The week opened on a strong note supported by sustained
momentum from better than expected corporate results and Chinese President’s commitment
to accelerate CPEC 2.0 implementation. However, momentum eased later in the
week as investors’ sentiment turned cautious ahead of the Monetary Policy
Committee (MPC) meeting scheduled for September 15, 2025 amid ongoing floods.
In the latest PIB auction, yields declined by 11bps and 7bps
to 12.04% and 12.38% for the 10, and 15 year tenors, while the 2-year paper
yield rose by 11bps to 11.20%.
Workers’ remittances for August 2025 were reported at US$3.1
billion, up 7%YoY.
Auto sector witnessed a surge in volumes in August 2025 to
15,712 units, up 35%YoY, largely attributed to 62%YoY increase in lower segment
passenger cars sales.
Foreign exchange reserves held by the State Bank of Pakistan
(SBP) increased by US$34 million to US$14.3 billion as of September 05, 2025. PKR
appreciated by 0.04%YoY to close at PkR281.55/US$.
Other major news flow during the week included: 1) ADB and
AIIB agreed to provide guarantees to help Pakistan issue US$250 million Panda
bonds, 2) FBR unveiled plan to lift tax to GDP ratio to 18%, 3) Exports to US
declined 13%YoY in August 2025, 4) Pakistan and China sealed US$601 million
agriculture JVs, and 5) Government expressed intentions to abolish cross subsidies
and peak rates in industrial power tariffs.
Leasing Companies, Tobacco, and Engineering were amongst the
top performing sectors, while Jute, Property, and Vanaspati & Allied
industries remained laggards.
Major selling was recorded by foreigners and other organizations
with a net sell of US$12.1 million and US$3.7mn, respectively. Major buying was
recorded by Companies with a net buy of US$11.9 million.
Top performing scrips of the week were: LOTCHEM, PAKT,
MUGHAL, AVN, and LCI, while laggards included: BOP, NATF, JVDC, AGL, and AICL.
According to AKD Securities, PSX is expected to remain
positive in the coming weeks, with the upcoming IMF review and any developments
over circular debt.
The benchmark index is anticipated to sustain its upward
trajectory, with a target of 165,215 points by end December 2025. The market is
primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks,
and improving cash flows of E&Ps and OMCs, benefiting from falling interest
rates and economic stability.
Top picks of the brokerage house include: OGDC, PPL, PSO,
FFC, ENGROH, MCB, LUCK, DGKC, FCCL, INDU, and SYS.
