WEEKLY SPI SHOWS MINOR DIP, YET SIGNIFICANT YEARLY RISE

The Weekly Sensitive Price Indicator (SPI) for the Combined Group saw a slight 0.09% decrease WoW, but surged by 29.41% YoY, according to Pakistan Bureau of Statistics (PBS) data.

The Combined Index settled at 323.20, slightly down from the previous week’s 323.50, yet significantly higher than last year’s 249.75.

Out of 51 items, prices of 04 (7.84%) items rose, 18 (35.30%) declined, and 29 (56.86%) remained stable.

Price Fluctuations:

  • Decreases were seen in Tomatoes (12.04%), Wheat Flour (3.80%), Garlic (2.59%), LPG (2.42%), and Wheat (2.09%).
  • Increases were noted in Chicken (4.92%), Eggs (1.61%), Shirting (0.56%), and Rice Irri 6/9 (0.15%).

Income Group Analysis:

  • Weekly SPI change ranged between -0.03% and -0.27%, with the lowest income group experiencing a 0.27% decrease and the highest income group a 0.03% dip.
  • Yearly SPI changes ranged between 22.15% and 33.5%, with the Lowest Income Group up by 22.15% and the highest up by 26.58%.

Commodity Prices:

  • Sona urea averaged Rs4,828 per 50 kg bag, down 0.02% WoW but up by 69.56% YoY.
  • Cement averaged Rs1,220 per 50 kg bag, with a marginal 0.06% decrease WoW but an 8.47% increase YoY.

PSX

The Pakistan Stock Exchange (PSX) witnessed a remarkable surge this week, with its key benchmark KSE-100 index reaching an all-time high weekly closing of 67,005, reflecting a substantial increase of 1,853 points or 2.84% WoW. This notable achievement marks the index’s fourth consecutive win, recording a quarterly gain of 7.3%.

In USD terms, the KSE-100 index displayed a robust growth of 2.92% for the week, showcasing the market’s resilience and attractiveness to foreign investors. Throughout the week, the index fluctuated within a range of 2,006 points, settling at 67,005 after reaching highs of 67,308 and lows of 65,302.

The average daily traded volume for the KSE-100 index stood at 166 million shares worth Rs8.40 billion, indicating an increase of 10.50% WoW in the number of shares traded and 11.53% WoW in traded value. Moreover, the overall PSX average traded volume (All-Share) witnessed a surge, reaching 331 million shares worth Rs11.79 billion, marking increases of 12.14% WoW in the number of shares and 6.93% WoW in traded value.

The market’s resurgence can be attributed to several factors, including the successful conclusion of general elections, anticipation of interest rate cuts, and fresh inflows from the International Monetary Fund (IMF) following the Staff-Level Agreement for the final tranche of $1.1 billion. Additionally, the government’s initiatives to restructure and privatize Pakistan International Airlines Corp (PIAA) have contributed to bolstering investor sentiment.

PIAA’s stock price has experienced a significant surge, rising by 9.3x over the past year, with a year-to-date (YTD) increase of nearly 4.5x. Mohammad Sohail, CEO of Topline Securities, highlighted the progress on privatization and potential IMF deals as key drivers propelling the benchmark KSE-100 index towards its all-time high.

Despite the market’s upward trajectory, FTSE Russell, a leading global index provider, maintained Pakistan’s status as a secondary emerging market. However, Pakistan remains on the watch list for possible demotion to Frontier market status due to a decline in its index weight over recent years.

SECTOR PERFORMANCE AND FOREIGN INVESTMENT

Commercial Banks emerged as the best performing sector, contributing 638 points to the index, followed by Fertilizer, Cement, Power Generation & Distribution, and Oil & Gas Exploration Companies. Conversely, Leather & Tanneries, Inv. Banks / Inv. Cos. / Securities Cos., Transport, Technology & Communication, and Synthetic & Rayon sectors experienced declines.

Top-performing stocks during the week included MEBL, HUBC, ENGRO, FFC, and MCB, while SYS, BAFL, SHEL, TRG, and SRVI collectively detracted points from the index.

FOREIGN INVESTMENT UPDATE: INSURANCE COMPANIES LEAD BUYING ACTIVITY

Foreign investors maintained their status as net buyers during the week in the Pakistan Stock Exchange (PSX), with a total purchase of $3.56 million worth of equities.

FLOW-WISE ANALYSIS:

1. Insurance Companies:

  • Once again, insurance companies emerged as the dominant buyers, making a substantial net investment of $9.03 million.
  • Majority of their capital, amounting to $7.55 million, was allocated to the Commercial Banks sector, reflecting confidence in the banking industry.
  • Notably, insurance companies reduced their exposure to the Oil and Gas Exploration Companies sector, divesting $5.04 million in sales.
  • It’s worth mentioning that insurance companies made a remarkable net investment of $24.1 million last week, marking the highest since March 2020.

2. Companies:

  • Conversely, companies were the leading sellers during the week, with a net sale of $7.57 million.
  • Their significant sales activity was primarily observed in the Commercial Banks sector, amounting to $6.22 million.
  • However, companies acquired $0.52 million of equities in the Fertiliser sector.

PAKISTANI RUPEE

PKR Maintains Stability Against USD in March

Throughout March, the Pakistani rupee (PKR) held steady against the US Dollar, closing the month with a slight uptick to PKR 277.95 per USD. In Friday’s trading session alone, PKR appreciated by 8.61 paisa against the greenback, a notable increase from the previous day.

PKR Interbank Exchange Rates on March 29, 2024:

  • USD to PKR: 277.95
  • Eurozone (EUR): 299.56
  • United Kingdom (GBP): 350.87
  • Japan (JPY): 1.8362
  • United Arab Emirates (AED): 75.69
  • Saudi Arabia (SAR): 74.11
  • Australia (AUD): 180.89
  • Canada (CAD): 205.13

During today’s trading session, PKR fluctuated between 278.45 (high bid) and 280.41 (low ask). In the open market, exchange companies quoted the dollar at 278.04 for buying and 282.5 for selling, reflecting ongoing dynamics.

Against other major currencies, PKR had mixed performance:

  • Euro: gained 44.04 paisa, closing at 299.56
  • British Pound: slight increase of 28.05 paisa, settling at 350.87
  • Swiss Franc: gains of 1.44 rupees, closing at 308.28
  • Japanese Yen: gained 0.02 paisa, closing at 1.8362
  • Chinese Yuan: marginal increase of 0.6 paisa, closing at 38.48

However, PKR experienced slight depreciation against some currencies:

  • Saudi Riyal: closed at 74.11, witnessing a loss of 2 paisa
  • U.A.E Dirham: decreased by 2.65 paisa to close at 75.71

Reflecting on the broader trend, PKR appreciated against the USD by 8.04 rupees or 2.89% during the current financial year, and by 3.91 rupees or 1.41% in the calendar year.

In the Money Market, the benchmark 6 Month Karachi Interbank Bid and Offer rates remained steady at 21.45% and 21.7%.

Meanwhile, the State Bank of Pakistan (SBP) injected a total of Rs2.71 trillion into the market through significant operations today, including reverse repo and Shariah Compliant Modarabah based Open Market Operation (OMO).

GOLD PRICES SURGE IN LOCAL AND INTERNATIONAL MARKETS

In the local market:

  • The per tola price of 24 karat gold increased significantly by Rs.3,800, reaching Rs.234,800 compared to its previous sale at Rs.231,000.
  • Similarly, the price of 10 grams of 24 karat gold surged by Rs.3,258 to Rs.201,303 from Rs.198,045.
  • 10 grams of 22 karat gold also saw a rise to Rs.184,528 from Rs.181,541.

The All Sindh Sarafa Jewellers Association reported an increase in silver prices as well:

  • The per tola price of silver rose by Rs.20 to Rs.2,600.
  • The price of ten grams of silver increased by Rs.17.15 to Rs.2,211.93.

On the international front:

  • The price of gold witnessed an upward trend, climbing by $40 to $2,254 from $2,214.

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