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JS Securities Limited – Weekly Review (November 18, 2022)

Karachi, November 18, 2022 (PPI-OT): KSE100 breaks its 2-week rally streak, down 0.8%

KSE-100 faced downward pressure during the week dropping 0.8% WoW to close in at 42,730 points. Sector wise Textile sectors (-3.5%), Oil and Gas (-2.8%) and Food (-1.8%) remained key underperformers whereas the Chemical (2.7%) and Fertilizer (1.8%) sectors were among top performers. On the news front, IMF asked GoP for a revision in the fiscal framework proposing measures for additional Rs800bn revenue to bridge the probable revenue shortfall. Data for remittances during Oct-2022 showed a drop of 9% MoM to US$2.2bn with Saudia Arabia accounting for the highest share.

Auto sales on the other hand reported a rebound in Oct-2022 clocking in at 12.8k units, up 29% MoM due to higher operating days. Default risk for Pakistan as measured by five-year Credit Default Swap (CDS) spread rose sharply during the week from 56% to 75% amid political uncertainty and delay in talks with IMF. SBP reserves increased marginally by US$3mn to US$7.9bn during the previous week whereas governor SBP claimed that the country has sufficient forex reserves and that around 100k cases of pending LCs will be cleared by the end of the week.