Karachi, April 28, 2023 (PPI-OT): Weekly Review
In a week mired with political uncertainty, US has asked Pakistan to move ahead on stalled reforms by the IMF while, also promising technical help in worst economic times. Furthermore, IMF is awaiting clarity on the cross fuel subsidy scheme since Pakistani authorities has not withdrawn the subsidy scheme. In addition to this, FX reserves inched by US$30mn to US$4.5bn as at of 20'April, culminating to an import cover of less than a month. The KSE-100 index closed the week at 41,581pts, higher by 1.40% over the course of the week. Participation in the market declined, with daily volumes averaging ~208.02mn shares during the week, compared to ~105.07mn shares in the prior week depicting a gain of 98%WoW.
Other major news flows during the week included: i) Saudi Arabia 'expected' to sign deal for $2bn deposits after Eid, ii) Govt cuts growth rate to 0.8pc, iii) Jul-Mar profit repatriation plunges 82pc to $233.1m YoY, iv) CPPA-G seeks positive adjustment of Rs1.17/unit, v) Discos: regulator asked to freeze capacity payments and vi) Govt’s bank borrowings surge 182pc to Rs3tr. Sector-wise, the top performing sectors were; i) Vanaspati and Allied Industries (+5.8%WoW), ii) Tobacco (+5.7%WoW), and iii) Inv Banks (+5.6%WoW), while the least favourite sectors were; i) Close End Mutual Funds (-8.8%WoW), ii) Leasing Companies (-2.5%WoW), and iii) Glass and Ceramics (-1.5%WoW). Stock-wise, top performers were; i) POML (+22.9%WoW), ii) SRVI (+14.1%WoW), iii) DAWH (+13.9%WoW), iv) UBL (+11.3%WoW), and v) MUREB (+9.3%WoW), while laggards were; i) PGLC (-7.7%WoW), ii) HGFA (-5.6%WoW), iii) KAPCO (-4.6%WoW), iv) BOP (-4.4% WoW), and v) PIBTL (-4.4%WoW). Flow wise, Companies were the major buyers with net buy of US$15.9mn, followed by individuals (net buy of US$14.17mn), while Mutual Funds were major sellers during the week, with a net sell of US$1.63mn.
Outlook
As per news flow, the funding arrangement from KSA and UAE has intimated IMF on financing support giving a relief on external financing shortfall of USD$6bn will dictate the market performance in near term. Moreover, political situation will be in limelight till general elections are held. Keeping that in view, we continue to advocate scrips that have dollar-denominated revenue streams which hedges the investor against the currency risk, that include the Technology and E and P sectors.