Weekly Review: falling rupee remains concern for stock market

Weekly Review: falling rupee remains concern for stock market

KARACHI: The massive depreciation of Pakistan Rupee (PKR) will remain major concern for investors of the Pakistan Stock Exchange (PSX) during the next week.

However, positive news such as compliance of FATF conditions by Pakistan and some revenue measures taken by the government to satisfy the IMF would send positive sentiments for the market.

READ MORE: Pakistan stocks gain 411 points in bull-run

Analysts at Arif Habib Limited said that in the outgoing week, the market opened on a negative note amid concerns over the dissatisfaction expressed by IMF upon measures taken in Federal Budget 2022-23, whereby the market plunged by 1,135points DoD.

After the bloodbath, the market sentiment turned positive amid the expectation of the exclusion of Pakistan from FATF’s grey list. Moreover, the investors remained elated owed to the news flow regarding China agreeing to roll over loans worth USD 2.3 billion to Pakistan and extending further assistance by USD 2.5 billion to USD 2.8 billion.

Furthermore, the government increased the prices of petrol and high speed diesel by Rs24.03/ltr and Rs59.16/ltr, respectively, while completely eliminating the remaining subsidies, fulfilling one of the major conditions of IMF.

READ MORE: Pakistan stocks up 291 points on fiscal consolidation

However, the rupee continued to plummet throughout the week against the USD, closing at PKR 208 (lowest level ever) while SBP reserves dropped to a staggering USD 8.99 billion. The market closed at 42,141 points, up by 126 points (up by 0.3 per cent) WoW.

Sector-wise positive contributions came from i) E&P (116 points), ii) Cement (90 points), iii) OMC (80 points), iv) Power Generation (56 points), and v) Engineering (51 points). Whereas, sectors which contributed negatively were i) Commercial Banks (263 points), ii) Chemical (34 points) and iii) Technology (33 points). Scrip-wise positive contributors were HUBC (51 points), PSO (50 points), POL (36 points), PPL (32 points) and OGDC (31 points). Meanwhile, scrip-wise negative contribution came from UBL (75 points), MEBL (71 points), BAHL (46 points), MCB (44 points) and SCBPL (34 points).

READ MORE: Pakistan stocks up 384 points ahead FATF decision

Foreign selling was witnessed this week, clocking in at USD 1.91 million compared to a net sell of USD 0.42 million last week. Major selling was witnessed in Banks (USD 1.4 million) and Fertilizer (USD 1.1 million). On the local front, buying was reported by companies (USD 10.5 million) followed by individuals (USD 5.8 million). Average volumes clocked in at 174 million shares (up 3 per cent WoW) while average value traded settled at USD 25 million (up 16 per cent WoW).

READ MORE: Pakistan stocks recover 175 points

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