Pakistan Stock Exchange witnessed an overall volatile week ended on December 02, 2022. The uncertainty regarding the International Sukuk payment of US$1.1 billion lingered amongst market participant, dampening the overall sentiment as well as volumes.
Participation in the market remained overall low, with daily average trading volume traded rising nominally to 161.75 million shares as compared to 159.58 million shares traded in the earlier week.
The benchmark KSE-100 Index lost 786 points during the week, depicting a 1.83%WoW fall. The PKR also lost some footing against the US$, depreciating by 0.11% to end at PKR223.69/US$ on Friday.
CPI was still at multi-year highs, at 23.8% for November 2022, lower than expectations, as compared to 26.6% for October 2022.
Trade deficit for November 2022 was reported at US$2.8 billion, down 42%YoY while foreign exchange reserves held by State Bank of Pakistan (SBP) were reported at US$7.5 billion as of November 25, 2022.
On the international front, crude oil remained volatile, averaging at US$85/bbl as the global commodity remained in a limbo on the back of on/off Chinese lockdowns and discussions at European Union to work towards an agreeable price cap on Russian crude.
Other major news flows during the week were: 1) Sensitive Price Indicator (SPI) rose 0.48%WoW, 2) PTI decided to dissolve Punjab and KP assemblies, 3) Finance Minister Ishaq Dar confirmed the receipt of US$500 million from the Asian Infrastructure Investment Bank, 4) SBP raised PKR 214 billion through the auction of market treasury bills against target of PKR 850 billion, 5) Pakistan’s real effective exchange rate (REER), the value of the rupee against a basket of trading partner currencies, rose to 100.4 in October from 90.7 in the previous month.
Sector-wise, amongst mainboard sectors, Miscellaneous, Leasing Companies and Vanaspati & Allied Industries were amongst the top performers. As against this, Close-end mutual funds, Engineering and Cement were amongst the worst performers.
Flow wise, major net selling was recorded by Mutual Funds (net sell of US$6.3 million). Individuals absorbed most of the selling with a net buy of US$4.19 million.
Company-wise, top performers during the week were: PSEL, PGLC, IBFL, HUBC and SRVI, while top laggards included: PIOC, HGFA, CHCC, MLCF, and MUGHAL.
The market is expected to remain range-bound in the near future, with the risk-free rate standing at 16% currently. Equities continue to be unappealing for investors.
News regarding the International Sukuk payment of US$1.1 billion and the foreign exchange reserves position thereafter will be in focus.
Any developments regarding the 9th review by the IMF would be observed keenly, with a positive outcome possibly restoring sentiment regarding Pakistan’s external position. On the flip side market could become under further pressure by political uncertainty.