Daily Times

After winning the distinction of Asia’s best-performing stock market in August 2020, the Pakistan Stock Exchange (PSX) reversed course and became the region’s third-worst performing market.

Investors were upbeat about the upcoming budget statement, which helped keep the Pakistan Stock Exchange positive and conclude the week in the green zone on Friday.

The KSE-100 index declined 5.1pc (or 2,427 points) in the first nine months of the current fiscal year and concluded at 44,929 points on March 31, according to the poll. PSX became the third poorest performing Asian market.

According to market capitalization, refineries were among the hardest-hit industries. In March, the sector’s capitalization dropped from Rs146.56b at the end of June 2021 to Rs66b.

During July-March FY22, the Pakistan Economic Survey 2021-22 found that the cement sector lost 24pc in market capitalization, while the automobile assembly sector lost 13pc.

After Sri Lanka in this fiscal year (July-June FY22), the PSX has been ranked second-worst in the region, according to the latest data. According to Arif Habib Limited, PSX has fallen over 31pc in dollar terms so far, this fiscal year.

It appears that the equity market is in worse shape than previously thought. Over the past year, the benchmark index has fallen by 13.25pc (or 6,376 points). On Friday alone, the KSE-100 index remained bullish despite a weak trading day as investors anticipated a positive budget release for the fiscal year 2023. There was an intraday low of 41,715.05 points and a tight range of movement in the index as it continued.

For the fifth year in a row, foreign investors have withdrawn from the PSX, regardless of the positive or terrible things that have occurred.

According to the National Clearing Company of Pakistan Limited, foreign investors have withdrawn a net $1.61b from Pakistan’s equity market since July 1, 2017. (NCCPL). Pak rupee-dollar parity has always had an impact on foreign investors’ exodus from the domestic stock market, as the currency has depreciated sharply.

Selling pressure was also exacerbated by Pakistan’s MSCI reclassification from Emerging Markets to Frontier Markets, effective December 1, 2021.

For the fiscal year 2022, the KSE-100 index “closed at its highest point (August 23, 2021) at 48,112 points,” according to the Economic Survey.

In September 2021, share turnover peaked, indicating that investors were putting money into the market. Due to geopolitical and domestic political instability in February and March 2022, market activity slowed.”

“The share prices of Meezan Bank and Mari Petroleum both went up. A 28pc decline in tobacco industry growth is largely to blame for Pak Tobacco’s share price decline. According to the Economic Survey, the share price of Nestle has fallen as food and personal care product firms grew at a moderate 1.2pc.