Daily Times

The KSE-100 index, a key measure of performance on the Pakistan Stock Exchange, saw choppy trading this week, moving both up and down in response to various encouraging and depressing developments, before ultimately finishing the week in the black.

Investors kept their faith in the imminent return of the IMF credit programme. The bears, however, rallied after hearing about the oil price increase. The market ended the day down on Tuesday as investors considered the implications of the recent rise in the cost of petroleum products.

News of Saudi Arabia’s $3b deposit kept the market buoyant and pushed the index beyond 43,000 points to start the week, which was in line with the performance of the previous week.

Both Saudi Arabia’s Crown Prince Muhammad bin Salman and Pakistan’s Prime Minister Shehbaz Sharif have agreed to cooperate in the fields of investment, energy, and trade, experts said. More importantly, the prime minister is anticipated to propose a long-term LNG contract with Qatar during his visit to Doha next week.

The interbank market saw the rupee’s winning streak versus the US dollar ended on Wednesday. The KSE-100 index managed to post gains despite continuing to be under pressure and fluctuating between negative and positive regions.

Later, the absence of bullish triggers led to dull trading on the KSE-100 index and discouraged investors from initiating new positions.

As a result of the index’s inability to break out of its trading range over the past two days, its upward momentum has stalled. Monday, August 22 (a trading holiday), is when the central bank is expected to publish its monetary policy, and anticipation of this event was a major factor in the market’s downbeat close. In addition, the weekly Sensitive Price Indicator showed inflation at a record high, which contributed to Friday’s disappointing stock market close.

The market gained ground last week, ending at 43,270, an increase of 413 points (0.96pc). According to JS Global analyst Muhammad Waqas Ghani, the index gained 764 points on Monday after reports that Saudi Arabia planned to deposit $3b and provide $100m in monthly support for the purchase of petroleum goods over the next 10 months. This week saw a rise of 51pc in trading volumes, with an average of 519m shares exchanged per day.

While LSM output increased 11.7pc annually in July 2022, textile exports decreased 13pc month-over-month. Due to fewer business days in July 2022, remittances were reported to be 8pc lower compared to July 2021.

The government also said that it would no longer prohibit the import of luxury goods, but that doing so would result in steep taxes. The expert noted that the foreign currency reserves of the State Bank of Pakistan (SBP) increased by $67m, reaching $7.9b. According to Arif Habib Limited, the market opened the week under review above the 43,000 level on the strength of bullish sentiment caused by reports that Saudi Arabia would extend its $3b deposits and provide further help worth $100m per month in terms of petroleum procurement.

LSM numbers also revealed FY22 was a year of growth of 11.7pc compared to the previous year. Midway through the week, investors began cashing in their gains as the anticipated levy of Rs50b in taxes dampened the market mood. On top of that, the value of the Pakistani rupee fell against the dollar again recently.

Financial services (164 points), construction materials (123), information and communications technology (94), electricity generation and distribution (45 points), and consumer goods (food and personal care) all made strong contributions (38 points). The oil and gas industry (with a 74-point negative impact), oil marketing companies (with a 29-point negative impact), and the auto manufacturing industry all played unfavourable roles (23 points).

HBL (101 points), Lucky Cement (85 points), Engro (70 points), Meezan Bank (65 points), and Systems Ltd (65 points) were the top five stock contributors (61 points). The weekly total of $2.78m reflects the continuation of sales to international buyers.