Karachi, August 12, 2022 (PPI-OT): Positive news flows led the rally

Continued appreciation of Pak Rupee against the US$, decline in Pakistan International Bond yields, and positive development on the IMF front led the market rally this week. KSE 100 index rallied by 761 points to close at 42,857 level. Volumes also witnessed an increase of 28% WoW with an average of 343 million shares/day traded during the week. Key outperformers were Refinery (5.5%), Power (5.1%) and Oil and Gas Exploration (4.1%). The week started with the announcement of US$1bn investment by UAE in Pakistan.

Moreover, the country got one step closer to reviving the stalled IMF program as Letter of Intent (LOI) was received. These positive developments led to further Rupee appreciation of 4.1% against US$, fueling positive investor sentiment. On the flip side, FX reserves declined by US$555mn during the week on the back of debt serving. On the news front, (i) Finance Minister announced that special tax on the basis of lower ADR won’t be applicable on banks on a retrospective basis, (ii) Urea/DAP offtake is expected to declined 37%/65% on a YoY basis during July, and (iii) PSO received Rs62bn for confirmation of LCs of petroleum products.