The Karachi Stock Market finished the week in a downtrend because of worries about safety and delays in the International Monetary Fund’s (IMF) approval of the first tranche under the $7 billion Extended Fund Facility. These problems have lowered market confidence, which has caused the standard measure to go down.
Investors’ trust was restored, though, after Moody’s raised the rating and the Ministry of Finance made positive predictions about inflation. The market went up after Moody’s raised Pakistan’s credit rating from Caa3 to Caa2. Furthermore, the Ministry of Finance predicted that From We can look at the Consumer Price Index (CPI) and that inflation would drop between 9.5% and 10.5% in August. The prediction made people hopeful that the State Bank of Pakistan might lower its policy rate for a third time in a row at its monetary policy meeting on September 12.
Analysts at Arif Habib Ltd (AHL) say that the market needed to be more robust all week because Pakistan was not on the agenda for the upcoming IMF executive board meeting. However, Moody’s rating improvement was a relief.
Besides domestic investors, foreign investors also affected market trends. In July, profit and income repatriation rose to $139.13 million from $2.16 million the previous month. The market mood also got better when Saudi Arabia offered to buy a 15% stake in the Reko Diq mining project. Since last week, the State Bank of Pakistan’s funds went up by $112 million, hitting about $9.4 billion. After going up 20 paise, the rupee finally reached Rs278.5. As a result, the Karachi Stock Exchange (KSE) 100 Index ended the week down 313 points, or 0.39%.
Financial institutions, cement, medicines, technology and communication, and leather and tanneries all had negative effects on the market. Conversely, the chemical, fertilizer, power production, and transport industries all helped cut costs. Thanks to Hub Power Company, the National Bank of Pakistan, and Mari Petroleum, fewer stocks fell overall.
According to the numbers, foreign spending went up, coming in at $3.7 million compared to $0.6 million last week. Trades increased by 4.5% on average, adding 604 million shares. Values increased by 20.5%, reaching $67 million on average.
Any new information about the IMF’s decision or the current results season may keep the market positive this coming week, according to AHL.
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