Although, some respite was seen towards energy stocks such as PPL, OGDC and refineries with news amidst gas circular debt resolution and fresh investment in a coastal refinery from Saudi Arab (aided by the much anticipated refinery policy).
Overall, average daily trading volume remained low at 176 million shares, as compared to 214.2 million shares traded in the earlier week. The Index gained 588 points during the week, depicting a 1.45% increase.
The PKR also lost some footing against the US$ and depreciated 0.31% to end at PKR227.14/US$ parity on Friday. CPI was still at multi-year highs, at 24.5% for December 2022, lower than expectations as compared to 26.6% in October 2022.
Finally, Trade deficit for November 2022 was reported at US$2.79 billion, down 28.4%YoY. Foreign exchange reserves held by State Bank of Pakistan (SBP) were reported at US$5.6 billion as at December 30, 2022.
On the international front, crude oil remained volatile, averaging at US$82/bbl as the global commodity remained in a limbo on the back of on/off Chinese lockdowns and the emergence of the newer COVID Omricon variant.
Other major news flows during the week were: 1) Pakistan will have to repay by January 10, 2023, US$1.3 billion in foreign loans, 2) annual inflation measured by the Consumer Price Index (CPI) was recorded at 24.5% in December last year, 3) The federal cabinet, on Tuesday, approved the Energy Conservation Plan, barring fresh restrictions on wedding halls and markets, 4) Pakistan is eying generating around US$8 billion from the international community and donor agencies for the rehabilitation and reconstruction of the flood-affected people, 5) Finance Minister Ishaq Dar on Wednesday claimed that friendly countries have announced their support.
Sector-wise, amongst mainboard items, Miscellaneous, Refinery and Transport were the top performers. Vanaspati and allied industries, Leather & Tanneries and Cable & Electrical were amongst the worst performers.
Flow wise, net selling was recorded by Mutual Funds with net sell of US$2.9 million). Companies absorbed most of the selling with a net buy of US$3.2 million.
Company-wise, top performers during the week were: PSEL, SHIFA, ATRL, PPL, and SNGP, while top laggards were: PSMC, HCAR, KEL, GADT, and GATM.
The market is expected to remain under pressure in the near future, driven by the weakness in the PKR against the US$ and the concerns regarding the country’s fiscal health.
Pakistan will have to repay around US$8.3 billion in shape of external debt servicing over next three months of current fiscal year.
Additionally, the political uncertainty and any developments regarding the 9th review by the IMF would remain in the limelight, which would unlock inflows from friendly countries.
Consequently, the market will remain jittery amid uncertainty over economic fronts. Analysts continue to advise a cautious approach while building positions in the market.
