The KSE-100 reacted sharply to the current account deficit that clocked in at nearly $1.5 billion in August 2021, ending the week 284 points lower after a second-session retreat at the Pakistan Stock Exchange (PSX) on Friday.
After opening positive and easily moving past 47,000, the KSE-100 retreated sharply in the second session, erasing all its gains to reach the 46,500 level. The index hit an intra-day high of 47,183.08 in the first session.
However, at close, the KSE-100 finished with a loss of 284.38 points or 0.61% to settle at 46,636.08. The benchmark index lost 1.19% on a weekly basis.
Market participants were disappointed at the current account deficit figures that has also put pressure on the rupee in recent months. With the State Bank of Pakistan due to announce the monetary policy on Monday, investors opted to book profits.
“The KSE-100 has remained volatile lately over uncertainty around interest rate outlook. However, we believe the market has already priced in a ~25bps increase in interest rates as indicated by 3M KIBOR inching up 14bps in the past 10 days and continued consolidation at the bourse, as such, any hike is unlikely to carry negative connotations in the near term,” said AKD Securities in its latest report.
“Moreover, interest rate hike is unlikely to have material implications on profitability at the bourse where most companies have already booked financing under subsidised arrangements. Hence, market direction in the near term is likely to be influenced by the IMF review due to start in late September and FATF meeting in October,” added AKD Securities.
On the results front, Pakistan Petroleum Ltd (PPL) posted a Profit After Tax (PAT) of Rs14.3 billion with an EPS of Rs5.26 during 4QFY21. Alongside the result, the company announced a final cash dividend of Rs2.00/share.
On Friday, sectors dragging the benchmark KSE-100 index lower included cement (73.45 points), banking (58.49 points) and technology and communication (57.02 points).
Volume on the all-share index decreased from 405.18 million on Thursday to 387.29 million on Friday. The value of shares traded also marginally declined during the session, amounting to Rs16.24 billion from Rs16.51 billion.
WorldCall Telecom was the volume leader with 42.41 million shares, followed by TRG Pakistan Limited with 25.23 million shares, and Byco Petroleum 20.91 million shares.
Shares of 525 companies were traded on Friday, of which 173 registered an increase, 327 recorded a fall, while 25 remained unchanged.