What Was Different This Time?
Three macro overlays:
1. Current Account Surplus
January recorded a $121m surplus.
That stabilizes FX expectations.
But it also implies tight import compression — which reduces speculative liquidity.
2. IMF Discipline
Markets know fiscal tightening drains excess liquidity.
When governments “pump,” markets inflate.
When IMF conditions tighten, markets consolidate.
3. Rate Cut Expectations Moderated
A March rate cut looks unlikely.
When rate-cut momentum stalls, banks lose short-term narrative strength.
That’s repricing.
Volatility Is the Membership Fee
Warren Buffett said the market transfers money from the impatient to the patient.
In PSX, this effect is amplified because liquidity is thinner than developed markets.
Fast 6–10% corrections feel violent.
But structurally they:
• Remove leverage
• Reset weak hands
• Reduce speculative froth
• Create accumulation zones
A 7–12% consolidation in a rerated market is statistically normal.
High beta names can fall 15–25%.
That is volatility, not regime change.
Retail vs Institutional Behavior
Retail asks:
“Will tomorrow be green?”
Institutional capital asks:
“Which sector absorbs liquidity next?”
Retail reacts to points.
Institutions rotate between banks, fertilizers, tech, autos, E&Ps.
If FFC, OGDC, and UBL all moved simultaneously, the index would halt.
They rarely do.
That’s not coordination.
That’s capital sequencing.
