Dropping coronavirus cases across the country and positive developments at economic and political fronts are likely to boost investors’ confidence and wane away concerns of rollover week and monetary rate announcement this week. The Pakistan Stock Exchange (PSX) will most probably cross the 46,000-mark on Monday (today) amid favourable budgetary measures for the capital market in the upcoming budget that also kept the momentum green last week. The stock market is likely to remain positive this week on expectation of no change in policy rate in the monetary policy statement scheduled to be announced on May 28 (Friday). The provisional growth of gross domestic product (GDP) for the year 2020-21 has been estimated at 3.94 percent based upon growth estimates of the agricultural, industrial, and services sectors. This development is likely to push up the bourse. On the political front, the Pakistan Tehreek-e-Insaf-led government and Jahangir Tareen group reached an agreement last week where the latter showed readiness for voting for the federal government to pass the upcoming budget 2021-22, which ended the political instability that kept the PSX under pressure last week. According to analysts, the National Command and Operation Centre (NCOC) has advised stricter restrictions and shorter work hours, but has ruled out a complete lockdown on a national level. This will be a sigh of relief for the business community,they said, adding a strong result season appears to be a solid indicator of the economic and corporate recovery. “We expect the market to remain positive in the upcoming week,” stated a report from Arif Habib Limited. “With the monetary policy scheduled to be unveiled next week (May 28, 2021), we foresee the state bank to maintain a status-quo on its benchmark policy rate,” it added. “We believe market performance will be dictated by budgetary expectations while key risk for the medium term depends on a spike in Covid-19 cases,” it added. The benchmark KSE-100 of Pakistan Stock Exchange is currently trading at a PER of 6.7x (2021) compared to Asia Pacific regional average of 16.1x while offering a dividend yield of ~7.2 percent versus ~2.6 percent offered by the region. The stock market posted smart gains last week and the benchmark KSE-100 Index surged 740 points (1.6 percent) to settle at 45,919 points. Average daily traded volume surged 153 percent week-on-week to 609 million shares while average daily traded value increased 84 percent week-on-week to $137 million. In terms of sectors, contribution to the upside was led by cement (+139 points), oil and gas marketing companies (+102 points), fertilizers (90 points), food and personal care products (89 points) and technology and communication (64 points). On the other hand, sectors that contributed negatively included commercial banks (32 points) and power generation and distribution (18 points). Scrip-wise, major gainers were TRG Pakistan (93 points), Unity Foods (68 points), Lucky Cement (62 points), Mari Petroleum (57 points) and Engro Corporation (46 points). Foreigners turned net sellers this week as they offloaded stocks worth $49.4 million compared to a net buy of $1.04 million last week. Major selling was witnessed in all other sectors ($43.4 million) and exploration and production ($7.8 million). On the domestic front, buying was reported by individuals ($37.2 million) followed by companies ($18.1 million).