Political uncertainty following the announcement of the long march kept the market under pressure during the week ended on October 28, 2022, clouding Pakistan’s long-awaited exit from FATF’s grey list.
Participation in the market remained lackluster, with daily volumes averaging 213.8 million shares during the week as compared to 228.4 million shares a week ago.
The benchmark Index lost 1,073.15 points, depicting a 2.5%WoW decline. The PKR continued to lose value against the US$, depreciating 0.7% during the week.
Other major news flows during the week included: 1) Release of US$1.5 billion confirmed by Asian Development Bank, 2) Imran Khan’s disqualification in Toshakhana case, 3) Pakistan requested China for rollover of US$6.3 billion debt, 4) Services trade deficit declines 26%YoY to US$647 million in first quarter , 5) FBR tax collection exceeded recorded PKR2 Trillion Tax collection, 6) Chinese firm mulls US$4.5 billion investment in refinery project, and 7) Saudi investment of US$12 billion.
Sector-wise, the top performing sectors included: Sugar & Allied Industries, Textile Weaving and Vanaspati & Allied industries, while the least favorite sectors were: Woolen, Close-end Mutual Funds and Leather & Tanneries.
Stock-wise, top performers were: FABL, EFERT, DAWH, JVDC and AICL, while laggards included BNWM, YOUW, TGL, ANL and TRG.
Flow wise, Other Organizations were the major buyers with net buy of US$2.2 million, followed by Companies (US$1.4 million), while Mutual Funds were major sellers during the week, with a net sell of US$3.3 million, followed by Individuals with a net sell of US$2.4 million.
The market is expected to remain range-bound in the near future, as pressure on the PKR continues to be a cause for concern in the capital markets.
Furthermore, the long march, and the ensuing political uncertainty, is expected to keep market movements in check. Moreover, the economic slowdown in the country—an intended outcome of the SBP’s contractionary policies—and the adverse effects of the floods are likely to keep corporate earnings marred. Investors are advised to stay cautious while building new positions in the market.