Stock Review - Market stays bearish, range-bound likely.

Byline: SHABBIR KAZMI

Pakistan Stock Exchange (PSX) witnessed lackluster performance during the week ended March 31, 2023, with a weekly change of mere 59 points. This disappointing performance can be attributed to economic and political instability that haunted the investors throughout the week.

Currently, the IMF is seeking commitments from friendly countries to bridge the gap of external financing, and furthermore, the fund is demanding clarity on the announced fuel subsidies.

The foreign exchange reserves held by State Bank of Pakistan (SBP) decrease of US$354 million to US$4.24 billion as on March 24, 2023.

The benchmark index gained 59 points to close the week at 40,000 points.

Market participation also fell by 30.8%WoW as average daily traded volume plunged to 92.3 million, from 133.4 million shares last week.

Other major news flows during the week included: 1) GoP borrowed RKR 2.6 trillion for budgetary support during first 9 months of the current financial year, 2) IT exports declined 3%YoY to US$195 million in February, 3) FBR faced uphill task to meet tax collection target, and 4) UAE expressed keenness to invest in Pakistan economy.

Leather and Tanneries, Textile weaving, and Cable and Electrical goods were amongst the top performers, while Miscellaneous, Leasing companies and Property were amongst the worst performers.

Flow wise, major net selling was recorded by Insurance with a net sell of US$8.64 million. Banks absorbed most of the selling with a net buy of US$4.58 million, followed by Companies with net buy of US$4.46 million.

Top performing scrips of the week were: CEPB, SHFA, PIBTL, HCAR, and PAEL, while laggards included: PSEL, PGLC, YOUW, SHEL, and KTML.

The main focus of the market will be on the Monetary Policy announcement scheduled for April 04, where analysts are expecting a rise of 200bps.

In addition, the market will also be focusing on any positive developments on the SLA from IMF, which could create a rally in the market.

However, until there are clear economic and political developments, the market is anticipated to remain in a range-bound state. Investors are advised to take positions with caution.

Strong 1HFY23 marks a phenomenal period for the Mari Petroleum Company (MPCL) with weakening exchange rate alongside rising Arab light prices, providing a much needed impetus to the overall sector in face of lackluster production (flood damages, annual fertilizer plant turnarounds).

The US$ appreciated by 31%YoY...