Karachi, March 10, 2023 (PPI-OT): Nearing SLA with IMF, KSE-100 up 1.1%

KSE-100 saw a steady week closing at 41,794 points, up 1.1% WoW as the government nears a staff level agreement with IMF. Sectorwise, Cements remained key outperformers whereas Banks, E and P and Food sectors underperformed the market. Foreigners turned net sellers with the highest share of selling coming from Banks. On the news front, SBP reserves continued to crawl up as combined inflows of US$1.2bn from China have come in over the past 2 weeks. Reserves with the State Bank now stand at US$4.3bn, up by US$487mn WoW. Acknowledging the unsustainability of administrative controls on imports, SBP chief mentioned plans to relax controls once IMF SLA is reached.

Additionally, sales tax on luxury goods for multiple categories was increased to 25%. In the auction for MTBs, the government raised Rs1.6trn against target of Rs1.8trn with return on short term papers up to 21% post rate hike. Data for cement dispatches came in showing stability MoM in Feb-23 at 4mn tons, dispatches for 8MFY23 however, remained in negative territory, down 17% YoY at 29.8mn tons. Textile sector on the other hand dipped 9% MoM to US$1.2bn in Feb-23 whereas sales for 8MFY23 now stand at US$11.2bn, down 11% YoY.