KARACHI: The ambiguity about the government’s plans to reduce the energy sector’s circular debt and industrial tariff to 9 cents per unit weighed down investor sentiments in the outgoing week.

However, the benchmark index managed to settle in the green despite aggressive selling by foreign investors amid uncertainty about the interest rate decision in the upcoming monetary policy review on Jan 29.

Arif Habib Ltd said the market witnessed a rally at the onset of the outgoing week, followed by reports of the government planning to release Rs1.2 trillion to the energy chain to reduce circular debt.

However, by the middle of the week, the market turned red after the Ministry of Finance raised objections to the plan.

Furthermore, there was a notable decline in cut-off yields for the three-month, six-month and 12-month treasury bills by 50 basis points, 56 bps and 62 bps.

Meanwhile, State Bank’s reserves increased by $243 million, reaching $8.2bn. During the outgoing week, the local currency closed at 279.59 against the US dollar, strengthening by 0.11pc week on week.

As a result, the benchmark KSE 100-share index settled at 63,813 points, climbing up by 531 points or 0.84pc compared to the previous week.

As for positive contributions by different sectors, oil and gas exploration contributed 319 points to the index, followed by commercial banks (273 points), fertiliser (114 points), cement (30 points), and leather and tanneries (25 points).

The sectors that contributed negatively included technology and communication (-124 points), power generation and distribution (-63 points), miscellaneous (-33 points), automobile assembler (-28 points), and paper and board (-13 points).

As for companies, positive contributors were the Oil and Gas Development Company (336 points), Engro Fertilisers (131 points), Bank AL Habib Ltd (114 points), Meezan Bank (75 points), and HabibMetro Bank (63 points).

The negative contributions were Pakistan Petroleum Ltd (-81 points), Systems Ltd (-66 points), Fauji Fertiliser (-55 points), Hubco (-41 points) and PSO (-32 points).

Foreign selling continued during the outgoing week, clocking in at $22.7m compared to a net sell of $1.2m the preceding week. Major selling was witnessed in commercial banks ($6.7m) and fertiliser ($4.5m).

Published in Dawn, January 28th, 2024