Karachi, April 08, 2022 (PPI-OT): Market loses 1.6% WoW in a volatile week

It was a rollercoaster ride at the local bourse this week. The week started on a negative note in response to uncertainty on the political front where the index lost 1,250 points on the first trading day. Index closed the week at 44,444, losing 1.6% WoW where traded volume averaged at 153mn shares per day. Net foreign selling for the week clocked in at US$3.8mn. On the news front, domestic political arena remained heated on account of the Supreme Court hearings regarding the legality of National Assembly Deputy Speaker’s ruling.

The market reacted positively on the last trading day of the week after the Supreme Court’s much awaited decision and increase in interest rate by the SBP. SBP in an emergency meeting raised policy rate by 250bps on Thursday to bring certainty to an otherwise volatile money market. Two additional adjustments including enhancing the item list for 100% cash margin requirement for imports and increasing ERF rate from 3% to 5.5% were also announced. Country’s forex reserves fell by US$1bn last week owing to repayment of debt and settlement of an international arbitration. PKR/USD hit its record low at 188.2 during the week but recovered to close at 184.7 on Friday. Moreover, cut-off yield of short-term papers rose by upto 80bps in the auction held on Wednesday.