The Pakistan Stock Exchange (PSX) is likely to remain range-bound in the week starting today (Monday) on the back of possible re-entry of the country in the International Monetary Fund (IMF) programme in the coming weeks as well as the government’s steps to slow down imports and stop dollar’s flight to shield the Pakistani rupee from further falling against the US dollar. The market has gone down for three weeks in a row and a possible reversion is overdue, as there is no major unprecedented problem on the economic side while companies’ fundamentals are also strong. After giving a seven-year high performance of 38 percent return in fiscal year 2020-21, the benchmark KSE-100 Index has ended up being one of the worst-performing markets during July-September 2021 period. The index declined by 2,456 points in the quarter, breaking the positive streak of the last five quarters. Interestingly, out of 2,456 points shed in the whole quarter, around 2,326 points were lost in the last three weeks. Likewise, September 2021 turned out to be the worst month for the stock market after March 2020, as the KSE-100 index plunged by 2,520.14 points during the month. The imminent pressure that the market ill face this week is 9 percent headline inflation against the expected figure of 8.4 percent by different brokerage houses in their reports, surging oil prices and transportation costs, and instability in rupee-dollar parity. However, the weekly inflationary figures showed a slight improvement during the last two weeks. Finance Minister Shaukat Tarin during an interview with a local news channel on Saturday confirmed that Pakistan is going to stop flight of US dollars to Afghanistan by bringing down the limit from $10,000 to $1,000 per person. These steps, besides possible resumption of the IMF programme in coming weeks, are likely to provide a breather to the exchange rate and the stock exchange. On the other hand, shares’ prices have suffered more as compared to the drop in the index level. The market experts said that the index is in an oversold position and shares of some major companies are available at very attractive prices. They view the situation as buying-time. They believe that the market has declined more than warranted, while the decision with the IMF will likely simmer the possibilities of a thaw in US-Pakistan relations while also bringing clarity to several measures to be taken during the current fiscal year, including energy tariff hikes and fiscal improvements. Moreover, FATF is due to meet in the latter part of the month, wherein Pakistan may be removed from the grey list due to strong compliance performance. Further, developments in relations with the US are likely to keep the market volatile in the near term, they opined. Again, the recent statement of the US Secretary of State recognising Pakistan’s crucial part in making talks with the Taliban successful may ease off investors’ concerns. The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.3x (2021) compared to Asia Pacific regional average of 14.3x while offering a dividend yield of 8.2 percent versus 2.3 percent offered by the region. The sector-wise negative contributions last week came from commercial banks (117 points), pharmaceuticals (47 points), fertilizers (32 points), cement (25 points), and insurance (21 points). Whereas, sectors which contributed positively were oil and gas exploration companies (35 points), and oil and gas marketing companies (20 points). Foreign selling remained $21.9 million against a net buying of $6.7 million during the preceding week. Average volumes clocked in at 355 million shares (down by 8 percent WoW) while average value traded settled at $76 million (up by 3 percent WoW).