Performance of Pakistan Stock Exchange (PSX) remained dull during the week ended on September 09, 2022 as investors’ participation remained subdued. Despite disbursement of IMF tranche the market remained lackluster, amid devastating impact of floods and political noise. News related to the hike in gas tariffs dampened investor’s sentiment. The benchmark index closed almost flat at 41,948 points, down 0.85%WoW. Average daily traded volume for the index was reported at 138.5 million shares, down 34.5%WoW, as investors stayed wary of the market.
Major news flows during the week were: 1) global crude oil prices slipped below US$90/barrel as recession fears mounted, 2) IHC decided to indict Imran Khan in contempt case, 3) Cut-off yield on the 3-month T-Bills inched up to 16%, 4) public debt balloons to over PKR50 trillion in July, 5) GoP likely to hike gas prices, fuel GST under IMF deal, 6) FATF team completed onsite visit to decide Pakistan’s fate, and 7) foreign exchange reserves held by SBP increased to US$8.8 billion after inflow from IMF.
Top performing sectors were: Textile Weaving, Tobacco, Synthetic & Rayon, Transport and Miscellaneous, while the least favorite sectors were: Automobiles Parts & Accessories, Leather & Tanneries, Close-end Mutual Fund, Power Generation & Distribution and Modarabas.
Stock-wise, top performers in the KSE-100 included CHCC, TRG, HCAR, LOTCHEM and IBFL, while laggards were: NATF, FHAM, FCEPL, BOP and THALL.
To five volume leaders for the week were: HASCOL, PRL, WTL, TRG and MLCF.
Flow-wise, Mutual funds were the largest sellers, offloading US$6.12 million followed by Brokers (US$0.23 million). While Companies and Banks were major buyers, with a net buy of US$3.23 million and US$2.6 million respectively. Insurance, NBFC, Other organizations, and individual were buyers with US$0.7 million, US$0.16 million, US$2.18 million and US$0.31 million, respectively.
Despite the IMF tranche market participants stayed on sidelines amid devastation caused by floods. In the later part of the week, cement sectors performed were able to get investor’s attention in anticipation of demand for construction materials amid rehabilitation process. Currency market remained jittery where PKR fell by 4%WoW against greenback. Demand for dollars in informal markets remained high.
Possible financing from multilateral and donor institutions will provide much needed support to FX reserves. Higher inflation print might force central bank to further increase policy rate. Outlook for the market remains hazy for the short-term any development on deregulation of petroleum products will bring the sector in limelight.