The gain can be largely attributable to renewed interest in the oil and gas sector as the Government of Pakistan (GoP) constituted a new committee for the resolution of circular debt.
Participation in the market improved, with daily traded volume averaging 214.27 million shares during the week, as compared to 180.2 million shares in the prior week depicting a gain of 18.9%WoW.
Pakistan is scheduled to make debt repayments of US$ one billion to two commercial banks early in January 2023. Foreign exchange reserves held by State Bank of Pakistan (SBP) further declined by US$294 million to paltry US$5.8 billion as of December 23, 2022.
Other major news flows during the week included: 1) SBP raised EFS and LTFF rates by 2% to 13%, 2) foreign exchange reserves held by SBP plunged to eight-year low, 3) makers raised steel prices by up to Rs25,000, 4) development spending dropped 38% in July-November period, 5) fertilizer offtake declined by 26.4%YoY during Rabi season, 6) power sector receivables crossed PKR2.5 trillion mark, 7) ADB said Pakistan needed US$62 billion to $155 billion for energy sector until 2030, and 8) FBR reduced duty on import of tractors to 15%.
Top performing sectors were: Food & Personal care products, Leasing Companies, and Leather and Tanneries, while the least favorite sectors were included Woolen, Textile Weaving, and Automobile Parts and Accessories.
Top performing scrips were: PSMC, HACR, NESTLE, PPL, and PGLC, while laggards included: THALL, YOUW, NCL, AICL, and ARPL.
Flow wise, Banks were the major buyers with net buy of US$23.93 million, followed by other organizations (US$3.91 million), while foreign investors were major sellers during the week, with a net sell of US$16.59 million.
The market is expected to remain under pressure in the near future, driven by the weakness in the PKR 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.
The market is likely to remain jittery amid uncertainties over economic fronts. Therefore, analysts to advise a cautious approach to investors while building positions in the market.
