Karachi, February 24, 2023 (PPI-OT): KSE100 sheds 1% over expected rate hike

KSE-100 remained in the negative territory (down 1% WoW) over expected monetary tightening coupled with rising political temperature as elections in KPK and Punjab hang in the balance. The GoP on the other hand inched closer to reaching an agreement with the IMF with the approval of Mini Budget in the National Assembly this week. Sector wise, Cement sector stood out as a top performer (3.1% WoW) while E and P (-5.9% WoW), Autos (-4.8%) and Banking (-2.5%) sectors were underperformers.

On the news front, talks between the IMF and GoP continued regarding interest rate along with other issues with the possibility of further monetary tightening. PKR continued its positive trend this week as well further gaining 1.1% WoW. CAD for Jan-23 further shrunk by 17% MoM to US$242mn driven by lower imports as administrative controls remain intact whereas forex reserves showed stability WoW at US$3.2bn. External financing for the country increased 70% YoY to US$10.2bn during 1HFY23 with major outflow during 2Q. In the T-bill auction held on Wednesday GoP raised Rs258bn against bids worth Rs347bn with the cut off yield for 3 month bills set at 19.95%.