KARACHI: The calendar year came to a close on the Pakistan Stock Exchange (PSX) with the benchmark of share prices settling at 40,420 points, down 9.4 per cent from 2021.

Topline Securities Ltd said the stock market stayed under pressure because of economic and political problems throughout 2022.

As 2022 witnessed a 22pc fall in the rupee’s value against the dollar, the dollar-based return of the KSE-100 index remained 29pc.

The downward swing on the national bourse was in line with an international trend. Global stock markets lost $18 trillion in 2022 with a drop of approximately 20pc in the World Index of MSCI, a provider of global investment benchmarks. Its performance was the worst since the 2008 financial crisis.

Citing Bloomberg data, Topline Securities said the KSE-100 index was one of the worst-performing markets in dollar terms in 2022.

Trading activity on the PSX remained dull owing to macroeconomic issues in 2022. The average daily traded volume in the ready market PSX went down 52pc year-on-year to 230 million shares. Similarly, the average daily traded value dropped 59pc to Rs7bn, which was the lowest level since 2019.

In the futures market, volume and value per day were also down 33pc and 56pc to 94m and Rs3.6bn, respectively.

The stock market also underperformed other asset classes namely gold, which went up 45pc, one-year dollar-based Naya Pakistan Certificate (up 36pc) and the dollar (up 28pc).

Treasury bills, money market funds and property indices posted returns in the range of 12-14pc in 2022. As for the raising of fresh capital on the stock market, only three offerings took place in 2022 as opposed to eight a year ago. The number of offerings was also the lowest since 2019 when the PSX witnessed only one offering.

Foreign corporate selling continued in 2022 with a net sale of $127m. In the last seven years, foreign corporates have sold shares worth $2.5bn on the PSX.

Local mutual funds and insurance companies also trimmed their equity holdings in 2022. Funds sold $166m while insurance companies sold $128m in 2022.

Published in Dawn, january 1st, 2023