KARACHI: The representative index of the stock market traded on the lower side in the outgoing week mainly because of uncertainty over the resumption of the International Monetary Fund (IMF) programme.

Arif Habib Ltd said the government announced a subsidy scheme for petrol users without consulting the IMF, which could potentially cause further delays in unlocking the next loan tranche. The rupee depreciated against the dollar by 0.53 per cent on a week-on-week basis to 283.2.

Additionally, the Sensitive Price Index saw a record increase to 46.65pc owing to a consistent rise in the price of essential commodities.

On the political front, the Election Commission of Pakistan postponed the Punjab elections, originally scheduled for April 30, till October 8. Moreover, the government raised Rs1.14 trillion through market treasury bills whereby yields for three- and six-month papers increased by over 100 basis points, which signals the possibility of another rate hike in the next monetary policy meeting due on April 4.

The country recorded a current account deficit of $3.86bn in July-February versus $12.07bn a year ago, depicting a decline of 68pc.

As a result, the benchmark index of the stock market closed at 39,942 points after shedding 1,388 points or 3.36pc on a week-on-week basis.

Sector-wise, negative contributions came from miscellaneous (210 points), cement (191 points), exploration and production (186 points), fertiliser (180 points) and banks (173 points).

Sectors that contributed positively were leather and tanneries (five points) and modarabas (two points).

Scrip-wise, negative contributors were Pakistan Services Ltd (211 points), Oil and Gas Development Company Ltd (87 points), Pakistan Petroleum Ltd (79 points), Engro Fertilisers Ltd (68 points) and Engro Corporation Ltd (61 points).

Meanwhile, positive contributions came from Service Industries Ltd (five points), Rafhan Maize Products Company Ltd (four points) and Millat Tractors Ltd (three points).

Foreign buying was witnessed during the outgoing week as it clocked in at $0.5m versus a net sale of $5m a week ago. Major buying was witnessed in exploration and production ($0.5m) and technology and communication ($0.3m).

On the local front, selling was reported by insurance companies ($0.7m) and individuals ($0.6m). The average daily volume arrived at 133m shares, down 40pc from a week ago. The average daily value traded settled at $12.7m, down 56pc week-on-week.

AKD Securities said any development on the IMF front is likely to determine the direction of the market. “The news flow has indicated that the IMF has pushed for a 200-basis-point-hike in the interest rate… This has the potential of keeping the market range-bound,” it added.

Published in Dawn, March 26th, 2023