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PSX Trends:
In the week concluding on December 15, 2023, the Pakistan Stock Exchange (PSX) underwent a slight correction, and concurrently, the Pakistani Rupee gained 0.22% against the US dollar.
Throughout the week, the benchmark KSE-100 fluctuated within a range of 2,667 points, oscillating between the highs and lows of 67,094 and 64,427 levels, respectively. It eventually settled at 66,130 by the week’s end, experiencing a marginal 0.14% decline.
Following a historic bull run since September, the index encountered profit-taking and margin calls in the preceding week.
The market turnover remained high, with an average of 630 million shares valued at Rs22.48 billion exchanged, indicating a 9.52% month-on-month increase in shares traded and a 10.54% month-on-month decrease in traded value.
Moreover, the overall PSX average traded volume (All-Share) rose by 22.24% month-on-month to 1.25 billion shares valued at Rs30.34 billion, while the traded value declined by 9.74% month-on-month.
The top-performing sectors included automobile, transport, and leasing, while the worst-performing sectors were leather & tanneries, woollen, and textile weaving.
Major net sellers were insurance companies, and foreigners emerged as major net buyers. The week’s top gainers and losers were PTC, BOP, PIBTL, PAEL, and KEL, and HCAR, EFUG, MEBL, GHGL, and NRL, respectively.
The State Bank of Pakistan (SBP) maintained the policy rate at 22%, aligning with market expectations. Foreign investors continued to show optimism in Pakistan, exemplified by Saudi Aramco’s acquisition of 40% of GO Petroleum Ltd.
Anticipated external inflows of $4.5 billion from multilateral and bilateral sources, excluding the IMF, were expected in the current fiscal year, aiding in meeting external obligations of $6.8 billion.
The attraction of high-interest rates led investors towards fixed-rate instruments, including the oversubscribed first-ever sukuk auction by PSX (16 times oversubscribed). Remittances of $2.25 billion in November further supported the current account balance.
According to AKD Research, the market outlook remains positive, albeit with a potential slowdown in the rally. Key drivers of optimism include upcoming elections, robust FDIs, and active market participation.
Advice About PSX Trends:
The research firm advised investors to maintain long-term positions in fundamentally sound companies while capitalizing on profits from weaker entities. Companies with high dividend yields, particularly in the banking, energy, and fertilizer sectors, offer attractive accumulation opportunities.
Currency Trends:
On the currency front, the Pakistani rupee appreciated by 0.22% against the US Dollar, closing at PkR283.25 on Friday. This marked the fifth consecutive weekly gain, attributed to the successful staff-level agreement between Pakistan and the IMF on November 16 during the first review of the Standby Agreement (SBA).
The pending approval from the IMF’s Executive Board for the agreement would grant Pakistan access to approximately $700 million or SDR 528 million.
Acknowledging the need for market determination of the Pakistani rupee, authorities aim to enhance forex market transparency and efficiency, avoiding administrative measures that may impact the currency.
Optimism is bolstered by the latest trade figures for November, revealing a 13.16% month-on-month and a 31.72% year-on-year decrease in the trade deficit to $1.89 billion. Exports increased by 7.66% year-on-year to $2.57 billion, while imports declined by 14.47% year-on-year to $4.46 billion.
Read More: https://dusknews.com/