KARACHI: The stock market commenced on a negative note in the outgoing week as political and economic uncertainty kept investors on the edge.
Moreover, the rupee continued its free fall against the dollar to reach an all-time low of 239.94 amid scepticism over the release of the loan tranche from the IMF, said Arif Habib Ltd.
Volatility became more evident as the current account deficit climbed 39 per cent year-on-year in June to clock in at $2.3bn. The sentiment turned positive, however, after the finance minister reiterated that all prior actions had been undertaken for the revival of the IMF programme. Furthermore, the State Bank of Pakistan (SBP) echoed the finance minister’s statement and rejected the possibility of default on global payments in the near future.
In addition to this, Fitch and Moody’s showed optimism over the disbursement of $1.2bn from the IMF soon although S&P Global downgraded Pakistan’s credit outlook from neutral to negative.
As a result, the benchmark closed at 40,150 points after gaining 73 points or 0.18pc week-on-week.
According to AKD Securities, the political environment seems relatively stable after the resolution of the turmoil in Punjab. “A record depreciation — when added to the mix with inflationary pressures and high interest rates — has created an environment of uncertainty for the market. A recovery in the sentiment can be expected once the $1.2bn tranche from the IMF is released,” it said.
The outlook for the stock market remains hazy for the short term, it noted, adding that investors should consider any bull run as an exit opportunity.
Published in Dawn, July 31st, 2022