Daily Times

The KSE-100 index climbed past the 42,000-point threshold this week thanks to a number of good announcements and triggers that pushed the market higher.

On a down note, as investors anticipated EC’s verdict in the foreign funding case, the week started out. As a result of the ruling against the PTI, the market enjoyed a healthy uptick in momentum. The final $1.2b loan tranche from the International Monetary Fund (IMF) was fulfilled by hiking the petroleum development charge, which fuelled the market’s optimistic sentiment.

In the interbank market, the rupee strengthened against the dollar, aiding the stock exchange to maintain its upward trend. A 4.19pc rise in the rupee against the US dollar pushed the Indian stock market up 877.26 points on Wednesday, a new record. In addition, the rally gained strength as a result of the approval from the IMF.

All five trading sessions finished in the green. In response to the $2b Chinese loan rollover, investors proceeded to acquire shares in the stock market. The bourse’s winning streak was maintained and the index rose for two consecutive trading days as a result. After softening global energy markets, oil and coal prices fell somewhat last week, boosting the index to a new high of 42,000 points. The KSE-100 index finished the week with a gain of 1,946 points and ended the week at 42,096, higher than the previous week. With an average of 269m shares traded every day, volume grew by 79pc week-on-week. Roughly 13pc of the week’s gains went to the refinery, engineering (11pc), chemical (9pc), and cement (8pc).

The beginning of this week was marked by the announcement of the Election Commission’s decision in the PTI foreign funding case, which significantly lowered political noise. For the first time in months, the Pakistani rupee rose by 6.7pc against the US dollar.

According to IMF’s resident representative, Pakistan had met all preceding conditions for the combined 7th and 8th review of its IMF programme. Pakistan’s bond yields have fallen significantly, which has boosted investor confidence. This month’s headlines include a drop in cement dispatches of 47.7pc year over year; a 14-year-high inflation rate of 24.9pc; and a decrease of Rs3.05 per litre in petrol and Rs8.95 in diesel prices.

With inflation reaching 24.9pc for the month of July 2022, Arif Habib Limited says the market started the week on the wrong foot. Following the IMF’s announcement that Pakistan had completed the final requirement for the loan, the mood improved (incremental hike in petroleum development levy on petrol and diesel).

As a result of the increased optimism, the Pakistani rupee appreciated against the US dollar, closing the week at Rs224.04, up Rs15.33 or 6pc.

July 2022 saw a 47pc drop in the month-on-month trade deficit as well. Even more importantly, WTI crude was trading at $88 a barrel after the OPEC+ summit, down from the previous week’s high of $98.62 per barrel. Cement, fertiliser, chemical, and OMCs all had a beneficial impact on the overall score, with banks contributing the most at 427 points each (106 points). Closed-end mutual funds (3 points) and Real Estate Investment Trusts (REITs) were among the sectors that had negative effects (1 point). Meanwhile, Lucky Cement (155 points), UBL (124 points), MCB (87 points), PSO (78 points), and Colgate-Palmolive were also good to stock contributors (73 points).

FABL (10 points), Mari Petroleum (6 points), ILP (4 points), and AICL made negative contributions, though (3 points). At $0.69m compared to last week’s net buying of $0.57m, this week’s foreign selling was higher than the previous week’s net buying. Banks ($0.9m) and fertiliser ($0.6m) saw the most selling. Brokers’ proprietary ($2.2m) and mutual funds ($1.6m) purchases accounted for the majority of local trading activity.