Week began on a positive note, supported by emerging
de-escalation efforts with Pakistan acting as a mediator; however, gains were
eroded in last two trading sessions as conflicting statements from the United
States and Iran heightened uncertainty.
On the domestic macro front, cut-off yields in Thursday’s
PIB auction increased by 90-225bps, with 5-year paper yield rising to 12.5%.
Moreover, Barrick Mining Corp extended the review period of
Reko Diq by 12 months in light of ongoing Middle East conflict and escalation
of domestic security issues. The aforesaid developments weighed on Bank and
E&P sectors.
IMF shared MEFP draft with Pakistan, marking progress
towards SLA for third review.
Amid the ongoing energy situation, GoP reduced the PSDP
allocation by PKR100 billion to accommodate fuel subsidies, to maintain
domestic petroleum prices in last two reviews, with an estimated two-week cost
of PKR69 billion.
Market participation rebounded post-Ramadan, with average
daily traded volumes surging to 872 million shares from 418 million shares in
prior week.
Foreign exchange reserves held by State Bank of Pakistan (SBP)
increased by US$22 million to US$16.4 billion as of March 18, 2026.
Other major news flow during the week included: 1) Pakistan
secures petroleum cargoes till April 25, 2) Foreign assistance inflows were up
18.35%YoY to US$5.862 billion during 8 months of current financial years 3)
NEPRA okays competitive bidding for power supply, and 4) Domestic cotton prices
jump sharply amid Middle East crisis.
Top performing sector of the week were Technology, Inv. Banks,
and Cements while laggards included Refinery, Power, and E&P.
Major selling was recorded by Insurance and Banks with a net
sell of US$12.5 million and US$6.8 million, respectively. Individuals absorbed
most of the selling with a net buy of US$20.0 million.
Top performing scrips of the week were: SYS, PGLC, INIL,
BNWM, and PIBTL, while laggards included: KTML, SSGC, KEL, SAZEW, and GAL.
Going forward, market sentiment will hinge on developments
of the Middle East conflict. At the same time, investor focus will remain on
the government’s energy conservation measures, diversification of fuel imports,
and progress on the IMF review.
According to AKD Securities, over the medium term, any
de-escalation in the conflict could spark a strong market rebound, as recent
corrections have made valuations more attractive, with forward P/E now at 6.4x.
Top picks of the brokerage house include: OGDC, PPL, UBL,
MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
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