Karachi, December 30, 2022 (PPI-OT): Much needed stability after heavy losses, up 2% WoW

After a tough couple of weeks, KSE-100 stabilized during the week closing at 40,420 points, up 1.9% WoW. Week started with the political situation in Punjab easing slightly as CM Pervaiz Elahi agreed not to dissolve the assembly on the directions of LHC. Sector wise, Food (up by 10.3%), EnPs (up by 7.2%) and Cements (up by 4.9%) were among the outperformers during the week while Chemicals (down by 2.4%) and Fertilizer (down by 0.2%) weighed down on the market.

Foreigners remained net sellers during the week with selling of US$16.6mn primarily driven by selling in Banks (US$15.8mn). On the news front, IMF program continued to stall with the Fund setting a timeline of 2-3 weeks for the GoP to meet it’s demands such as fixing the cash bleeding energy sector, additional taxation measures and structural reforms. SBP on the other hand took measures such as relaxation in opening of LCs for certain sectors while rates for EFS and LTFF were raised by 2% to 13%. SBP reserves further declined to critically low levels of US$5.8bn, down US$294mn WoW due to external debt repayments. Lastly, APTMA in a letter written to the GoP expressed concerns for the textile sector with sector operating at close to 50% of its capacity in the aftermath of floods.