The week ended on July 07, 2023 started on a very positive note, with the market going up 2,000 points from the opening bell and closed the day at 43,899 points.
The rally was mainly driven by the positive sentiment coming out from the Eid Holidays as the country’s authorities reached Staff Level Agreement with the IMF on June 30, 2023. Overall, market ended gaining 2,754 points or 6.65%WoW during the week, breaking the 44,000 barrier during Thursday's trading session, up 660 points in intraday trade.
The market capitalization rose to PKR6,685 billion, up from PKR6,361 billion. In terms of volume, WTL topped the list with 162.97 million, followed by CNERGY with 103.65 million shares.
Foreign exchange reserves held by State Bank of Pakistan (SBP) rose to US$4.5 billion on June 30, from US$4.07 billion on June 23, reflecting an increase of 10%WoW. Total liquid reserves on June 30 were reported at US$9.7 billion, representing an increase of 4%WoW. Moreover, CPI for June 2023 clocked at 29.40%YoY.
Other notable news for the week include: 1) price of petrol was left unchanged at PKR262 per litre, whereas the price of High Speed Diesel was raised to PKR260.5 (effective beginning July); 2) Pakistan’s trade deficit for June 2023 was reported at US$1.81 billion as compared to US$2.13 billion a month ago; 3) the GoP increased advance income tax rate for commercial importers to 6%, from 5.5%; 4) IMF put Pakistan’s external funds requirement at US$91.5 billion over the next three years; 5) the GoP’s total debt skyrocketed to PKR58.96 trillion in May 2023 due to the increased domestic and external borrowing; 6) SBP reserves further increased by US$ 393 million to US$4.463 billion; 7) Saudi Arabia invested US$0.59 billion under SIFC; 8) Pak Eurobond yields witnessed a significant increase on a MoM basis.
Sector wise, Modarabas/Leasing Companies/Synthetic & Rayon have been worst performers, whilst Refinery remained an anomaly.
Top performing scrips of the week were: NRL, AIRLINK, AVN, UNITY, and INIL, while top laggards were: PGLC, IBFL, GADT, EFUG, and PAKT.
Flow-wise, major net selling was recorded by Banks/DFIs with a net sell of US$5.48 million. Insurance Companies absorbed most of the selling with a net buy of US$5.72 million.
After the bullish end to the previous week, market participants await further clarity regarding the IMF bailout package. The market may observe momentum once the lender concludes its board meeting on July 12, 2024. It is believed that the country's impending risk of default diminish before the market can establish its direction.
Analysts reiterate stance to follow a cautious approach while picking up scrips and continue to advocate dollar-denominated revenue stream scrips (Tech and E&P sector) to hedge against currency risk or high dividend-yielding scrips.
