Stocks post second weekly loss as IMF euphoria subsides

KARACHI: After losing 1,049 points in the preceding week, the Pakistan Stock Exchange (PSX) recovered as many as 520 points in the first trading session of the outgoing week, thanks to the positive news trigger relating to the resumption of the International Monetary Fund (IMF) loan programme, said AKD Securities.

The IMF delegation is expected to visit Pakistan in May and may agree to increase the duration of the programme until Jun 2023 with an additional $2 billion financing arrangement, which should take the total programme size to $8bn.

The upward movement, however, was short-lived. The north-bound journey of the benchmark stopped in the next few sessions when the Karachi Interbank Offered Rate or Kibor reached a 14-year high of 14.1 per cent. In addition, yields of treasury bills also hovered around 15pc after hitting a 22-year high.

As a result, the benchmark posted a net decline of 304 points — or 0.67pc from a week ago — to close at 45,249 points. On the flip side, the average daily turnover witnessed growth of 25.6pc on a week-on-week basis to 282.1 million shares.

Other market-driving news stories during the week included the current account deficit swelling to $13bn in the July-March period, nine-month IT exports increasing 29.3pc to $1.9bn, Finance Minister Miftah Ismail holding talks with key global investors, allocation of portfolios to six cabinet members and the nine-month fiscal deficit widening to Rs2.6 trillion or 4pc of GDP).

Sector wise, the highest gainers were cable and electrical goods segment, which rose 22.4pc week-on-week, and vanaspati and allied industries that rose 1.2.

Close-end mutual funds declined 14pc week-on-week, followed by synthetic and rayon (5.3pc).

Stock-wise, top performers were Lotte Chemical Pakistan Ltd, up 20.7pc week-on-week, followed by Nestle Pakistan Ltd (4.6pc), Bank Alfalah (3pc), Abbott Laboratories Ltd (2.9pc) and Bank AL Habib Ltd (2.2pc).

Laggards were Dewan Cement Ltd, which dipped 13.6pc week-on-week, followed by Kohinoor Textile Mills Ltd (8.4pc), Mughal Iron and Steel Industries Ltd (7.3pc), Pakistan Telecommunication Company Ltd (7.1pc) and Fauji Fertiliser Bin Qasim Ltd (7pc).

Volume leaders in the outgoing week were Hum Network Ltd with 96.59m shares, followed by WorldCall Telecom (88.22m), Telecard Ltd (66.46m), Pakistan Refinery Ltd (61.52m) and Pak Elektron Ltd (47.47m).

Flow-wise, insurance emerged as the net seller offloading $6.71m, followed by mutual funds ($4.87m) and banks and development finance institutions ($2.93m).

On the flip side, foreign investors accumulated shares worth $3.17m during the outgoing week. Similarly, individuals and companies remained on the buying side, with a net buy of $5.78m and $2.98m, respectively.

AKD Securities expects the stock market to remain jittery in the near term. The news from the IMF is bound to dictate market sentiments in the near term, with tough conditions being laid out for the country in the ongoing review, it said, recommending investors to accumulate stocks in refinery, fertiliser and chemical sectors.

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