Investor sentiment weakened at the start of week on the news
of probable halt in US-Iran talks after Israel attacked Lebanon, and inflation
came in above policy rate at 11.7%YoY, taking real interest rates into positive
territory after 26 months. Brent crude was up 5.9%WoW to US$98.9/ bbl.
On the macroeconomic front, Pakistan's trade deficit for May
2026 decreased by 14%YoY and 39%MoM to US$2.6 billion, led by 6.6%YoY and
21%MoM decrease in imports.
FBR's provisional tax collection for 11MFY26 was reported at
PKR11.2 trillion, reflecting a shortfall of PKR25 billion against the revised
target.
Foreign exchange reserves of State Bank of Pakistan (SBP)
increased to US$17.2 billion as of May 29.
Cement dispatches for May 2026 declined by 21%YoY to 3.8 million
tons, mainly due to Eid holidays amid higher fuel prices
OMC offtakes declined by 23%YoY to 1.17 million tons during
the month, led by lower HSD offtakes.
Other major news flow during the week included: 1) GoP
announced PKR290/ US$ exchange rate for the FY27 budget, alongside a GDP growth
of 4% and inflation, 2) Pakistan secured three Qatari and one spot LNG cargo,
3) FCC questioned Punjab's royalty levy on cement, 4) OGDC made an oil and gas
discovery at Bobi Deep-1, and 5) NEPRA approved a PKR1.99/unit relief.
Top performing sectors were: Synthetic & Rayon, and
Modarabas, while laggards included: Power Generation, Oil & Gas
Exploration, and Vanaspati & Allied Industries.
Major selling was recorded by Mutual Funds of US$19.5 million,
while buying was recorded by Individuals of US$16.5 million. Top performing
scrips were: HCAR, PSX, GHNI, IBFL, and PGLC, while laggards included: GHGL,
NBP, APL, ENGROH, and PKGS.
According to AKD Securities a constructive resolution to the
US-Iran conflict, alongside the trajectory of international oil prices, would
remain the pivotal near-term catalysts for market direction.
The upcoming FY27 federal budget, scheduled for June 10,
would remain a key focus for the market. Market continues to trade at attractive
valuations.
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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