PSX this Week: This week KSE100 Index rose 1.21% closing at 43,551. (See table). A positive market performance after two weeks.
The week was shortened on account of 23rd Mar holiday. It was also a roll over week. All trading days were positive except one that remained flat. The country remained gripped in political maneuvering following no confidence move against the PM. Added to the drama were public meeting , marches and court references.
In addition in international markets Oil against started rising following increased sanction on Russia and Ukraine situation worsening. Brent again traded above $120. This will increase inflation in Pakistan. Despite pick up in exports we face current account deficit. IMF talks appear to have stalled on relief package the Government had announced. A substantial payment due to China was rolled over creating some maneuvering space for Pakistan.
TBill auction this week also pushed money market rates upward creating substantial difference from policy rate of 9.75% that was kept unchanged in previous MPC by the SBP. KIBOR now touching 12.5%, and further pressure is expected. Most probably another MPC will be called before the scheduled one as SBP had indicated.
After TBill auction rate increase National Savings has increased rates on its saving schemes.
- Defense Saving: 10.92%, +60bps
- Behbood Savings: 12.72%, +48bps
- Regular Income: 11.04%, +84bps
- Special Savings: 11.00%, +100bps
- Savings Account: 8.25%, Unchanged
- Pension: 12.72%, +48bps
Despite all this PSX was not under pressure and none of the market participants including mutual Funds appear to be punting in the market. Market in general is highly undervalued on book value and dividend yield. But presently for market to rebound things have to settle both at national as well international level.
Private credit off take reported at Rs. 911 billion from July to March 11. See FM tweet.