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JS Securities Limited – Weekly Review (August 05, 2022)

Karachi, August 05, 2022 (PPI-OT): Positive developments lead to sharp market recovery

Clarity on the political front, sharp appreciation of Pak Rupee against the US$, and positive development on the IMF front led the market rally this week. KSE100 index rallied by 1,946 points to close at 42,096 level. Volumes also witnessed an increase of 79% WoW with an average of 269 million shares/day traded during the week. Key outperformers during the week were Refinery (13%), Engineering (11%), Chemicals (9% and Cements (8%). The week started with the announcement of Election Commission’s verdict on the foreign funding case against PTI, which reduced political noise to a considerable extent.

Moreover, Pak Rupee appreciated 6.7% against US$ reversing the recent trend of sharp depreciation. Along with this, IMF’s resident representative in Pakistan also affirmed that Pakistan has met all prior conditions for the combined 7th and 8th review of the IMF program. The bond yields on Pakistan’s instruments also declined considerably this week, which added to the positive investor sentiments. On the news front, (i) cement dispatches declined 47.7% YoY during July, (ii) CPI was reported at 24.9% – a 14-year high in July, and (iii) petrol prices declined by Rs3.05/ltr while diesel prices increased by Rs8.95/ltr.