LAHORE: The KSE 100 index continued its downward trend this week as the index lost 1,084 points (or -2.83 per cent), closing at 37,167 level. Investors were left dejected due to several factors this week, including a $591 million decline in the SBP’s foreign exchange reserves, strong political tension in the country and weak macro indicators.
According to a research note published by Topline Securities, sector-wise the worst performers were Commercial Banks, Oil and Gas Exploration companies, Cements and Fertilizers as they ate away 901 points, cumulatively. While on the other hand, Tobacco and Pharmaceuticals offered the market some respite, gaining 102 points, cumulatively.
Foreigners’ selling for the week was $1.1 million against $12.2 million in the previous week. This was their 34th week of consecutive selling. Among local investors’, mutual funds were also net sellers of $6.2 million, while Banks and Individuals were net buyers of $7.5 million, cumulatively.
Meanwhile, during the outgoing week, the foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $591 million to $7.5 billion on December 21, the data released showed.
Moreover, the federal cabinet approved a strategy to issue so-called ‘Panda bonds’ in the Chinese market to raise foreign exchange from global markets, though the size of the issue has not been released at the moment. The bonds will be denominated in Chinese yuan.
As per a news report, Vendors from the auto sector are claiming a recession in their sector, which they claim has lost over 12,000 jobs in the last three months, with another 50,000 jobs on the line. But the data for production and sales of automobiles and motorbikes released by Pakistan Automotive Manufacturers Association (PAMA) covering the last five months paints an altogether different picture.
Furthermore, units in Sindh Industrial Trading Estate (SITE) have been experiencing extremely low gas pressure during the last three months thereby crippling production activity and export orders which have to meet shipping schedule for timely delivery to foreign buyers. Following this, industrialists operating within the SITE area have announced to stop production and go on strike from Monday if issues are not resolved by the government.
Moreover during the outgoing week, in a complete contrast to the tradition of taking decision at the constitutional forum of the Council of Common Interest (CCI) unanimously, the PTI led government has set aside the objections raised by Sindh over sale of two RLNG power plants in a bid to raise around $2 billion within the current financial year. Prime Minister Imran Khan on Friday also granted approval for the launch of a new private airline from Sialkot International Airport.