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JS Securities Limited – Weekly Review (February 03, 2023)

Karachi, February 03, 2023 (PPI-OT): IMF talks and politics; KSE100 closes up 0.1% WoW

A rollercoaster week was witnessed as bears and bulls both dominating in various trading sessions. Market participants predominantly tracked news flows and updates on the ongoing IMF and government talks regarding the ninth review. The news flows circled around higher tax measures and appropriate steps towards energy tariffs to manage pace of circular debt pile up. During the week, CPI for Jan-2023 was reported above street expectations at 27.5%. Moreover, trade data reflected further contraction in deficit in Jan-2023, clocking in 7% YoY lower at US$2.6bn.

In addition, State Bank of Pakistan’s (SBP) foreign exchange reserves witnessed another dip, declining to US$3bn and taking import cover to ~3 weeks. The week also witnessed further devaluation in PKR/US$, closing 5% WoW lower (-Rs14) at Rs276/US$, in addition to 13% devaluation recorded last week. On the other hand, political noise also remained upbeat during the week. Delays and uncertainty on the macro and political front kept market participation on the lower side when compared to last week. On scrip front, Engro Corporation’s (ENGRO, +3.6% WoW) buyback window commenced at the end of this week, which would be open for the next six months.