KSE-100 index remained in red for most of week


Pakistan Stock Exchange (PSX) lost ground in a tumultuous week as delay in resumption of International Monetary Fund (IMF) loan programme, worsening political scenario and ex-prime minister Imran Khan’s arrest aided the downward spiral.

The benchmark KSE-100 index remained in the red for most of the week and closed on a negative note. On Monday, the week commenced with a dip when bears took control of the market over growing political turbulence and persistent delay in reviving the IMF programme, which dragged the index below the 42,000 mark.

The following session brought no respite as political instability took its toll on the stock market, rattled by the arrest of former prime minister and Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan in Al-Qadir Trust case.

The stock sell-off persisted on Wednesday as well in the backdrop of political noise coupled with protests by PTI supporters in different cities. After three bearish sessions, investor confidence on Thursday got a boost from optimistic approach towards the IMF with expectation of release of the delayed loan tranche.

The bullish journey continued on Friday as well as investors awaited the Islamabad High Court (IHC)’s verdict in the Al-Qadir Trust case.Furthermore, the rupee’s smart recovery boosted investor confidence.

The KSE-100 index lost 754 points, or 1.8% week-on-week (WoW), and settled at 41,488.

JS Global analyst Muhammad Waqas Ghani, in his report, noted that in a turnabout from the previous trend, the market closed negative in the outgoing week, losing 754 points over growing political temperature and delay in completion of IMF’s ninth review. “Investors chose to stay on sidelines as a result of former premier’s arrest and the subsequent nationwide violent protests,” he said.

Exploration and production (E&P) sector (down 6% WoW) and tech sector (down 3.5% WoW) were the key underperformers.

On the economic front, data showed a contraction in budget deficit to 1.7% of GDP during 3QFY23. In absolute terms, the deficit expanded 17% YoY.

Likewise, remittances’ data for 10MFY23 showed a 13% YoY decline. Pakistani rupee faced a steep devaluation on Wednesday and Thursday and lost 5% (Rs14), slumping to an all-time low of Rs298.93 to a dollar.

The currency then recovered to settle at 285.08 on Friday over expectations that the political climate would improve in the wake of Supreme Court’s ruling declaring Imran Khan’s detention as illegal.