Karachi, March 10, 2023 (PPI-OT): Weekly Review
Market witnessed an overall lackluster session while the news of a US$500mn inflow from China, boosted reserves up to US$4.3bn as of 3rd March, thereby instilling investor confidence. However, despite fulfilling further IMF conditions, i.e; imposition of power surcharge and cabinet approval of 25% GST on luxury items, the long-awaited SLA (Staff-Level Arrangement) still hangs in the balance. The KSE-100 index concluded the week at 41,794pts, indicating a gain of 1.1% over the week. The market witnessed a robust level of participation, with daily volumes averaging ~209.3mn shares during the week vs. avg. of ~159.8mn shares in the last week, indicating an increase of 31.0%WoW.
As for the currency, PkR depreciated against the Greenback, losing 0.82% throughout the week to close at PkR280.77/US$ on Friday. Other major news flows during the week included; 1) ’Very close’ to signing IMF agreement, says Dar, 2) Import curbs to be eased after IMF review: SBP chief, 3) Forex manipulation: SBP governor says probe against banks completed, 4) ECP issues schedule for Punjab elections, to be held on April 30, 5) PKR depreciation, borrowing: Debt stocks soar to Rs55trn by Jan-end. Sector-wise, Engineering, Tobacco and Cable and Electrical goods were amongst the top performers, up 7.5%/6.0%/5.2%WoW respectively.
On the other hand, Miscellaneous, Woollen and Textile weaving were amongst the worst performers with a decline of 8.2%/6.9%/3.8%WoW. Flow wise, major net selling was recorded by Mutual Funds with a net sell of US$5.92mn. On the other hand, companies absorbed most of the selling with a net buy of US$10.53mn. Company-wise, top performers during the week were, i) PGLC (up 26.7%WoW), ii) PIOC (up 19%WoW), iii) KTML (up 16.7%WoW), iv) AKBL (up 15.9%WoW), and v) KOHC (up 15.8%WoW), while top laggards were, i) PSEL (down 14.5%WoW), ii) UPFL (down 12.5%WoW), iii) AICL (down 7.1%WoW), iv) BNWM (down 6.9%WoW), and v) SML (down 6.8%WoW).
Outlook
The market is expected to remain range-bound in the near future as already record-high inflation is expected to rise further, leading to another potential hike in the interest rate in the upcoming Monetary Policy Committee meeting scheduled for April 4th. Furthermore, the long-awaited Staff-Level Agreement with the IMF will remain a topic of focus, and if achieved, could potentially bolster investor confidence and lead to euphoria in the market. Hence, we advise clients to stay cautious while building new positions in the market.