Karachi, October 06, 2023 (PPI-OT): Weekly Review
The market remained positive throughout the week, moving up by 1,261pts and concluding at 47,494pts. In a meeting with the Senate Standing Committee on Finance, Dr. Shamshad Akhtar made a promising statement that the caretaker government will deliver on the IMF programme to secure $700mn under the SBA. Moreover, Pakistan is seeking foreign investments from Saudia Arabia in Reko Diq’s copper and gold mining projects where companies like OGDC, PPL, and GHPL are contemplating on selling their partial or full stakes in an attempt to boost the country’s foreign exchange reserves.
As of 28th September, SBP reserves declined by $21mn to $7.62bn, while total forex reserves stand at $13.03bn. On a positive note, international oil prices of Brent and WTI were on a steady decline and closed at $83.88/barrel and $82.08/barrel, which was reflected in the latest revision in local petrol (PkR323.38/liter) and HSD (PkR318.18/liter) prices. Furthermore, trade deficit for Sep’23 amounted to $1.49bn, declining by 30%MoM when compared to $2.1bn in Aug’23. Finally, CPI rose to 31.4% in Sep’23 when compared to 27.4% in Aug’23, amidst higher fuel prices and a lower base last year.
Overall, average trading volumes improved by 43.8%WoW, clocking in at 291mn shares, compared to 202mn shares traded in the earlier week. The benchmark KSE-30 Index gained 385 points during the week, depicting a 2.4% increase in the index. Other major news flows during the week were 1) Govt debt stocks hit historic high of Rs64tn by Aug-end, 2) Foreign debt ratio rises to 38.3pc of total public debt in FY23, 3) Sept cement dispatches decline by 3.96%YoY, 4) Cotton arrivals rise by 29% but Punjab faces setback, 5) Money supply shrinks by 1.3% in Q1 as cash holdings drop, 6) 50bps hike in policy rate adds Rs300bn to domestic debt, 7) SBP raises Rs104.8bn through PIB auction, and 8) Textile Exports Slump 12% to $1.35bn in September.
Sector-wise, Engineering, Refinery, and Cable and Electric goods were amongst the top performers, up by 7.31%/4.61%/4.40% WoW respectively. Whereas, Synthetic and Rayon, Vanaspati and Allied Industries, and Close end mutual funds were amongst the worst performers with a decline of 3.29%/3.22%/1.85% WoW. Flow wise, major net selling was recorded by Brokers (net sell: US$3.48mn) and Mutual Funds (net sell: US$0.2mn). On the other hand, Banks and companies absorbed most of the selling with a net buy of US$13.6mn and US$2.1mn, respectively. Company-wise, top performers during the week were, i) KEL (+16.8%WoW), ii) ISL (+12.4%WoW), iii) AGP (+10.6%WoW), iv) CNERGY (+10.5%WoW), and v) PGLC (+10.3%WoW), while top laggards were, i) JDWS (-7.0%WoW), ii) PSEL (-5.9%WoW), iii) IBFL (-4.6%WoW), iv) THALL (-2.6%WoW), and v) HINOON (-2.3%WoW).
Outlook
Looking ahead, the market's performance is anticipated to be significantly influenced by the upcoming IMF review scheduled for November. Regarding the political landscape, while the expected timeline for elections is given, providing exact dates for the elections would be a positive development. Additionally, upcoming inflation readings and current account data would remain in the limelight. Overall, we continue to advise our investors to remain cautious while investing and consider companies with strong fundamentals and high dividend-yielding companies.