However, despite the verdict announced on Friday being in
favor of the opposition party, the market managed to hold its ground.
On negotiations with IMF, the lender of last resort demanded
the abolition of Sovereign Wealth Fund (PSWF) along with the implementation of
45% tax on agriculture income.
Prime Minister's announcement of a PKR50 billion subsidy for
residential consumers of up to 200 units has yet to elicit a response from the
IMF.
Alongside, NEPRA increased energy tariffs for other consumers’
categories by PKR3.9 to PKR7.1/kWh for FY25, while reducing rates for
industrial consumers.
On the macroeconomic front, remittances for June 2024 rose
to US$3.16 billion, an increase of 44%YoY. This brought the total remittances
for FY24 to US$30.3 billion (up 11%YoY).
Meanwhile, passenger car and LCV sales dropped to their
lowest level in 15 years, with only 104,000 units sold in FY24.
With the overall volatility in market, participation also
remained down by 0.3%WoW, with the average daily traded volume remaining at 439
million shares.
On the currency front, PKR largely remained flat against the
greenback, closing the week at PKR278.4/US$.
Other major news flows during the week included: 1) the GoP
doubles PSDP spending to PKR705 billion, 2) GoP debt soars to PKR67.8 trillion
in May, 3) Gop raises PKR442 billion through T-bills, yields fall by up to
18bps, and 4) Tax-to-GDP ratio in FY24 hovers 9%.
Auto assemblers, Automobile parts & accessories, and
Woollen were amongst the top performers, while Miscellaneous, Vanaspati &
allied industries, and RIET were amongst the worst performers.
Major net selling was recorded by Individuals and mutual
funds with a net sell of US$2.58 million and US$2.48 million, respectively.
Foreigners absorbed most of the selling with a net buy of US$3.96 million.
Top performing scrips of the week were: NBP, FFBL, UNITY,
ABL and PKGP, while laggards included: SCBPL, TRG, THALL, YOUW and KTML.
According to AKD Securities, the market is expected to
maintain a positive outlook, despite the potential for a short-term lackluster
impact from recent political developments.
The rally overall is anticipated to persist due to the attractive
valuations, with the forward P/E continuing to remain below 4.0x.
Market participants focus is anticipated to remain on
upcoming inflation figures, the next Monetary Policy Committee meeting
(schedule pending announcement), and ongoing negotiations with IMF over EFF
program.
