In a meeting with the Senate Standing Committee on Finance, Dr. Shamshad Akhtar made a promising statement that the caretaker government will deliver on the IMF program to secure US$700 million under the SBA.
Pakistan is also seeking foreign investments from Saudi Arabia in Reko Diq’s copper and gold mining projects while companies like OGDC, PPL, and GHPL are contemplating on selling their partial or full stakes in an attempt to boost the country’s foreign exchange reserves.
As of September 28, 2023, foreign exchange reserves held by State Bank of Pakistan (SBP) declined by US$21 million to US$7.62 billion, while country’s total foreign exchange reserves were reported at US$13.03 billion.
International oil prices of Brent and WTI were on a steady decline and closed at US$83.88/barrel and US$82.08/barrel, which was reflected in the latest revision in local petrol and HSD prices.
Trade deficit for September 2023 was reported at US$1.49 billion, down by 30%MoM when compared to US$2.1 billion in August 2023.
CPI rose to 31.4% in September 2023 when compared to 27.4% in August 2023, amidst higher fuel prices and a lower base last year.
Overall, average trading volumes was reported at 291 million shares as compared to 202 million shares a week ago.
Other major news flows during the week included: 1) Government debt hit historic high of PKR 64 trillion by August end, 2) Foreign debt ratio exceeded 38% of total public debt in FY23, 3) September 2023 cement dispatches decline by almost 4%YoY, 4) Cotton arrivals rose by 29% but Punjab faced setback, 5) Money supply shrank by 1.3% in Q1 as cash holdings drop, 6) A 50bps hike in policy rate added PKR300 billion to domestic debt, 7) SBP mopped up PKR104.8 billion through PIB auction, and 8) Textile exports declined 12% to US$1.35 billion in September 2023.
Engineering, Refinery, and Cable & Electric goods were amongst the top performing sectors, whereas, Synthetic & Rayon, Vanaspati & Allied Industries, and Close end mutual funds were amongst the worst performers.
Major net selling was recorded by Brokers (US$3.48 million) and Mutual Funds (US$0.2 million). Banks and Companies absorbed most of the selling with a net buy of US$13.6 million and US$2.1 million respectively.
Top performers during the week included: KEL, ISL, AGP, CNERGY, and PGLC, while top laggards were: JDWS, PSEL, IBFL, THALL, and HINOON.
Going forward, the market's performance is anticipated to be significantly influenced by the upcoming IMF review scheduled for November.
Regarding the political landscape, while the expected timeline for elections is given, providing exact dates for the elections would be a positive development.
Additionally, upcoming inflation readings and current account data would remain in the limelight.
Overall, analysts continue to advise investors to remain cautious while investing and consider companies with strong fundamentals and high dividend-yielding companies.
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