Karachi, July 30, 2021 (PPI-OT): Covid concerns cost KSE100 738 points this week

Bears gripped Pakistan equities as the benchmark KSE100 index lost 738 points in the rollover week, closing today at 47,055. Serious concerns over the ongoing fourth wave of the Coronavirus kept investors cautious as double digit positivity rates were recorded in the larger cities, particularly Karachi where strict lockdowns were announced towards the end of the week. Overall, investor participation remained healthy as Average daily volumes traded increased 27% WoW to 405mn shares while average value traded jumped to US$81mn per day.

During the week, the Monetary Policy Committee decided to keep the Policy Rate unchanged at 7% to facilitate economic growth in line with the general expectations of the market. Moreover, the IMF revised upwards Pakistan’s growth forecast to 3.9% for FY21. With regards to the EFF, discussions are still underway between the government and the Fund on the sixth review of the program. The fertilizer sector outperformed the benchmark index over better-than-expected margins and strong overall expectations going forward. Foreign exchange reserves held by the SBP declined by US$221mn to US$17.8bn in the week ended July 23rd, 2021.