PSX weekly review: KSE-100 falls by 2.3% amid economic concerns

• KSE-100 closes week at 45,553.02 after a loss of 1,049 points.
• Foreign selling was witnessed this week, clocking in at $0.97m.
• "The market is expected to be range-bound in upcoming week," AHL predicts.

KARACHI: The Pakistan Stock Exchange (PSX) experienced a roller-coaster trading week as a decline in local currency coupled with concerns regarding International Monetary Fund (IMF) programme dimmed investor interest. Resultantly, the KSE-100 closed the week at 45,553.02 points after a loss of 1,049 points or 2.3%.

The market commenced on a positive note this week. With a jump in international oil prices, exploration and production scrips remained in the limelight.

However, the positive momentum couldn’t sustain for long as economic concerns such as Pakistani rupee depreciation (closing the week at PKR 186.70) and uncertainty regarding IMF programme resumption.

Meanwhile, an increase in a trade deficit that widened to $3.6 billion in March 2022 further exerted pressure on the scrips. Furthermore, a downward revision of the growth target forecast to 4% by the World Bank and a rise in treasury bill yields further suppressed the sentiment.

Other major developments during the week were: China Power Hub Generation Company (Private) Limited warned NEPRA of closure of the power complex, SBP’s reserves rose by $36 million, K-Electric sought Rs5.27 per unit raise for March, July and March foreign direct investment declined 2% to $1.285 billion year-on-year, Pakistan State Oil receivables, payables soared to Rs508.3 billion, textile exports surged by 25% to $14.2 billion in the first nine months of FY22, large-scale manufacturing expanded 8.6% in February 2022.

Meanwhile, foreign selling was witnessed this week, clocking in at $0.97 million against a net buy of $1.29 million recorded last week. Selling was witnessed in commercial banks ($1.74 million), and food and personal care products ($0.14 million).

On the domestic front, major buying was reported by an individual ($7.03 million), followed by companies ($0.87 million).

During the week under review, average volumes clocked in at 225 million shares (down by 53% week-on-week), while average value trade settled at $41 million (down by 39% week-on-week).

Major gainers and losers of the week

Sector-wise negative contributions came from commercial banks (-396 points), cement (-221 points), telecommunication and communication (-99 points), power generation and distribution (-74 points), and miscellaneous (-72 points). On the flip side, positive contributions came from oil and exploration companies (+88 points), chemical (+31 points), fertiliser (+10 points), glass and ceramics (+3 points), and textile spinning (+ points).

Scrip-wise major losers were HBL (-90 points), BAHL (-85 points), Lucky Cement (-70 points), Systems Limited (-66 points), and Pakistan Services (-60 points). Meanwhile, major gainers were Oil and Gas Development Company (+56 points), Fauji Fertiliser (+45 points), Pakistan Petroleum (+43 points), Lotte Chemical (+28 points) and Engro Fertiliser (+27 points).

Outlook for next week

A report from AHL predicted: “The market is expected to be range-bound in the upcoming week. Moreover, the new government is in talks with IMF for the revival of the programme.”

“Any breakthrough on the IMF front is likely to generate activity in the market,” it said, adding that keeping in view the ongoing result season, certain sectors and scrips are expected to stay in the limelight.

“The KSE-100 is currently trading at a PER of 4.9x (2022) compared to the Asia-Pacific regional average of 12.8x while offering a dividend yield of 8.5% versus 2.7% offered by the region,” the brokerage house stated.