Karachi, March 24, 2023 (PPI-OT): Ambiguity over inflows drags the index down 3.4% WoW

KSE100 closed the week in red as IMF’s 9th assessment continues to be delayed, contingent on official assurances from friendly countries. Benchmark index closed at 39,942 points, down 3.4% WoW where Cement, Fertilizer and Banking sectors were major laggards. On the economic front, Pakistan’s Balance of Payments for Feb-2023 came in positive at US$0.92bn, as it received US$700mn from China. Positive BoP was further bolstered by the month’s minuscule Current account deficit (CAD), reported at a 24-month low of US$74mn, bringing 8MFY23 CAD to US$3.86 bn (-68% YoY).

As a major relief step, govt announced to formulate a petroleum relief package this week of upto Rs100/litre for country’s low-income citizens. Following which the IMF has reportedly sought details on the scheme. During the week, Govt in its T-Bills auction saw the rate on short-term papers rising to 22%, signalling expectations of a rate hike in the upcoming MPC meeting. In other news, FDI in the country fell by 40% to US$784mn during 8MFY23. Moreover, SBP reserves improved 6.5% WoW to US$4.6bn. During the week, China granted rollover of US$2bn SAFE deposits for a year to help the country meet external financing needs.