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

Karachi, September 02, 2022 (PPI-OT): Market loses 0.7% WoW despite IMF revival

Pakistan equities closed negative at 42,309, losing 282 points WoW. Volumes remained dull during the week with ADTV declining 15% WoW. Increased political noise and economic uncertainty over news regarding damages due to the floods led to profit taking this week. Market however witnessed a short lived rally during the week in response to revival of the stalled IMF programme under which Pakistan received US$1.16bn. Bond yields on Pakistan’s dollar denominated instruments eased in response to the IMF approval. Pak Rupee also extended gains during the week and appreciated 0.8% WoW closing at a PKR/US$ rate of 218.98 in the interbank on Friday.

On the news front, govt. increased petrol prices during the week by Rs2.1/litre because of the increase of petroleum levy to help meet the revenue target set under the IMF program. Numerous countries and global organizations pledged their assistance during the week to help Pakistan combat challenges due to flash floods which have affected more than 30mn people. Moreover, CPI for Aug-2022 clocked in at 27.2% YoY, marking a multi-decade high; while trade deficit for Aug-2022, clocked in at US$3.5bn rising by 29% MoM due to higher imports. SBP reserves for the week ended Aug 26, 2022 stood at US$7.7bn.