PSX benchmark index up 1.68%WoW

Pakistan Stock Exchange (PSX) experienced volatility throughout the week ended on December 27, 2024 due to portfolio adjustments and realignments at year-end. However, the bullish momentum prevailed, KSE-100 index posted a weekly gain of 1,838 points to close at 111,351 points, reflecting an increase of 1.68%WoW.

Major contributing sectors to this rally were commercial banks, followed by Oil & Gas Marketing Companies and INV.Banks/ INV.Cos/ Securities.Cos. T-Bill yields in the recent auction remained largely flat.

On the macroeconomic front, current account reported a surplus of US$729 million, taking 5MFY25 balance to a surplus of US$944 million.

Foreign exchange reserves held by State Bank of Pakistan (SBP) decreased by US$228 million WoW, ending the week at US$11.9 billion as of December 20, 2024.

Average daily trading volume declined by 31.0%WoW to 796 million shares, from 1.2 billion shares traded a week ago.

PKR remained stable against the greenback, closing the week at PKR278.47/US$.

Other major news flow during the week included: 1) Exports to EU surge by 14%YoY in 5MFY25 to US$4.8 billion, 2) Senate panel endorses legislation that would lead to the closure of all bank accounts of non-filers having bank balances of over PKR one million, 3) FBR announces crackdown against tax evaders, 4) GoP eyes 13.5% tax-to-GDP ratio in three years and 5) PIA to acquire 8 planes next year.

Jute, Leasing Companies, Property, Oil & Gas Marketing Companies and Glass & Cermaics were amongst the top performers, while Exchange Traded Fund, Textile Spinning, Vanaspati & Allied Industries, Transport and Woollen were amongst the worst performers.

Major net selling was recorded by Other Organizations with a net sell of US$9.3 million. Individuals absorbed most of the selling with a net buy of US$15.0 million.

Top performing scrips of the week were: PGLC, TRG, DAWH, JVDC, and FCEPL, while laggards included: PKGP, CHCC, ATRL, BNWM, and SCBPL.

Pakistan Stock Exchange is expected to remain on its upward trajectory in CY25, despite strong performance over the last two years, given the decline in interest rates to single digits.

Pakistan’s leading brokerage house, AKD Securities anticipates the KSE-100 Index would post a robust return of 55.5% in CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable ROEs of banks and improving cash flows of E&Ps and OMCs, amid falling fixed income yields.

Currently, the KSE-100 is trading at a P/E ratio of 6.0x, which remains below its 10- year historical average despite delivering a cumulative return of 130% over the past two years.