The benchmark index of Pakistan Stock Exchange (PSX) lost 684 points during the week ended on January 13, 2023, registering a 1.67%WoW drop to close at 40,323 points.
Overall, participation improved with average trading volumes rising to 183 million shares, from 176 million shares traded in the earlier week, posting an increase of 4%WoW.
The index witnessed an overall volatile week, as news flows of reserves falling below US$4.5 billion dampened overall sentiment, alongside the obvious political noise.
Some respite was witnessed on the back of pledges obtained in the Climate conference in Geneva, as Pakistan succeeded in soliciting commitments of over US$10 billion from the friendly nations and multilateral donors.
Volume leaders of the week were: PPL, WTL, PRL, CNERGY and KEL.
On the currency front, the PKR weakened further, depicting a depreciation of 0.44% with the interbank quote ending at PKR228.15/US$ on Friday.
Other major news flows during the week included: 1) foreign exchange reserves held by State Bank of Pakistan (SBP) sinking to three weeks’ worth of import cover, 2) UAE committing to lend US$1 billion and rolling over an existing US$2 billion loan, 3) Signing of deal signed with SFD to finance oil derivatives worth US$1 billion, 4) CM Punjab sending a dissolution summary of Punjab Assembly to Governor and PTI also announcing to dissolve KPK Assembly on Saturday, and 5) Finance Minister, Ishaq Dar reiterating the country’s commitment to complete the IMF program.
Sector-wise Vanaspati & Allied Industries, Close-End Mutual Fund and Miscellaneous were amongst the top performers, while Leather & Tanneries, Leasing Companies and Pharmaceuticals were amongst the worst performers.
Flow wise, major net selling was recorded by Mutual Funds (US$4.7 million). Individuals absorbed most of the selling with a net buy of US$6.5 million.
Company-wise, top performers during the week were: MTL, PSEL, LOTCHEM, JVDC, and NESTLE, while laggards included: INIL, SRVI, ABOT, NRL, and TRG.
The market is expected to remain under pressure in the near future due to the concerns regarding the country’s external position and uncertainties stemming from the political situation brewing in Pakistan.
Furthermore, the upcoming Monetary Policy Committee meeting scheduled for January 23, 2023 would remain in the limelight.
Any news regarding foreign exchange inflows, whether from the IMF or other bilateral and multilateral sources, would support the market trajectory.
Additionally, clarity on the political landscape in the country would alleviate investor concerns.
Analysts expect the market to remain range-bound until there is further clarity on the economic and political fronts. They continue to advise a cautious approach while building positions in the market.