Government Announces 5-Day Eid-ul-Azha Holiday

July 3, 2022 (MLN): This week, the local exchange gained 579 points or 1.4% WoW and closed at 41,630 index levels.

The market rebounded significantly in the past week as the lending of $2 billion Chinese SAFE loans pushed SBP reserves to $10 billion.

In addition, $3.8 billion in debt relief by the G-20 countries to Pakistan and hopes to resume the IMF financing program as Pakistan received a Memorandum of Economic and Financial Policies (MEFP) for the combined 7th and 8th tranche of the IMF, which could result in $2 billion inflows into national reserves, also supported the stock market recovery.

However, market sentiment was negatively impacted by another increase in fuel prices by the government to meet IMF demand. After this, the market was unable to continue its momentum and went on a turbulent ride for the rest of the week.

Moreover, despite the all-time high tax collection of Rs 6.1 trillion, up 29% year-on-year in FY22, investor sentiment has not improved, mainly due to the 13-year high inflation in the month of June’22 and the widening deficit in the current account that reported at $15.2 billion for 11MFY22. In addition, fears of a key rate hike of 100-150bps in the next MPS further dampened market sentiment.

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In USD terms, the index recovered by 2.7% as the PKR strengthened by 2.4 rupees against the dollar on June 30, 22, reaching Rs 204.85.

Overall, the market witnessed 3 sessions in favor of bull while 2 sessions were in favor of bear. The KSE-100 index hovered between highs and lows of 2,149 and 41,052 levels respectively, before setting the week at 41,630 levels.

Among the sector-specific lens, cement, fertilizer, power generation and distribution, oil and gas exploration companies, banks kept the index in green territory as they added 97, 79, 74, 69 and 55 points to the index, respectively.

By contrast, Investment Banks, Refinery, Cable & Electric Goods, Sugar & Allied Industries and Modarabas collectively took 22 points off the stock market during the week.

Script-wise, HUBC, POL, LUCK, EFERT and MARI were the best performing stocks during the week, adding 83, 64, 47.39 and 36 points to the index, respectively. While HBL, EPCL, OGDC, KAPCO and DAWH together took 100 points off the index.

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Meanwhile, the KSE All Share market cap increased by Rs 100.2 billion or 1.46% over the course of the week, registering at Rs 6.9 trillion compared to a market cap of Rs 6.8 trillion last week.

In terms of power, over the course of the week, foreigners became net buyers, buying shares worth $1.52 million, compared to net sales of $2.3 million last week. In terms of sector, the largest sales were observed in fertilizers ($0.3 million) and all other sectors ($0.2 million).

On the local side, the majority of sales were reported by insurance companies and mutual funds, amounting to $12.2 million and $2.6 million, respectively. However, banks and individuals were on the other side with net purchases of $6.8 million and $4 million, respectively.

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