Karachi, December 23, 2022 (PPI-OT): Bloodbath at KSE-100 amid political uncertainty

KSE100 Index: Week Open: 41,301.48 Close 39,669.20 ↓ (1,632.28)

Bears stormed the local bourse during the week closing in at 39,669 points, down 4% WoW. The index plunged by more than 1,958 points during the first three sessions. The market was under a lot of stress mostly because of the political unrest and the holdup in IMF negotiations in the face of deteriorating economic indicators. Average traded volumes per day increased by 11% to 180mn shares, a direct result of these selling pressures.

Sector wise, Refinery (-11.0%), Technology (-8.7%), OMCs (-6.1%) and Cements (-5.2%) remained key underperformers. On the news front, Current account deficit for Nov-2022 declined to US$276mn (-51% MoM), a level last witnessed at the start of CY21.

Deficit shrank as contraction in imports more than offset lower exports and remittances. GOP in its PIB auction this week raised no amount as all bids were rejected against a target of Rs175 bn. In other news, World Bank approved the long awaited US$1.7 bn financing for the flood-affected areas. Moreover, S and P lowered its long-term credit rating for Pakistan from “B-” to “CCC+”, and short term rating from “B” to “C” citing weak economic conditions as reason. SBP reserves continued to drop during the last week and now stand at US$6.1bn.