Benchmark KSE-100 managed to hold back gains made during the beginning of the week. KSE-100 index closed the previous week at 34,190 points, gaining 288 points up by 0.9%WoW.
The average volumes of 86.6mn shares during the week were 40.9% lower as compared to last week. This indicated that Investors remain wary of the economic and political situation.
The investor’s sentiments remained swinging as the IMF executive board approval for the proposed US$ 6 billion financing support over the next three years came with SECP’s approval of Search And Seizure Rules which raised Investors Apprehension.
As investors deal with the erratic nature of regulatory actions, where an announced ‘crack-down’ holds the potential for drastic, knee-jerk negativity, while long term externalities are still positive, the lack of cohesion between regulatory agencies may deplete sentiment over the short term. In the lead up to the end of month MPC (where AKD Research estimates further hike of 150bps), Banks offers a refuge in otherwise unruly waters.
The ongoing political environment will keep investors cautious as Maryam Nawaz, daughter of Ex-Prime Minister Nawaz Sharif have made controversial allegations against the accountability judge that Judgement against Nawaz Sharif was made under pressure.
On a positive side, Pakistan is likely to receive the first tranche of $1 billion from IMF bailout package this week while political noise along with economic uncertainty would keep Index under pressure.
Investors are expected to remain focused on Commercial Banks as upcoming Monetary Policy is expected at month end where Interest Rates are expected to rise further (by up to 150 bps).