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KARACHI: Carnage continued at local bourse as despite strong positive opening on Monday, the market sentiments went downhill very quickly amid higher than expected CPI, sudden spike in T-bills yields waving concerns of further monetary tightening and stupendous trade deficit caused excessive selling which shook the investor’s confidence and bourse saw one of the worst single day declines on Thursday.

The benchmark KSE-100 index plunged by 881.33 points or 2.0 percent on week-on-week basis and closed at 43,232.83 points. Trading activities however improved in this week as average daily volumes increased by 20.7 percent to 319.05 million shares as compared to previous week’s average of 264.38 million shares. Average daily traded value increased by 51.7 percent during this week to Rs 15.86 billion.

BRIndex100 decreased by 104.80 points on week-on-week basis to close at 4,398.37 points. Average daily trading volumes stood at 261.379 million shares.

BRIndex30 declined by 1221.68 points during this week to close at 16,979.40 level with average daily turnover of 150.338 million shares.

The foreign investors remained on selling side and withdrew $62.843 million from Pakistan equity market during this week. Total market capitalization declined by Rs 173 billion during this week to Rs 7.414 trillion.

An analyst at AKD Securities said that the feel good factor of the market returned on Monday with KSE-100 gaining 1,216 points amid ease off in global commodity prices. However, market sentiments went downhill very quickly amid higher than expected CPI of 11.5 percent in November 2021, sudden spike in T-bills yields waving concerns of further monetary tightening and stupendous trade deficit of $4.9 billion (up 134 percent on year-on-year basis) in the five months of FY22 caused an excessive selling in the market which shook investor’s confidence.

Apart from macro indicators, political uncertainty, rising electricity rates and ambiguity over talks of resumption of stalled IMF program still linger on. As a result, the benchmark KSE-100 index lost 881 points during the week to close at 43,233 points, down 2.0 percent on week-on-week basis.

Stock wise, major performers were SFL (up 8.1 percent), JDWS (up 7.1 percent), PSO (up 6.2 percent), STJT (up 6.0 percent), FATIMA (up 4.1 percent), while laggards were AGIL (down 16.5 percent), ATRL (down 13.7 percent), UNITY (down 12.1 percent), TRG (down 10.9 percent) and GATI (down 10.4 percent).

An analyst at JS Global Capital said that the market reacted negatively to the news of an alarmingly high import bill at $8.0 billion for November 2021 and a significant increase in the cut-off yields (an increment of 228bps) for three-month treasury bills in the recent auction due to a higher than expected CPI reading of 11.5 percent for November 2021. PKR lost 1.0 percent during the week against the US$.

On the other hand, international commodity prices witnessed a decline after news of the emergence of a new COVID-19 variant, Omicron. During the week, OPEC+ in its meeting decided to enhance output as per initial plan but also kept the door open for cuts if Omicron becomes more virulent.

MSCI related rebalancing also took place this week, taking net foreign outflow to $63 million as Pakistan was reclassified from MSCI EM to MSCI FM. Out of this, net foreign outflow in the Banking sector was $27 million.

The foreign exchange reserves have dropped to a level of $16 billion, declining by $244 million during the week ending November 26, 2021 and brought Pakistan’s import cover to 2.7 months.

Copyright Business Recorder, 2021

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