Weekly Review
Market witnessed lackluster performance this week, with a weekly change of mere 59 points.
Reason behind this dull performance was economic and political instability that remained
throughout the week. IMF situation continued to hang in the balance, despite the government
officials' doubtful assurances of resolution. Currently, IMF is seeking commitments from
friendly countries to bridge the gap of external financing, and furthermore, the fund is demanding clarity on the announced fuel subsidies. Alongside these developments, reserves saw
a decrease of US$354mn in SBP held reserves, standing at US$4.24bn as of 24th March.
KSE100 index gain 59pts this week and closed at 40,000pts on Friday, which is a positive
change of 0.15%WoW. Market participation also fell by 30.8%WoW and the average volume
reported at 92.3mn, which was 133.4mn last week. Other major news flows during the week
included; 1) July 1-March 11: Rs2.6trn borrowed for budgetary support, 2) Jul-Feb repatriation
of profit, dividend plunge 80pc YoY; Import curbs hurt investors in equal measure, 3) IT exports down 3%YoY to $195 million in February, 4) FBR Faces Uphill Task to Meet Tax Collection
Target for July-March, 5) UAE says its keen to invest in Pakistan economy. Sector-wise, Leather
& Tanneries, Textile weaving, and Cable & Electrical goods were amongst the top performers,
up 7.5%/4.2%/2.7%WoW respectively. On the other hand, Miscellaneous, Leasing companies
and Property were amongst the worst performers with a decline of 11.7%/5.2%/2.5%WoW.
Flow wise, major net selling was recorded by Insurance with a net sell of US$8.64mn. On the
other hand, Banks absorbed most of the selling with a net buy of US$4.58mn, followed by
Companies with net buy of US$4.46mn. Company-wise, top performers during the week were,
i) CEPB (up 9.1%WoW), ii) SHFA (up 8.3%WoW), iii) PIBTL (up 7.9%WoW), iv) HCAR (up 6.7%
WoW), and v) PAEL (up 6.5%WoW), while top laggards were, i) PSEL (down 23.6%WoW), ii)
PGLC (down 14.4%WoW), iii) YOUW (down 9.0%WoW), iv) SHEL (down 5.6%WoW), and v)
KTML (down 5.0%WoW).
Outlook
The main focus of the market will be on the MPC meeting on April 4th where we are expecting
a rise of 200bps. In addition, the market will also be focusing on any positive developments on
the SLA from IMF, which could create a rally in the market. However, until there are clear economic and political developments, we anticipate the market to remain in a range-bound state.
As such, we advise investors to take positions in the market with caution and to keep their ear
to the ground for any significant changes on the horizon.
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