Monetary Policy decision came in as expected, with the central bank vowing to keeping rates unchanged, citing potential room for future easing, given that real interest rates are projected to remain positive over the next 12 months.
CPI for January was reported at 28.34%YoY, largely on account of positive energy and food price adjustments during the month.
Pakistan’s foreign exchange reserves declined by US$55 million to US$8.22 billion. PKR continued to strengthen against the greenback, ending the week at PKR279.41/USD.
Motor Gasoline and Diesel prices were raised, attributed to higher shipping premiums due to increased risks associated with conflict in the Middle East.
Average trading volumes declined by 25%WoW to 312.8 million shares, from 415.8 million shares traded a week ago. The benchmark index lost 810 points during the week, depicting a 1.27%WoW decrease.
Other major news flows during the week were: 1) Pakistan asking China to rollover US$2 billion debt, 2) six-month budget deficit rising to 2.3% of GDP, 3) IMF lowering Pakistan’s GDP growth projection to 2% for current fiscal year, 4) persisting inflation challenges, and 5) rising Kibor.
Sector-wise, Exchange traded funds and Transport were amongst the top performers, whereas Automobile parts & Accessories, Chemical and OMC were amongst the worst performers.
While major net selling of US$9.7 million was recorded by Foreigner, Insurance companies absorbed most of the selling with a net buy of US$7.0 million.
Top performing scrips during the week were: MTL, OGDC, UNITY, MCB, and AKBL, while laggards included: YOUW, PTC, COLG, KEL, and PGLC.
Next week will be overshadowed by elections, and market participation is expected to remain subdued.
Following the successful completion of the elections, the market is anticipated to gain momentum.
Furthermore, circular debt settlement plan and industrial tariff rationalization plan, if passed through the IMF node, is likely to boost investors’ confidence.
Overall, analysts maintain a bullish outlook on the Banks, E&P, and OMC sectors, anticipating opportunities for potential earnings growth and attractive Dividend Yields.
