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JS Securities Limited – Weekly Review (December 02, 2022)

Karachi, December 02, 2022 (PPI-OT): KSE100 reacts to unexpected rate hike, down 2%

KSE100 opened the week on a pessimistic note after the SBP’s unexpected announcement of a rate hike of 100bp taking the policy rate to 16%. The market witnessed a partial recovery in the following days closing the week at 42,150 points, limiting losses to 1.8% WoW. Sector wise, Power sector (up 0.6%) remained key outperformer whereas Cements (down 5.9%) and Oil and Gas (down 1.7%) remained key underperformers during the week. On the news front, crude oil prices increased during the week as the OPEC+ delegates did not rule out deeper production cuts in the group’s upcoming meeting over the weekend. On the local side, political noise remained elevated.

IMF country representative Esther Perez Ruiz confirmed that virtual engagement with Pakistan has resumed and a visit from IMF’s team can be expected soon. CPI for Nov-2022 clocked in at 23.8% YoY averaging 25.14% for 5MFY23 as against 9.32% during SPLY. Tax collection improved as FBR achieved both its monthly and 5-month target with revenues of Rs538bn and Rs2,688bn respectively. SBP reserves during the week declined by US$327mn to US$7.5bn which are yet to reflect US$500mn received from AIIB.