KARACHI: Security concerns amid an inordinate delay in the IMF executive board’s approval for the much-awaited first tranche under the $7 billion Extended Fund Facility kept the market sentiments depressed, forcing the benchmark index to close the outgoing week on a bearish note.

However, a rating upgrade by Moody’s and the Ministry of Finance’s projection of Consumer Price Index-based inflation is likely to fall in the range of 9.5 to 10.5pc in August boosted investor expectations of a third straight cut in the State Bank of Pakistan’s policy rate in upcoming Sept 12 monetary policy committee meeting, helped the market to trim some losses on improved economic outlook.

Arif Habib Ltd (AHL) said the market remained lacklustre throughout the week amid ongoing concerns about Pakistan’s absence from the IMF’s upcoming executive board meeting agenda. However, Moody’s upgraded Pakistan’s credit rating on Wednesday from Caa3 to Caa2.

Additionally, foreign investors’ repatriation of profit and dividend rose significantly by 64 times to $139.13 million in July against $2.16m in the same month last year. Furthermore, Saudi Arabia offered to buy a 15 per cent stake in the Reko Diq mining project. In addition, the SBP reserves were around $9.4bn, up by $112m week-on-week—furthermore, the rupee appreciated against the greenback by 20 paise or 0.07pc at Rs278.5.

As a result, the KSE 100 index settled at 78,488.21 points after losing 313 points or 0.39pc week-on-week.

Sector-wise negative contributions came from commercial banks (369 points), cement (138 points), pharmaceuticals (96 points), technology & communication (66 points) and leather and tanneries (63 points). Meanwhile, the sectors that mainly contributed positively were power generation and distribution (176 points), fertiliser (145 points), and chemical (93 points). Scrip-wise negative contributors were Habib Bank Ltd (162 points), Bank Al-Habib Ltrd (81 points), Meezan Bank Ltd (80 points), United Bank Ltd (67 points), and Service Industries (63 points). Meanwhile, scrip-wise positive contributions came from Hub Power Company (175 points), National Bank of Pakistan (136 points), Mari Petroleum (128 points), Colgate-Palmolive (96 points), and Millat Tractors Ltd (74 points).

Foreign buying clocked in at $3.7m compared to a net sell of $0.6m last week.

The average trade volume rose 4.5pc to 604m shares while the average value jumped 20.5pc to $67m week-on-week.

According to the AHL, the market will likely stay positive next week, buoyed by the ongoing results season. Additionally, investors will be monitoring any updates related to the IMF.

Published in Dawn, September 1st, 2024