JS Securities Limited – Weekly Review (09 June 2023)

Karachi, June 09, 2023 (PPI-OT): Optimism on Federal Budget FY24 drives KSE-100, up 1.3% WoW

KSE-100 gained momentum this week building upto the release of Federal Budget FY24 with the market closing at 41,904, up 551 points WoW. Sectorwise, Chemicals (up 15% WoW), Oil and Gas (up 8.9% WoW) and Refinery Sector (up 4.2% WoW) out performed during the week while Banks (down 1.6% WoW) and Tobacco (down 6.1% WoW) under performed. Foreigners remained net buyers this week (US$2.1mn) with the highest buying witnessed in the Oil and Gas Sector (US$1.1mn).

On the news front, The GoP is expected to unveil its Rs14.5trn Budget today (Friday) with a consolidated budget deficit target of 6% of GDP, GDP growth target of 3.5% and inflation target of 21%. As per market expectations, SBP in its upcoming MPC meeting on Monday 12th June 2023 is expected to keep interest rate unchanged amid high inflation. SBP reserves declined by US$179mn this week currently standing at US$3.9bn owing to external debt repayments. World Bank in its latest report further slashed Pakistan's GDP forecast from 1.6% to 0.4% for FY23 citing impact of floods, social and political tensions, high inflation and policy uncertainty as key concerns.