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KARACHI: Pakistan Stock Exchange remained under severe selling pressure during the outgoing week ended on May 13, 2022 due to investors concerns over prevailing economic and political issues in the country.

The benchmark KSE-100 index plunged by 1354.35 points on week-on-week basis and closed below 44,000 psychological-level at 43,486.46 points. Average daily trading volumes on ready counter however increased by 44.6 percent and stood at 274.04 million shares as compared to previous week’s average of 189.48 million shares while average daily traded value increased by 42.7 percent to Rs 8.08 billion.

KSE-100 Index roars back

BRIndex100 decreased by 181.06 points during this week to close at 4316.71 points with average daily turnover of 248.366 million shares.

BRIndex30 declined by 1093.92 points to close at 15001.44 points with average daily trading volumes of 168.646 million shares.

Total market capitalization declined by Rs 244 billion during this week and stood at Rs 7.199 trillion.

“The first full working week in May’22 stood no different than the latter half of April’22 for equities where KSE-100 index returned negative 3.0 percent on week-on-week basis to close at 43,486 points”, an analyst at AKD Securities said.

He said political uncertainty and indecisiveness over prerequisites for IMF program resumption have put Pakistan’s economic situation into a tailspin leading investors towards risk-averse behaviour. PKR has depreciated by 3.4 percent on WoW against US$, standing at an all-time low of PKR 192.9/US$ while FX reserves deplete to $10.3 billion, signifying an import cover of 1.5 months.

Sector-wise, amongst main boards, engineering, and cement sector posted largest decline of 6.1 percent on WoW and 5.9 percent on WoW respectively owing to concerns over a potential slowdown in demand and margin shrinkage whereas overall, Cable and Electrical Goods segment and Vanaspati and Allied Industries recorded a decline of 7.7 percent on WoW each. Sectors that exhibited outperformance during the week include Chemicals (outperformance: 2.0 percent), and E&Ps (outperformance: 1.6 percent).

Flow-wise, major net selling was recorded by Individuals (net sell: $10.4 million) and mutual funds (net sell: $3.2 million), as a result falling in the same boat as foreigners (net sell: $1.9 million).

On the other hand, Banks absorbed most of the selling with net buy of $16.3 million.

Stockwise, top performers include HMM (up 25.7 percent), SERT (up 17.0 percent), SML (up 9.6 percent), COLG (up 8.1 percent) and PSEL (up 8.1 percent), while top laggards were MTL (down 14.4 percent), PAEL (down 11.1 percent), AVN (down 10.2 percent), CNERGY (down 10.1 percent) and ANL (down 9.9 percent).

An analyst at JS Global Capital said that delay in clarity over economic reforms and uncertainty over the tenure of the newly formed government took a toll on the equity markets in the first half of the week, taking benchmark index down by 641 points to 42,863 level. Nonetheless, some form of comfort over the government staying in position for more than at least a couple of months put a brake on further drain, closing the week down 1,354 points at 43,486, with almost all sectors closing in red.

The negative sentiments were added by consistent depreciation in the PKR against the US$, closing at its all-time low of 193 this week (down 8.5 percent CY22 to-date).

Copyright Business Recorder, 2022

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