KARACHI: Following the news flow, the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) fluctuated between the red and green for the majority of the sessions during the previous futures rollover week. It increased just 73 points, or 0.18 percent, to close at 40,150 points, maintaining its previous level.
The stock market started the week off poorly as investors remained on edge due to political and economic uncertainty.
In addition, amid doubts about the release of the International Monetary Fund (IMF) tranche, the Pakistani rupee continued its free fall against the US dollar (reaching an all-time low of 239.94).
Volatility increased as the current account deficit increased by 39% year over year in June 2022 to reach $2.3 billion.
However, the mood changed for the better after finance minister Miftah Ismail emphasised that all prior actions for the revival of the IMF programme had been taken.
Additionally, the acting governor of the State Bank of Pakistan (SBP) echoed the finance minister’s remarks and refuted claims of a near-term default on international payments.
Additionally, Fitch and Moody’s expressed confidence that the IMF would soon disburse $1.2 billion. The bourse was kept in check, despite S&P Global downgrading Pakistan’s credit outlook from neutral to negative.
Other significant events this week included ICI Pakistan’s intention to buy a 75% stake in Lotte Chemical, a $754 million decline in SBP’s foreign exchange holdings to $8.6 billion, approval by the cabinet of a power tariff increase of Rs. 3,50 per unit, a decision by the ECC to raise the price of RLNG for sectors with an export focus to $9 per MMBTU, and approval by the ECC of a revision in dealer margins for MS (petrol) and hi
Foreign purchases this week totaled $0.57 million, compared to a net purchase of $1.64 million last week. Technology saw $3 million in purchases, and textiles saw $6.44 million.
On the domestic front, individuals ($2.04 million) and insurance companies ($1.78 million) both reported significant selling.
While the
major week’s winners and losers
Technology (+176 points), banks (+138 points), exploration and production (+58 points), chemicals (+37 points), and oil marketing companies (+16 points) all made positive sectoral contributions.
Fertilizer (-231 points), car assembler (-73 points), and cement made negative contributions, on the other hand (-35points).
TRG Pakistan (+132 points), Lotte Chemical Pakistan (+51 points), Pakistan Oilfields (+47 points), Bank Alfalah (+46 points), and HBL (+30 points) were the top gainers in terms of scrip.
Engro Fertilizer (-88 points), Engro Corporation (-84 points), Indus Motors (-45 points), and Fauji Fertilizer Company were among the biggest losers (-44 points).
upcoming week’s forecast
We expect the market to remain positive in the coming weeks since valuations have opened up to attractive levels, according to a report from AHL.
Additionally, it added, “With the ongoing result season, certain sectors and scrips are expected to stay under the spotlight,” advising investors to carefully choose blue-chip stocks that have solid fundamentals.
According to the brokerage house, “The KSE-100 is currently trading at a PER of 4.1x (2022) compared to the Asia-Pacific regional average of 12.2x while offering a dividend yield of 9.6 percent versus 2.9 percent offered by the region.”
