In the midst of a progressively deteriorating political as well as economic scenario in the country, the Pakistan Stock Exchange (PSX) experienced another week of tumultuous trading as anxious investors searched for substantial signs of positivity. Despite this, they ultimately got some relief toward the end of the preceding week. This was primarily due to the decision made by Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan to postpone the sit-in in the nation’s capital, which helped ease political tensions to some extent. As a direct consequence of this, the key KSE-100 index finished the week at 42,861, reflecting a loss of 239 points, which corresponds to a percentage decline of 0.56.
Concerns over the IMF loan programme amid dwindling foreign exchange reserves and growing political noise weighed on investors’ confidence. However, some recovery was observed in the last few trading sessions as the PTI chief decided to postpone the sit-in and the government increased the prices of petroleum products, thus paving the way for the IMF programme. Some recovery was observed in the last few trading sessions as the PTI chief decided to postpone the sit-in and the government increased the prices of petroleum products.
As a result of the State Bank of Pakistan (SBP) increasing the key policy rate by 150 basis points to an 11-year high of 13.75 percent, the benchmark KSE-100 index dropped by approximately 1,150 points during the first two trading days of the week. This caused the week to start off on a negative note. The weakening of the Pakistani rupee in comparison to the United States dollar in the context of rapidly diminishing foreign exchange reserves continued to plague the trading mood at the bourse, which prevented bulls from entering the market.
In general, it was found that investors were looking for bright spots in an otherwise bleak atmosphere. However, the index staged a U-shaped recovery in the last few trading days of the week, adding a total of almost 911 points as unsettled investors discovered some source of optimism for the first time in a while. According to research by Arif Habib Limited, “In the approaching week, the market may stay nervous due to the political strain, as the PTI has given six days to the government to announce elections.”
According to the report, “however, it appears that the government’s removal of subsidy on fuel and electricity will win IMF’s approval,” and the report continued by saying that “once the package comes through, other sources of foreign exchange should also open up, which will be a positive sign for the market.” During the period under consideration, the typical daily volume of trading rose by 27 percent week-on-week to a total of 281 million shares, while the typical daily value of trading decreased by 26 percent week-on-week to a total of $39 million.
Technology and communication contributed positively (66 points), as did refineries (40 points), automobile assemblers (32 points), oil and gas marketing enterprises (15 points), and food and personal care goods (14 points). On the other hand, industries such as fertilizer (132 points), commercial banks (76 points), cement (56 points), oil and gas exploration businesses (41pc), and electricity generation and distribution (41pc), were among those that contributed negatively (29 points).
TRG Pakistan (64 points), Millat Tractors (34 points), Habib Bank Limited (30 points), Avanceon Limited (23 points), and Cnergyico PK all made strong contributions to the stock price (19 points).
On the other hand, the Fauji Fertiliser Company (63 points), Engro Fertilisers (57 points), Lucky Cement (48 points), Hub Power Company (39 points), and Oil and Gas Development Company each made a contribution that was negative (30 points).
This week saw a total of $1.5 million in foreign sales, which is a significant decrease from the previous week’s net sales of $6.1 million, which were recorded in foreign markets. There was significant selling activity in cement manufacturers (1.8 million dollars) and banks (1.4 million dollars). On the domestic front, the largest buyers were individuals, who spent 11 million dollars, followed by proprietary trading brokers, who spent 2.9 million dollars.
The trade deficit reached $39.3 billion this week, the State Bank raised the rates for the Export Finance Scheme (EFS) and the Long-Term Financing Facility (LTFF) by 2 percent, and raised the key policy rate by 150 basis points to 13.75 percent. Additionally, the minister for commerce expressed interest in enhancing trade ties with the European Union, and the finance ministry stopped public sector enterprises from depositing funds in private banks. These are just some of the major news stories from the past week.