Average trade volumes fell by 40 percent to 88 million shares during the last week at the Karachi Stock Exchange owing to unfavorable political developments and uncertainty over the outcome of the talks with the IMF.
However, macro economic data released during the week depicted signs of improvement, with the CPI coming in at lower than expected 12.91 percent. The KSE-100 closed almost flat week-on-week at 12,045 points. The much anticipated launch of Margin Trading System next week is likely to improve activity at the local bourse, said Sana Hanif, an analyst at JS Research.
Pakistan briefed the IMF during the week over the current economic situation and assured them of containing the fiscal deficit at 5.3 percent through the imposition of 15 percent flood surcharge, 1.5 percent special excise duty and increase in power tariff by 2 percent per month.
Pakistan aims to secure the $1.7 billion tranche under the Standby Arrangement programme of IMF along with the all important Letter of Comfort, which will help it get financial support from other donors.
On the political front, differences between the government and MQM (a key political ally) emerged and later on the government and the judiciary locked horns over the appointment of the NAB chairman.
Macro data released for the month of Feb was overall encouraging as the CPI came in lower at 12.91 percent. Further, remittances rose by 43 percent year-on-year to $845 million in Feb and trade gap narrowed to $895 million from $986 million last year as exports rose by 42 percent to $2.16 billion.
Foreigners emerged as net sellers of $6 million worth of equities during the outgoing week.
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