Weekly Review: market may rebound on IMF bailout package

KARACHI: Market may rebound next week after witnessed steep fall owing to optimism over approval of IMF bailout backage, analysts said.

“We expect the market may rebound next week. However, formal approval by the IMF of the bailout package for Pakistan may provide some relief to investors,” the analysts at Arif Habib Limited said.

“Clarity is likely to emerge over the main features of the program which may appease major concerns of investors,” they added.

Local equity bourse continued to be in the doldrums for another week primarily on the back of despondent economic conditions in the country.

The Pak Rupee once again continued its downslide against the USD, depreciating ~2 percent WoW to close at PKR 160.05/USD.

Moreover, gas tariff hike of upto 191 percent was approved by the ECC which will aggravate inflationary pressure in the economy, lending credence to concerns of further monetary tightening by the SBP (AHL expects a 100 bps rate hike in the July MPS).

The KSE100 index closed at 33,902 points, shedding off 1,223 points WoW (-3.5 percent).

Negative sector-wise contributions came from i) Commercial Banks (306 points), ii) Oil & Gas Exploration Companies (279 points), iii) Fertilizer (197 points), iv) Cement (126 points), and v) Oil & Gas Marketing Companies (81 points). Scrip-wise negative contributions came from HBL (142 points), PPL (132 points), FFC (80 points), OGDC (75 points) and LUCK (70 points). Whereas, positive scrip-wise contributions came from NATF (26 points), FATIMA (19 points), and HGFA (13 points).

Foreign buying was witnessed this week clocking-in at USD 7.9 million compared to a net sell of USD 5.7 million last week. Buying was witnessed in Cement (USD 4.5 million) and Commercial Banks (USD 3.6 million). On the domestic front, major selling was reported by Mutual Funds (USD 14.7 million) and Individuals (USD 4.7 million).

Average Volumes settled at 147 milllion shares (up by 17.4 percent WoW) while value traded clocked-in at USD 29 million (up by 5.7 percent WoW).

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