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

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  • 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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Significant surge in the price of gold in Pakistan

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On Friday, the price of gold in Pakistan continued to increase.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of 24-karat gold per tola has risen by Rs2,200, reaching Rs249,000.

The price of 10-gram 24-karat gold increased by Rs1,886, reaching a total of Rs213,477. On Thursday, the cost of 10 grammes of 22-karat gold was Rs195,687.

The global gold market likewise had a rising trajectory. As per APGJSA, the worldwide rate was $2,404 per ounce, showing a decline of $24 during the course of the trading day.

The local market witnessed constant silver prices at Rs2,900 per tola.

Market observers attribute the increase in gold prices to other variables, such as volatility in the global market, currency exchange rates, and economic conditions. The ongoing surge in gold prices is likely to impact investment choices and consumer behaviour in the near future.

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Gold prices in Pakistan have risen by Rs 1,200 per tola.

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The price of one tola of 24 carat gold rose by Rs1,200 and reached Rs246,800 on Thursday, compared to its previous sale price of Rs245,600 on the last trading day.

According to the All Sindh Sarafa Jewellers Association, the cost of 10 grammes of 24 karat gold rose by Rs1,029 to reach Rs211,591, compared to the previous price of Rs210,562. Similarly, the price of 10 grammes of 22 carat gold jumped from Rs193,016 to Rs193,959.

The price of silver remained unchanged at Rs2,900 per tola and Rs2,486.28 per ten grammes.

According to the association, the international market price of gold rose by $10, reaching $2,382 from $2,372.

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The federal government has declared wage and pension increments for its employees.

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The Ministry of Finance has formally declared a rise in the remuneration and retirement benefits of personnel working for the federal government, offering substantial economic alleviation.

According to the notification, personnel in grades 1 to 16 will experience a 25% increment in their salaries, while officials in grades 17 to 22 will be granted a 20% rise. The implementation of this modification will commence on July 1, 2024, and will be applicable to the employees’ fundamental remuneration.

In addition, retired federal government employees would receive a 15% rise in their pension payments. This increase is applicable to retirees from both the civilian and military sectors. It is important to mention that employees who retire on or after July 1, 2024, will also qualify for this pension rise.

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The 15% increase in pension will be computed based on the amount of pension received by retired employees after deductions. Nevertheless, the letter specifies that ad hoc aid will not be factored into the calculations for pension and gratuity.

Moreover, this increment will have no effect on the calculation of housing rent allowances for employees.

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