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PSX weekly review: Bulls dominate as KSE-100 index shoots past 42,000 mark



  • KSE-100 index gains 1,946 points.
  • Finishes four out of five sessions in green.
  • Interest in main board sectors kept  market buoyant.

KARACHI: The Pakistan Stock Exchange (PSX) recouped losses from the previous week with the benchmark KSE-100 index gaining 1,946 points or 4.9% to settle at 42,096.24. Trading remained volatile throughout the week with the index finishing four out of five sessions in the green.

PSX weekly review: Bulls dominate as KSE-100 index shoots past 42,000 mark

Interest in main board sectors kept the market buoyant as investor participation remained strong. The index maintained a healthy momentum on back of trade deficit and strengthening rupee against the US dollar. Additionally, sector-specific developments also spurred buying interest in select stocks, which further fuelled the rally. 

The market commenced the week on a negative note as inflation for the month of July 2022 came in at 24.9%, — highest level in last 14 years.

Fortunately, tables turned and the sentiment turned positive after the International Monetary Fund (IMF) announced that Pakistan had fulfilled the last remaining pre-requisite for the loan (incremental hike in petroleum development levy on MS and hi-speed diesel).

With this renewed hope, the Pakistani rupee strengthened against greenback, gaining Rs15.33, or 6%, week-on-week to close at Rs224.04 this week.

Furthermore, trade deficit significantly declined in July, down by 47% month-on-month. Moreover, reduction in international oil prices post OPEC+ meeting (WTI trading below $88 per barrel compared to $98.62 per barrel last week) further cemented the ground for bulls.

Other major developments during the week were: ministry agreed to increase oil marketing companies margin on MS (petrol), hi-speed diesel, SBP’s forex reserves fell $190 million to $8.4 billion, banks give Rs298 billion financing in PIB auction, refineries’ gross margin declined 83% in August, and oil sales in July 2022 clocked in at the lowest level since February 2021.

Meanwhile, foreign selling this week clocked in at $0.69 million against a net buy of $0.57 million recorded last week. Selling was witnessed in banks ($0.9 million), and fertiliser ($0.6 million).

On the domestic front, major buying was reported by brokers proprietary ($2.2 million), followed by mutual funds ($1.6 million).

During the week under review, average volumes clocked in at 263 million shares (up by 75% week-on-week), while average value traded settled at $34 million (up by 56% week-on-week).

Major gainers and losers of the week

Sector-wise positive contributions came from banks (+427 points), cement (+421 points), fertiliser (+112 points), chemical (+111 points), and oil marketing companies (+106 points).

On the flip side, negative contributions came from close-end mutual fund (-3 points), and real estate investment trust (-1 points).

Scrip-wise major gainers were Luck Cement (+155 points), UBL (+124 points), MCB (+87 points), PSO (+78 points), and Colgate-Palmolive (+73 points).

Meanwhile, major losers were Faysal Bank (-10 points), Mari Petroleum (-6 points), Interloop (-4 points), and Adamjee Insurance Company (-3 points).

Outlook for next week

A report from AHL predicted: “We expect the market to remain in the green zone given hopes on loan disbursement from IMF once approval is granted by the Executive Board.”

“Moreover, with the ongoing result season, certain sectors and scrips are expected to stay under the limelight given anticipation of robust results,” it said, advising investors to cherry-pick fundamentally strong blue-chip stocks.

“The KSE-100 is currently trading at a PER of 4.3x (2022) compared to the Asia-Pacific regional average of 12.5x while offering a dividend yield of 8.9% versus 2.8% offered by the region,” the brokerage house stated.

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High electricity prices moving beyond consumers’ affordability: study




A study found that rising electricity tariffs are increasingly moving beyond the affordability of the masses and adversely impacting their consumption patterns. 

The study was conducted by the Institute of Policy Studies, Islamabad titled “Impact of Rising Electricity Prices on Consumer Behavior: The Case of Power Distribution Companies in Pakistan”. 

The research study covered over 1,000 households and 140 shop owners in the top 10 cities of Pakistan.

The survey results indicate that most of the respondents have experienced moderate to significant increases in their electricity bills in recent months. 

The study further highlights the correlation between the magnitude of the bill increase and the extent of consumption reduction, indicating that higher price hikes lead to more significant efforts in reducing electricity usage. 

However, despite the overall reduction in electricity consumption, a significant portion of the survey participants reported no noticeable decrease in their bills.

It recommends the need for improved governance and regulatory measures in the energy sector along with affordable electricity tariffs and alternative payment options to accommodate different economic circumstances. 

The study also stresses the importance of addressing issues such as load shedding and raising consumer awareness about peak hours when electricity costs are higher.

Moreover, it also found that the alarming trend also caused a sharp decline in the recoveries of distribution companies (DISCOs) which can lead to difficulties in paying for power purchases from the generation companies, maintaining distribution networks, and servicing debts.

These factors further hinder the ability of DISCOs to invest in infrastructure upgrades, provide quality services, and improve the overall reliability of electricity supply.

The research emphasises effective measures to address power affordability concerns and suggests strategies for distribution companies to mitigate the negative effects of rising prices. 

Overall, the study provides valuable insights into the impact of rising electricity prices on consumer behaviour in Pakistan and offers recommendations for DISCOs and policymakers to address affordability concerns and ensure a sustainable balance between electricity prices and consumers’ ability to bear these costs.

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Will petrol price drop by Rs100 in Pakistan after Russian oil import?




With all the hype around Russian oil, the foremost question that every Pakistani has is what effect the imported oil will have on the high fuel prices.

Minister for Planning, Development and Special Initiatives Ahsan Iqbal answered the question in a recent interview with Voice of America (Urdu).

When asked whether the price of petrol — which had reached a record high of Rs282 per litre and currently stands at Rs272 per litre — would be slashed by Rs100 once Russian oil reached Pakistan, the minister responded in the negative.

“There might not be a significant difference,” he said. However, the price would “definitely reduce” once Pakistan started importing large quantities of Russian oil, he added.

“At the beginning, the quantity of imported oil is small, but as it increases in six months to a year, it will help reduce petrol prices,” Iqbal said.

Pakistan and Russia had been negotiating an oil deal for months before reaching an agreement in April.

The first shipment of Russian oil is expected to dock at the Karachi port in late May, State Minister for Petroleum Mussadik Malik had said last month. The country would seek to import 100,000 barrels per day (bpd) of Russian crude oil if the first transaction went smoothly, he had added.

Initially, the Pakistan Refinery Limited (PRL) would refine the crude oil in a trial run, to be followed later by Pak-Arab Refinery Limited (PARCO) and other refineries.

A day earlier, Malik shared that Pakistan plans to import one-third of the country’s total crude oil requirements from Russia.

The state minister revealed that the government has finalised a comprehensive energy security agreement with Russia, which would cover different aspects of the energy supply in the country.

Malik said: “We want to open an energy corridor with Central Asia like the one we have with Gulf countries.”

“This would reduce the cost of energy in the country and would be helpful in the development of industrial clusters and value additions in the agriculture sector,” he maintained.

The minister revealed that the government’s objective is to import 18-20% of its total crude oil imports from Russia, with the hope that this move will substantially lower petroleum product prices for domestic consumers.

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Power consumers to pay Re0.79 per unit more as March FCA




  • The amount will be recovered from power consumers in May.
  • The adjustment will be shown separately in consumers’ bills.
  • Charges applicable on all categories except lifeline and EVCS.

ISLAMABAD: Power consumers, who are already overburdened by soaring inflation and high fuel and electricity costs, will now have to pay Re0.79 per unit more in the month of May.

According to a notification issued by the National Electric Power Regulatory Authority (Nepra) Thursday, the additional amount is being levied in lieu of fuel cost adjustment (FCA) charges for March.

The charges would be applicable to all consumer categories except electric vehicle charging stations (EVCS) and lifeline consumers, the notification stated.

“The said adjustment will be shown separately in the consumers’ bills on the basis of units billed to the consumers in the month of March 2023,” it added.

In March, Nepra allowed power distribution companies (Discos) and K-Electric to recover deferred fuel adjustment surcharges up to Rs14.24 per unit from consumers in eight months.

According to the Nepra decision, discos will recover Rs10.34 per unit from domestic protected consumers using 0-200 units per month, Rs14.24 per unit from non-protected consumers using 0-200 units, Rs14.24 per unit from those consuming 201-300 units per month, and Rs9.90 per unit from private agricultural consumers.

The entire amount would be recovered from the electricity consumers in monthly instalments from March to October 2023.

In its decision, the authority also allowed K-Electric to recover the deferred fuel adjustment surcharge from the consumers up to Rs 13.87 per unit.

K-Electric will recover Rs9.97/unit from domestic protected consumers using 0-200 units per month, Rs13.87 per unit from non-protected consumers using 0-200 units, Rs13.87 per unit from those consuming 201-300 units per month, and Rs9.90 per unit from private agricultural consumers. The private lender will also recover the amount from March to October 2023.

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