The bears regained control of the Pakistan stock market in the outgoing week as looming uncertainty on the political front, coupled with rising oil prices in the international market, drove the index back into the negative territory. The benchmark KSE-100 index dropped 898 points or 2.02 percent to close at 43,653 points.

The market commenced the week on a negative note on wiping-off 1,284 points day-on-day as international oil prices touched a 14-year high (Brent rose to $139 per barrel) since US and EU discussed banning Russian oil imports, raising concerns over the current account position.

Moreover, the submission of a no-confidence motion against Prime Minister Imran Khan by the opposition in the National Assembly added to the woes of the investors.

Amidst the political noise, the State Bank of Pakistan (SBP) kept the policy rate unchanged at 9.75 Percent in its monetary policy meeting, which brought bulls back into the market.

Later during the week, the international oil prices witnessed a hefty drop led by a statement from UAE’s ambassador to the USA urging OPEC to increase production, which cushioned the overall dip (adding back 810 points day-on-day to the index).

Other major developments during the week were: Engro Powergen Thar Limited (EPTL) said the recent explosion caused no major damage, 6-month KIBOR reached 11.93 Percent, foreign exchange reserves decline $207 million, UAE wants to acquire Guddu Power Plant, and Oil and Gas Regulatory Authority (OGRA) backs diversifying oil suppliers, inter oil marketing companies (OMCs) sales.

Meanwhile, foreign selling was witnessed this week, clocking in at $3.13 million against a net sell of $0.97 million recorded last week. Selling was witnessed in banks ($4.4 million), and textiles ($0.4 million).

On the domestic front, major buying was reported by companies ($5.4 million), followed by other organisations ($3.7 million).

During the week under review, average volumes clocked in at 214 million shares (down by 0.7 Percent week-on-week), while average value traded settled at $38 million (down by 11 Percent week-on-week).

MAJOR GAINERS, LOSERS: Sector-wise negative contributions came in banks (-167 points), oil and gas exploration companies (-163 points), power generation and distribution (-143 points), cement (-113 points), and oil and gas marketing (-101 points).

Whereas sectors which contributed positively were technology and cement (+107 points), ii) automobile parts and accessories (+20 points), and chemical (+15 points).

Scrip-wise major losers were Hubco (-124 points), Lucky Cement (-122 points), Pakistan Petroleum (-75 points), Oil and Gas Development Company (-60 points) and Pakistan State Oil (-59 points)

Meanwhile, scrip-wise major gainers were Systems Limited (+148 points), National Foods (+23 points), and Thal Limited (+20 points).

OUTLOOK FOR NEXT WEEK: A report from Arif Habib Limited predicted: “We expect the market to remain range-bound in the upcoming week.”

With the government and Opposition seeking allies before the no-confidence motion against Prime Minister Imran Khan, “the market is expected to remain jittery”, it said.

The brokerage house noted: “On the international front, any de-escalation by Russia and successful negotiation with the West may push the commodity prices (especially oil and coal prices) down, which will improve the sentiment of the local bourse.”

“The KSE-100 is currently trading at a PER of 4.8x (2022) compared to the Asia-Pacific regional average of 13.2x while offering a dividend yield of 9.0 Percent versus 2.4 Percent offered by the region,” the brokerage house stated.


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