Daily Times

As a result of uncertainty over the resumption of the $6 billion International Monetary Fund (IMF) loan programme, the Pakistan Stock Exchange (PSE) posted decreases on all five trading days in the preceding week.

A new government was put in place and the political situation became clearer, resulting in cautious market behaviour.

Market concerns about the rupee’s depreciation versus the US dollar continued to grow this week, and investors were unable to take new positions because of this.

As a result, the KSE-100 index ended the week with a loss of 1,048.52 points or 2.25 percent.

One explanation for the market’s gloom is the recent news that the International Monetary Fund (IMF) is pushing for tough measures like raising power rates and cutting development spending, according to a report from Topline Securities. As a result of the T-Bill auction, cut-off rates jumped in the range of 55-70 basis points, implying additional monetary tightening.”

After failing to detect any signs of improvement during the previous week, investors’ moods remained bearish. They, therefore, avoided making any fresh purchases and instead chose to remain passive.

Right from the start of the week onwards, profit-booking was clear, particularly due to the weakening of local currency against the US dollar.

Furthermore, the uncertainty surrounding the IMF’s loan programme contributed to a sluggish trading environment at the local bourse.

The World Bank’s decision to lower its global growth projection and the recent rise in energy costs only compounded investors’ concerns and dampened trading activity.

When the International Monetary Fund (IMF) called for the reversal of fuel subsidies, revocation of tax amesty, and enforcement of higher tariffs and taxes in order to recommence the rescue package, investors scrambled to unload their market holdings on Thursday.

To round up a gloomy week, investors opted for profit-taking as a result of the IMF’s demands on the market’s final day of trading.

According to a forecast by Arif Habib Limited, “the market is predicted to be range-bound in the forthcoming week”.

The average daily traded volume plummeted 53pc week-on-week to 225 million shares, while the average daily traded value decreased 39pc week-on-week to $41 million.

Oil and gas exploration (88 points), chemical (31 points), fertilizer (10 points), glass and ceramics (3 points), and textile spinning (all 3 points) were the top-scoring industries (1 point).

Negative contributions came from commercial banks, cement, technology and communication, electricity generation and distribution, and miscellaneous, while positive ones came from miscellaneous and cement (72 points).

Also contributing positively to the stock price were Oil and Gas Development Company (56 points), Fauji Fertilizer Company (45 points), Pakistan Petroleum Ltd. (43 points), Lotte Chemical Pakistan (28 points), and Engro Fertilizers Limited (31 points) (27 points).

Habib Bank Limited (90 points), Bank AL Habib (85 points), Lucky Cement (70 points), Systems Limited (66 points), and Pakistan Services Limited (66 points) all had unfavourable impacts (66 points).

This week saw net selling of $0.97 million, compared to a net buying of $1.29 million in the previous week’s trading session. Food and personal care products (worth $0.14) and commercial banks ($1.74 million) were the two top-selling categories.

Individuals bought the most ($7.03 million), followed by businesses ($0.87 million) in the local market.

There was also the shutdown of China Power Hub Generation Company’s power complex, a rise in Pakistan’s state bank’s reserves, and K-request Electric for an Rs5.27 per unit pricing increase for March.