Driving the diplomatic momentum were Pakistan-proposed talks
in Tehran between the Makkah Pact states and Iran, alongside reports of renewed
US outreach to Iran ahead of the US midterm elections.
Meanwhile, supply concerns fueled by Houthi attacks on Saudi
Arabia and tanker incidents near the Strait of Hormuz kept Brent crude
elevated, up 0.7%WoW at US$117.1/ bbl as of Friday.
On the macroeconomic front, State Bank of Pakistan (SBP)
raised the policy rate by 50bps to 12.0% (its first hike since April), while
raising its FY27 remittances forecast to US$45 billion from US$44 billion and
foreign exchange reserves forecast to US$23 billion end December 2026 and US$25
billion for end June 2027.
The SBP raised PKR1.8 trillion in the latest T-bills auction
against a target of PKR1.7 trillion, with cut-off yields rising by 25-61bps
across tenors.
Foreign exchange reserves held by SBP rose to US$21.5 billion
as of October 23, 2026.
Other major news flow during the week included: 1) The US Federal
Reserve holds interest rates steady, 2) Pakistan considers raising US$500 million
via a second Panda bond in 2HFY27 without ADB/ AIIB guarantees, 3) Pakistan
secures third LNG cargo from Qatar in October, 4) SIFC lines up US$40 billion
investment pipeline across 38 projects, including a proposed US$6 billion refinery
program, and 5) Pakistan seeks new US$600 million World Bank loan tied to
structural and trade reforms.
Top performing sectors were Leasing, Transport, and Tobacco,
while the lagged included Paper & Board, Apparel, and Jute.
Major net buyers were Other Organizations (US$50.9 million)
and Individuals (US$7.3 million), major net sellers were Foreigners (US$60.6
million) and Insurance Companies (US$4.0 million).
Top performing scrips were: GHNI, CNERGY, TGL, KOHC, and
COLG, while laggards included: PKGS, INIL, LCI, AGP, and IMAGE.
AKD Securities expects the market to improve on the back of
strengthening economic indicators. Any positive development on Middle East
conflict could moderate international oil prices and serve as a key trigger for
market as it paves the way for monetary easing.
The market continues to trade at attractive valuations, with
forward P/E of 6.0x.
Top picks of the brokerage house include: OGDC, PPL, UBL,
MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
