KARACHI: Positive news flows helped lift the market this week, as the negotiations between the International Monetary Fund (IMF) and the government over the ninth review entered the final stages.

The benchmark KSE-100 Index gained almost 1,995 points during the first four sessions of the week. However, it lost 725 points in the last session, as investors’ awaited decision of the IMF negotiations, leaving a cumulative gain of 1,271 points, or 3.1 per cent, on a weekly basis.

An analyst at KASB Securities said the E&P sector was the top performer, as the news of settlement of the circular debt and the payment of hefty dividends circulated, as a part of the IMF’s negotiations.

“Moreover, the investors built positions, as the government finalised new taxation measures necessary to unlock the next $1.1 billion tranche. As part of building reserves, the government also decided to sell its stake in the regasified liquefied natural gas (RLNG) power plant. This resulted in 2.7 per cent rupee appreciation.

Moreover, the fund shared the MEFP with the government and virtual talks are expected to continue to implement the policies agreed with the government. However, the E&P sector may see a rally upon finalisation of the circular debt roadmap.”

Dealers said increased focus of the government to work towards pending reforms such as higher taxation measures and appropriate steps towards the energy tariffs for the completion of the review within the stipulated timeframe instilled confidence among the investors.

On the last trading day, Finance Minister Ishaq Dar’s statement regarding no commitment on the settlement of the outstanding gas circular debt, limited the Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited’s (PPL) gains during the week.

During the week, the government raised Rs464 billion through the Market Treasury Bills auction against a target of Rs800 billion, with the yields on short-term paper rising by 6bps, compared with the previous cutoff.

Moreover, the State Bank of Pakistan’s (SBP) forex reserves witnessed another dip, declining below $3 billion (a nine-year low). The week witnessed appreciation of the rupee against the dollar, closing 3 per cent higher (+Rs7.3) at Rs269.3/dollar, as opposed to 5 per cent depreciation recorded last week.

Pak Suzuki Motor Company (PSMC) raised car prices during the week, owing to the shortage of raw materials supply; and the cement dispatches remained dull during the seven months of FY23, declining 18 per cent to 25.8 million tonnes.

Meanwhile, in its latest Quarterly Index Review (QIR), the MSCI has announced changes in the constituents of its global indices, which will be effective from February 28, 2023.

OGDC has retained its position in the MSCI FM Pakistan Index, whereas Lucky Cement has been transferred to the MSCI FM Pakistan Small Cap Index. In addition, Engro has been added to the MSCI FM Pakistan Index. Pakistan’s weight in the MSCI FM Index is at 0.68 per cent.

The MSCI also announced other changes in the MSCI Small Cap Index; whereby, SEARLE has been deleted from the index. Overall, the review is expected to be neutral for the market.