KARACHI: Trading on the stock exchange commenced on a negative note in the outgoing week as ratings agency Fitch stated that Pakistan faced a substantial debt payment of $3.7 billion in May and June.
Arif Habib Ltd said another reason for pessimism was the absence of Pakistan from the agenda of the International Monetary Fund (IMF) meetings, which dampened the hope for the resumption of the Extended Fund Facility (EFF) programme.
Furthermore, there were significant political developments during the outgoing week that affected the investors’ sentiments. The arrest of former prime minister Imran Khan sparked protests across the country, leading to a period of political instability. However, as the week progressed, the political situation relatively eased off.
Foreign exchange reserves held by the State Bank of Pakistan (SBP) fell by $74 million to $4.38 billion. The rupee also depreciated against the dollar by 0.53 per cent on a weekly basis to close at 285.10.
As a result, the benchmark index of the stock market closed at 41,488 points, down 754 points or 1.8pc from the preceding week.
According to AKD Securities, a move towards political stability will dictate the market performance in the near term. “We continue to advocate companies that have dollar-denominated revenue streams, with minimal dollar-denominated cost structures, hedging them against any currency risk,” it added.
Published in Dawn, May 14th, 2023
