KARACHI: Pakistan Stock Exchange remained under pressure during the outgoing week ended on March 15, 2024 as the investors remained cautious and avoided taking fresh positions due to lack of clarity on Pakistan government negotiations with IMF and announcement of monetary policy scheduled to be announced on March 18, 2024.
The benchmark KSE-100 index plunged by 977.29 points on week-on-week basis and closed at 64,816.47 points.
Trading activities also remained low as average daily volumes on ready counter decreased by 20.1 percent to 339.57 million shares during this week as compared to previous week’s average of 425.01 million shares while average daily traded value on the ready counter declined by 30.6 percent to Rs 11.46 billion during this week against previous week’s Rs 16.52 billion.
BRIndex100 decreased by 107.51 points during this week to close at 6,678.44 points with average daily turnover of 285.307 million shares.
BRIndex30 declined by 468.47 points on week-on-week basis to close at 22,555.33 points with average daily trading volumes of 216.347 million shares.
The foreign investors however remained net buyers of shares worth $2.664 million during this week. Total market capitalization declined by Rs 152 billion during this to stand at Rs 9.202 trillion.
An analyst at AKD Securities said that the market remained volatile during the week with a sharp correction mid-week followed by some recovery during the second-last trading session.
With the new cabinet just taking office this week, progress on the IMF SBA’s second review has begun. The arrival of the IMF team has led to the circulation of conditionalities and requests across various economic sectors, most of which indicate long-term reforms and conditions, setting the tone for long-term programs.
Alongside conditions set in the SBA, additional conditions of expanding the tax net, removing specialized tax regimes, reviewing the NFC award, halting gas supply to power producers, and terminating gas subsidies for fertilizer plants all seem to be long-term goals that are put forward by the lender to possibly include in the FY24-25 budget. However, with the last quarter’s tax target appearing difficult to meet, the possibility of a mini-budget cannot be ruled out if a proper plan for tax collection is not presented to the IMF.
Sector-wise, Transport, Exchange traded funds, and Close-End mutual fund were amongst the top performers, up 13.7 percent/1.7 percent/1.7 percent respectively. On the other hand, Inv. Banks/Securities Cos., Leasing Companies, and Cable & Electrical Goods were amongst the worst performers with a decline of 8.0 percent/7.0 percent/4.7 percent.
Flow wise, major net selling was recorded by Companies with a net sell of $2.5 million. On the other hand, Foreigners absorbed most of the selling with a net buy of $2.7 million.
Company-wise, top performers during the week were PTC (up 8.0 percent), THALL (up 6.3 percent), LCI (up 4.4 percent), MEBL (up 2.4 percent) and LUCK (up 2.3 percent), while top laggards were DAWH (down 13.8 percent), PSX (down 8.3 percent), PAEL (down 7.0 percent), YOUW (down 6.9 percent) and NESTLE (down 6.8 percent).
An analyst at JS Global Capital said that the market experienced high volatility throughout the week, resulting in negative closings for four out of the five trading days. Average trading volume also shrunk by 20 percent WoW, depicting reduced market activity as the month of Ramadan begins.
New cabinet ministers taking charge of their respective offices and subsequent arrival of the IMF delegation for the final review of $3.0 billion SBA were the key highlights of the week. The newly elected government remained quite firm about meeting all the structural benchmarks, quantitative and indicative targets set by IMF. The IMF team has reportedly expressed some concerns regarding the government’s forthcoming strategies to address the anticipated revenue shortfall in the fourth quarter of FY24 and to decrease the accumulated circular debt in the energy sector.
It’s noteworthy that the review report is slated to be submitted to the IMF executive committee by the second week of April for the approval of $1.1 billion tranche.
Copyright Business Recorder, 2024
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