Karachi, August 04, 2023 (PPI-OT): Positive momentum continues, KSE-100 up 3.2% WoW
Investors began the week with robust optimism, touching 6-year high at 48,765. Index, however, succumbed to bearish pressure in the later part of the week as it closed at 48,585, up 1,509 points WoW. On the economic news front, SBP maintained Policy Rate at 22% in MPC meeting held on Monday due to declining inflation, with FY24's CPI projected at 20%-22%. Market had anticipated a hike based on the recent IMF report, which recommended tightening monetary policy measures. On the other hand, inflation for Jul-2023 clocked in at 28.3%, higher than street estimates of ~26%. The higher reading was driven by two heavyweights in the CPI basket - food and electricity.
During the week, Senate passed a law to establish Pakistan Sovereign Wealth Fund, which will have government-owned assets parked in it. Government also announced a significant increase of ~Rs20/litre in the price of petrol and diesel this week. Jul-23 sectoral data showed OMC volumes declining by 6% YoY owing to considerably lower auto sales coupled with lower demand from the power sector. Moreover, cement dispatches declined by 21% MoM in July. Finance Ministry remained focused on energy sector reforms, prioritizing gas sector's circular debt. This kept interest in energy chain stocks intact.