KARACHI: The national bourse witnessed a steep fall in share prices in the outgoing week on the back of investors’ concerns over the outcome of the International Monetary Fund (IMF) programme.
The fuel and electricity subsidies, which were announced by the PTI government just before its ouster last month, remain a major hurdle to the resumption of the IMF loan, according to Arif Habib Ltd.
Depleting foreign exchange reserves and the depreciating rupee that touched an all-time low of 201 against the dollar — in addition to the ongoing political upheaval — also caused a stampede on the trading floor.
Furthermore, the country posted its highest-ever monthly oil import bill in April, hurting the sentiments of investors. However, some positive-to-range-bound sessions also took place in the outgoing week, thanks to the finalisation of the provisional GDP growth rate by the National Accounts Committee for 2021-22 at 5.97 per cent versus 5.74pc a year ago.
Also, a 39pc monthly decline in the current account deficit for April also supported positive sentiments on the exchange.
As a result, the stock market closed at 43,101 points, down 386 points or 0.89pc from a week ago.
Sector-wise, negative contributions came from oil and gas exploration (148 points), cement (110 points), commercial banking (99 points), pharmaceutical (36 points) and technology and communication (27 points).
Sectors that contributed positively were chemical (66 points), fertiliser (19 points), engineering (15 points), paper and board (13 points) and automobile assembling (10 points).
The brokerage said the key event to look out for in the upcoming week is the Monetary Policy Committee meeting, which is likely to lean towards an interest rate hike of 100 basis points. It added that the stock market will heave a sigh of relief only when clarity emerges on the IMF programme.
Published in Dawn, May 22nd, 2022