Pakistan Stock Exchange benchmark index posts 1.6%WoW increase

Market remained in green throughout the week ended on May 05, 2023 as buyback announcements from LUCK and HBL’s Sponsors boosted investor’s confidence.

The benchmark index gained 661 points during the week to close at 42,242, posting 1.6%WoW increase. Participation also witnessed an increase of 17.5%WoW as average daily trading volume rose to 244.5 million shares as compared to 208.0 million shares a week ago.

On the macro front, IMF reviews still hang in the balance and as the Fund will review the budget plans for upcoming year.

While political instability still persists, as deadlock remains on the election dates between PTI and the incumbent government.

Internationally, crude oil prices dropped during the week due to lower than anticipated demand from China and FED rate hike by 25bps. WTI/Brent declined by 8.0%/8.1%WoW to currently trade at US$70.6/74.7/bbl, respectively.

Foreign exchange reserves of Pakistan remained largely flat on a weekly basis to US$4.46 billion as of April 28, 2023.

PKR remained stable during the week to close at PkR283.59 to a US$, a gain of 0.1%WoW.

Other major news flows during the week included: 1) Trade deficit for first 10 months of FY 23 declined 39.62%YoY to US$23.71 billion, 2) Food pushes inflation was record at 36.4% in April, 3) FBR suffers shortfall of over PKR100 billion in April, 4) POL products sale in April declined 46%YoY to 1.17 tons, 5) April cement dispatches declined 16.55%YoY to 2.95 million tons, 6) Circular debt crossed PKR4 trillion mark.

Synthetic & Rayon, Woollen, and Leasing Companies were amongst the top performers, while Fertilizer, Property, and Refinery were amongst the worst performers.

Flow wise, major selling was recorded by Foreigners with a net sell of US$6.1 million. Individual absorbed most of the selling with a net buy of US$8.0 million.

Top performing scrips during the week were: PGLC, IBFL, PKGS, UPFL, and LUCK, while the laggards included: ENGRO, DAWH, PAKT, JVDC, and JDWS.

Going forwards, any positive development on the IMF front and political stability would further boost the investor’s confidence. However, market upside is expected to remain limited due to record high interest rates in the country and rampant inflation.

Analysts advise investors to take a cautious approach while building positions in the market and continue to advocate the stocks with dollar-denominated revenue streams (Technology and E&P sector), to hedge against the currency risks or companies with healthy forward dividend yields.