PSX benchmark index up 1.6%WoW

The benchmark index of Pakistan Stock Exchange (PSX) experienced a marginally positive week, largely influenced by corporate earnings announcements. During the week, the index gained 1,762 points or 1.6%WoW to close at 112,085 points on Friday, February 14, 2025.

Trading volumes inched higher as compared to last week to 525.1 million shares (up 21.0%WoW). In MSCI's February 2025 index review, one company was added, and another was upgraded to the MSCI Frontier Markets Index from small cap. Additionally, three securities were added and three were removed from the MSCI Small Cap Index. On the macro front, several important data points came in during the week, including remittances for January 2025 were reported at US$3.0 billion, up 25%YoY.

PIB auction witnessed yields declining by 25bps for the 2-year paper as well, while remaining flat for 3, 5 and 10 year tenures.

Foreign exchange reserves held by State Bank of Pakistan (SBP) declined by US$252 million to US$11.2 billion as of February 07, 2025.

Urea sales dropped 27%YoY and DAP sales dropped 8%YoY during January 2025. Automobile sales increased by 31%YoY to 19,372, given New Year effect being the primary catalyst behind the sales increase alongside OEM’s providing discounts/installment offers on selective variants.

Other major news flow during the week included: 1) Three out of five key IMF conditions were met, 2) 1HFY25 budget deficit recorded at 1.2% of GDP, 3) Pakistan requested rescheduling of US$3.4 billion Chinese debt, 4) IMF appreciated ongoing reforms in judiciary, 5) Prime Minister Shahbaz met UAE president in Abu Dhabi to further strengthen bilateral ties.

Jute, Refinery, and Woollen were amongst the top performing sectors, while top laggards included Leasing, Vanaspati & Allied Industries, and Textile Weaving.

Major selling was recorded by Individuals, Foreigners and Mutual Funds with a net sell of US$17.5 million. Banks absorbed most of the selling with a net buy of US$9.7 million.

Top performing scrips of the week were: BOP, LUCK, ATRL, PSEL, and MLCF, while laggards included: PGLC, MEHT, BAHL, KTML, and PABC.

According to AKD Securities, the market outlook remains positive, with the market expected to largely being driven by specific scrips and sectors, following any trigger or corporate results.

Over the medium term, the benchmark index is anticipated to sustain its upward momentum through CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable ROEs of banks and improving cash flows of E&Ps and OMCs, benefitting from falling interest rates.