Staff Report
KARACHI: The Pakistan Stock Exchange (PSX) stayed under pressure throughout the week as economic and political tensions heated up, resulting in low trading volumes and a weekend loss for the benchmark KSE-100 index.
Due to political and economic uncertainties, the trading week started off poorly for investors. On Tuesday, however, the market changed course due to investor excitement following the anticipated $10 billion investment by Saudi Arabia. The index was rescued from the danger zone by the positive.
The market managed to conclude with modest gains on Wednesday despite the fact that investors remained cautious and there were no significant positive triggers. Nevertheless, despite Engro Corporation’s statement that it will repurchase 70 million shares for an estimated Rs20 billion on Thursday, the market fell. The market made an effort to rise but gave in to profit-taking.
After the index fluctuated between the red and green zones during the session, late buying helped the market rebound during the final day’s wild session.
The KSE-100 index ended the week at 41,301, down 397 points (or 0.95%) from the previous week. According to JS Global analyst Muhammad Waqas Ghani, “KSE-100 suffered a negative trend during the week owing to lack of political and economic stability, finishing at 41,301 points, down 1% week-over-week.”
Top underperformers at Stock Exchange
Refineries (-4.5%), chemical businesses (-4%), OMCs (-2.9%), and banks (-1.8%) were the top underperformers in the sector, while textile enterprises (+2.7%) and fertilizer manufacturers (+1.6%) were the key outperformers. According to him, foreigners become net sellers with the greatest sale in banks ($12 million).
In terms of news, the Pakistani government exceeded its goal of Rs1.35 trillion by raising Rs1.62 trillion at the T-bills auction. The lowest level for worker remittances since August 2020 was $2.1 billion in November 2022, according to data, while the State Bank of Pakistan’s (SBP) reserves held steady at $6.7 billion over the past week.
Diesel was reduced by Rs7.5 per liter to Rs227.8, while the price of gasoline was reduced by Rs10 per liter to Rs214.8. On the global front, OPEC remained committed to its 2.3% annual growth forecast for oil demand in 2023, citing China’s relaxation of its zero Covid policy as a key driver of demand.
The JS analyst noted that ADB, on the other hand, reduced its growth target for Asia from 4.9% to 4.6% in 2023. In its report, Arif Habib Limited stated that due to worries over weak economic indicators, the market started off trading on a downbeat note, carrying over the momentum from the previous week.
Given the ADB’s approval of a $554 million financial package for post-flood rehabilitation work, the market briefly turned positive. Additionally, the IMF reported that its discussions with Pakistan regarding the ninth review were fruitful, maintaining the upward trend.
On the other hand, it added, “the market turned negative again in the latter part of the week due to increase in political noise.” Additionally, in November, remittances decreased by 14% from the previous year. Additionally, during October 22, LSM output fell 3.6% month over month and 7.75% year over year.
The SBP’s foreign exchange holdings showed a $15 million decline, falling to $6.64 billion. As a result, the Pakistani rupee lost Rs0.54, or 0.24% week-over-week, to the US dollar, ending the week at Rs224.94.
The index dropped 397 points (or 0.95%) week over week to close at 41,301. Fertilizer and miscellaneous contributed positively to the sector with 164 points each (110 points). Banks (232 points), chemicals (92 points), car assemblers (83 points), power (68 points), and food and personal care products all made negative contributions (61 points).
In terms of stock performance, Pakistan Services (167 points), Systems Limited (132 points), Engro Corporation (115 points), Pakistan Tobacco (20 points), and Oil and Gas Development Company all made positive contributions (10 points). Lotte Chemical (58 points), Hub Power (68 points), Bank AL Habib (68 points), Millat Tractors (77 points), and United Bank (70 points) all made negative contributions (44 points).
According to the AHL report, foreigners continued to sell during the week, resulting in a net selling of $9.6 million as opposed to $6.3 million the previous week.
