The key sentiment driver remained the escalating US-Iran
conflict, with Brent crude hovering around US$106/ bbl throughout the week,
amid blockade of Strait of Hormuz.
Trump termed Iran’s response to the US proposal
“unacceptable”, though sentiments improved slightly towards the week-end after
US Vice President signaled progress in talks. Pakistan’s mediation efforts drew
support from both the US and China.
Pakistan received a US$1.3 billion IMF disbursement under
the EFF and RSF programs following completion of the third EFF review and
announcement of new performance criteria.
On the macro front, fiscal deficit narrowed to lowest ever
of 0.7% of GDP or PKR856 billion in 9MFY26 as compared to 2.6% in same period
last year.
Primary surplus rose 18%YoY to PKR4.1 trillion or 3.2% of
GDP and petroleum levy collections increased 45%YoY to PKR1.2 trillion during
9MFY26.
In April 2026, Auto sales doubled to 22,000 units,
remittances rose 11.4%YoY to US$3.5 billion, taking 10MFY26 inflows to US$33.9 billion,
up 8.5%YoY
Foreign exchange reserves held by State Bank of Pakistan (SBP)
edged up to US$15.87 billion as of May 08, 2026.
Provisional GDP growth was reported at 3.7% against a target
of 4.2%, with per capita income increased to record high of US$1,901, economy
size at US$452.1 billion, and public debt at PKR80.5 trillion as of March 2026.
Other major news flow during the week included: 1) Pakistan
successfully launched its inaugural US$250 million Panda Bond in China's
onshore capital market with 5x oversubscribed at the lowest ever rate of 2.5%,
2) Government aims to keep PKR425 billion in upcoming budget for unforeseen
events, 3) Pakistan diverted gas to fertilizer plants amid Hormuz-related
supply disruptions, while Qatari LNG cargoes continued arriving through special
transit arrangements, 4) Government remains committed to abolishing PKR140 billion
gas cross-subsidy by Jane 2027 under IMF structural benchmark, and 5) Pakistan
imported 6 million barrels of US crude oil through Cnergyico for the first
time.
Top performing sectors were: Leasing Companies, Leather
& Tanneries, and Sugar & Allied Industries, while laggards included: Textile
Weaving, Textile Composite, and Synthetic & Rayon.
Major selling was recorded by Mutual Funds and Companies of
US$8.90 million and US$5.07 million respectively. Major net buyers were
Individuals and Brokers with US$14.20 million and US$1.07 million,
respectively.
Top performing scrips were: GADT, TRG, PGLC, KEL, and SRVI,
while laggards included: KTML, PIOC, AICL, UBL, and FHAM.
Going forward, Iran-US negotiations and international oil
price remain the key drivers in the near term, with any easing in Strait of
Hormuz tensions serving as a key supportive trigger.
The recent IMF disbursement of US$1.3 billion under EFF and
RSF programs, alongside Pakistan's landmark Panda Bond debut, reinforces the
improving external financing outlook. Market continues to trade at attractive
valuations.
The top picks of AKD Securities include: OGDC, PPL, UBL,
MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
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