KARACHI: Stock prices experienced a downturn at the start of the outgoing week in view of the upcoming mini-budget, said Arif Habib Ltd.

The mini-budget was presented to parliament last Wednesday as Finance Minister Ishaq Dar announced tax measures that would generate an additional Rs170 billion in revenue for the remainder of the fiscal year.

Additionally, inflationary pressures were further exacerbated by recent increases in gas and electricity prices, contributing to the overall negative market sentiments. Petrol and diesel prices were also increased by Rs22.20 per litre and Rs17.20 per litre, respectively.

Despite these challenges, there were some positive developments in the stock market. Foreign exchange reserves of the State Bank of Pakistan (SBP) jumped by $276 million to settle at $3.2bn.

Additionally, the rupee appreciated 2.4pc week-on-week against the dollar and closed at 262.8.

As a result, the benchmark of representative shares closed at 41,119 points, down 623 points or 1.49pc from a week ago.

Sector-wise, negative contributions came from oil and gas exploration (238 points), technology and communication (103 points), miscellaneous (72 points), commercial banking (56 points) and cement (53 points).

Sectors that contributed positively were power generation and distribution (66 points) and fertiliser (56 points).

Scrip-wise, negative contributors were Oil and Gas Development Company Ltd (110 points), Pakistan Petroleum Ltd (85 points), Pakistan Services Ltd (69 points), TRG Pakistan Ltd (64 points) and Unilever Pakistan Foods Ltd (35 points).

Meanwhile, scrip-wise positive contributions came from the Hub Power Company Ltd (61 points), Engro Corporation Ltd (59 points), Engro Fertilisers Ltd (26 points), Meezan Bank Ltd (25 points) and Rafhan Maize Products Company Ltd (23 points).

Foreign buying continued in the outgoing week and clocked in at $1.6m versus a net purchase of $3.2m a week ago. Major buying was witnessed in exploration and production ($1.04m) and technology and communication ($0.42m).

On the local front, selling was reported by mutual funds ($6.1m) and insurance ($1.8m). The average daily volume was 154m shares, down 46pc from a week ago. The average daily value traded settled at $25.4m, down 44pc on a week-on-week basis.

According to AKD Securities, the stock market may remain jittery in the near future on the expectation of higher inflation driven by the weakness in the rupee and a hike in utility tariffs. “We continue to advocate scrips that have dollar-denominated revenue streams to hedge against the currency risk,” it added.

Published in Dawn, February 19th, 2023