Pakistan stock exchange decline 21% in the first quarter of 2023

KARACHI: Economic and political issues affected Pakistan bourse in 1Q2023. As a result Pakistan Stock Exchange (PSX) benchmark KSE Index fell 1% in 1Q2023. With PKR falling 20% against USD, the Index was down 21% in USD terms which is highest decline after 1Q2020 where the index was down 33%.

Delay in the 9th review and Staff Level Agreement (SLA) with the IMF and increased political uncertainty continued to impact market sentiment.

As per Bloomberg, Pakistan was amongst the worst performers during the quarter. Pakistan (-21%), Nairobi (-18%), Turkey (-12%) were the worst performing markets during the quarter, whereas Laos (+48%), Lebanon (+33%), and Sri Lanka (+23%) were the best performing markets. These are total returns in USD terms.

In 1Q2023, average traded volumes in the Cash and Ready market declined by 25% YoY while volumes dropped by 21% QoQ to 173mn shares/day. The average traded value also deteriorated by 10% YoY while it was up 3% on QoQ to Rs6.5bn/day during 1Q2023.

The average volumes in the Futures market also declined by 27% YoY and 11% QoQ to 73mn shares/day. The average traded value of the same declined by 9% YoY and 10% QoQ to Rs3.4bn/day.

Foreign Corporates turned key buyers in the market during 1Q2023 with net buying of US$9mn during the quarter. To note, In last 7-years (2016-2022), foreign corporates have sold shares worth of US$2.5bn at PSX.

On local side, Mutual Funds were top sellers during the quarter with net selling of US$46mn followed by Insurance with net selling of US$37mn. On other hand, Companies, Individuals, and Banks were amongst major buyers with net buying of US$55mn, US$9mn, and US$9mn, respectively.

Key sectors that outperformed market during the quarter included Investment Banks/Securities, Glass & Ceramics and Fertilizers sectors. However, sectors that underperformed were Tobacco, Cable & Electrical, and Food & Personal Care.

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