JS Securities Limited – JS Research (September 23, 2022)
Karachi, September 23, 2022 (PPI-OT): KSE-100 continues to slide, down 3% WoW
KSE100 witnessed a downward trend throughout the week amid economic and political concerns compounded by the ongoing impact assessment of floods. The market closed the week on a negative note at 40,620, down 1,059pts. Average volumes dipped 9% with 166mn shares traded during the week. Key underperformers were E and P (-6.3%), Refinery (-5.9%) and Power (-5.5%). On the news front, latest estimate for the flood related damage came in at US$30bn where cotton arrivals have also declined by 19% YoY up till mid Sep-22.
LSM numbers for July declined by 16% MoM while CAD for Aug-22 on the other hand contracted by 42% MoM to US$703mn. FX reserves during the last week declined by US$247mn to US$14.1bn. Petrol prices were hiked by Rs1.45 to Rs237.43/liter w.e.f Sept 21, 2022 by the GOP citing fluctuating global oil prices and exchange rate movement.
As a result of monetary tightening, external imbalances and impact of floods, ADB revised its GDP forecast for Pakistan downwards to 3.5% for FY23 from earlier 4.5% whereas GoP revised it down even further to 2% (from earlier target of 5%). On the international front, the US Fed hiked interest rates by 0.75% to fight inflation fuelling fears of a recession.