Karachi, September 09, 2022 (PPI-OT): Weekly Review
Weekly Review
Performance of equity indices remained dull during the on-going week where investor participation remained subdued. Despite IMF’s approval for a loan of US$1.2bn, market remained lackluster, amid devastating impact of floods and political noise. Furthermore, news related hike in gas tariffs also dampened investor’s sentiment. Amid the fog, the KSE-100 remained flat to close at 41,948pts (-0.85%WoW) while average volume for the index remained low at 138.5mn shares (-34.5%WoW), as investors stayed wary of the market.
Major news flows during the week were; i) Oil settles below $90 as recession fears mount, ii) IHC decides to indict Imran Khan in contempt case, iii) Cut-off yield on the three-year T-bill inched up by 21 basis points (bps) to 16 percent, iv) Public debt balloons to over Rs50 trillion in July, v) Govt bound to hike gas prices, fuel GST under IMF deal, vi) FATF team completes onsite visit to decide Pakistan’s fate, and vii) SBP-held foreign exchange reserves increase to $8.8bn after inflow from IMF. Sector-wise, top performing sectors were; i) Textile Weaving (+2.5%WoW) ii) Tobacco (+2.2%WoW), iii) Synthetic and Rayon (+2.2%WoW), iv) Transport (+2.1%WoW), and v) Miscellaneous (+1.1%WoW), while the least favourite sectors were; i) Automobiles Parts and Accessories (-3.5%WoW), ii) Leather and Tanneries (-3.5%WoW), iii) Close-end Mutual Fund (-3.3%WoW), iv) Power Generation and Distribution (-2.5%WoW), and v) Modarabas (-2.2%WoW).
Stock-wise, top performers in the KSE-100 were; i) CHCC (+7.4%WoW), ii) TRG (+4.7%WoW), iii) HCAR (+4.6%WoW), iv) LOTCHEM (+4.4%WoW), and v) IBFL (+4.3%WoW), while laggards were; i) NATF (-8.2%WoW), ii) FHAM (-7.6%WoW), iii) FCEPL (-5.6%WoW), iv) BOP (-5.5%WoW), and v) THALL (-4.7%WoW). To five volume leaders for the week were i) HASCOL (78.0mn), ii) PRL (35.5mn), iii) WTL (31.6mn), iv) TRG (24.0mn) and v) MLCF (23.5mn). Flow-wise, Mutual funds were the largest sellers, offloading US$6.12mn followed by Brokers (US$0.23mn). While Companies and Banks were major buyers, with a net buy of US$3.23mn and US$2.6mn respectively. Insurance, NBFC, Other organizations, and individual were buyers with US$0.7mn, US$0.16mn, US$2.18mn and US$0.31mn, respectively.
Outlook
Despite the IMF tranche market participants stayed on side-lines amid devastation caused by floods. In the later part of the week, cement sectors performed were able to get investor’s attention in anticipation of demand for construction materials amid rehabilitation process. Currency market remained jittery where PkR fell by ~4%WoW against greenback. Demand for dollars in informal markets remained high. Possible financing from multilateral and donor institutions will provide much needed support to FX reserves. Higher inflation print might force central bank to further increase policy rate. Outlook for the market remains hazy for the short-term, any development on deregulation of petroleum products will bring the sector in limelight.