Stock Review - Average daily trading volume increased by 31.0%WoW.

Byline: SHABBIR KAZMI

Pakistan Stock Exchange (PSX) witnessed an overall lackluster week ended on March 10, 2023.The news about US$500 million inflow from China boosted reserves up to US$4.3 billion as of March 03, thereby instilling investor confidence. Despite fulfilling further IMF conditions, i.e. imposition of power surcharge and cabinet approval of 25% GST on luxury items, the long-awaited SLA (Staff-Level Arrangement) still hangs in the balance. The benchmark index closed the week at 41,794 points, indicating a 1.1%WoW gain.

The market witnessed an active participation, with daily trading volumes exceeding 209 million shares during the week as against an average of nearly 160 million shares in the last week, indicating an increase of 31.0%WoW.

As for the currency, PKR depreciated against the Greenback, losing 0.82% during the week to close at PKR280.77/US$ on Friday.

Other major news flows during the week included: 1) Pakistan got closer to signing IMF agreement, 2) Import curbs to be eased after IMF review, 3) Foreign exchange manipulation probe against banks completed, 4) ECP issued schedule for Punjab elections, to be held on April 30 this year, 5) PKR depreciation and borrowing raised debt stocks soar to PKR55 trillion by end January 2023.

Engineering, Tobacco and Cable and Electrical goods were amongst the top performing sectors, As against this, Miscellaneous, Woollen and Textile weaving were amongst the worst performers.

Flow wise, major selling was recorded by Mutual Funds with a net sell of US$5.92 million. Companies absorbed most of the selling with a net buy of US$10.53 million.

Company-wise, top performers during the week were: PGLC, PIOC, KTML, AKBL, and KOHC, while top laggards included: PSEL, UPFL, AICL, BNWM, and SML.

The market is expected to remain range-bound in the near future as already record-high inflation is expected to rise further, leading to another potential hike in the interest rate in the upcoming Monetary Policy Committee meeting scheduled for April 04, 2023. Furthermore, the long-awaited Staff-Level Agreement with the IMF will remain a topic of focus, and if achieved, could potentially bolster investor confidence and lead to euphoria in the market. Investors are advised to stay cautious while building new positions in the market.

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