally was supported by the liquidity provided by the local investors. While the mutual funds, companies, and the non-bank financial institution also remained a key factor in this record breaking rally.
So, what are the top five key factors for the investors for next week?
State Bank Monetary Policy
The factor which will remain the key factor in the profitability of the companies is the unchanged monetary policy of the State bank. The interest rate will remain at 5.75 percent. The lower rate of inflation is the key factor in this decision. Currently, the rate of inflation is 5.20 percent and SBP is predicting less than 6 percent for the year 2017.
How will it affect the profitability of the companies? The higher rate of interest means higher interest expenses for the companies against the bank loans. Un- changed interest policy will be favorable for the net profit of the companies. Consequently, investors will get more profit due to a less operating expense of the companies.
Will Government float shares of power companies?
It was one of the top news of the week that the government will float the shares of its profitable power companies. The cabinet committee took this decision on Friday.
Gujranwala power Distribution Company, which is the only profitable government owned distribution firm at PSX. The company shares will be floated for the purpose of reducing a budget deficit. The government also decided the transfer price for selling remaining stake in Mari Petroleum Company limited. However in that meeting offloading 5% shares of Oil and Gas Development Company was not finalized yet.
The share price of MPCL and the OGDC dropped significantly on Friday. The uncertainty will continue in the next week as well. The investors need to be sure while selling or buying shares of these government owned companies.
Good news from Imperial Chemical industry (ICI) Limited
Finally, it is good news for the investors. The ICI Pakistan Limited which is acquired by the Younas Brother Group has announced its profit. The profit has surged 28% to Rs 1.48 billion in the year ended December 31, 2016.
The increased sale was the reason behind this growth. The earnings per share are Rs 16.11 and Board of Directors has announced an interim cash dividend at Rs 8 per share. The analysts are also forecasting positive news from ICI. So, investors can hold their positions without any fears.
Lucky Cement has announced its net profit
Lucky cement has also announced its financial reports. According to the news, the company has recorded net profit of Rs 4.04billion with first quarter ended September 2016. In the same period last year, the company recorded the net profit of Rs. 3.48 billion in the same period last year.
What are the reasons to invest in the Lucky cement? As the financial reports are suggesting, it’s the best time to invest in the Lucky cement. Earnings per share rose to Rs 11.69 in the period of Jul-sep-2016. In the same period last year, the EPS was Rs 10.20.
HUB power company part of coal-fired power plant deal
In collaboration of private power and infrastructure and China Power Hub generation Company limited. The Hub power company signed a deal worth Rs $ 2.5b. This deal is the part of China -Pak economic corridor (CPEC).
According to the analysts’ consensus, the current development in the Hub Company will be a confidence booster for the investors. The company will continue to perform better with solid earnings per share.