Positive signals from the United States and Gulf countries
urging de-escalation, along with a lower-than-expected inflation reading for
April 2025, contributed to a recovery in sentiment during the final trading
session.
Corporate results also influenced stock specific
performance, particularly in the banking, cement, and technology sectors.
Inflation in April 2025 eased further to 0.28%YoY, compared to 0.69%YoY in the
previous month. In another positive development, Pakistan’s case for approval
of the US$1.0 billion second tranche and US$1.3 billion RSF program from IMF’s
executive board has been scheduled for review on May 09. However, on the fiscal
side, tax collection during the outgoing month fell short of target by PKR117 billion,
taking the 10MFY25 collection shortfall to PKR831 billion. Additionally, trade
deficit widened by 36%YoY to US$3.4 billion in April 2025, due to a 14%YoY
increase in imports and 9%YoY decline in exports.
Market participation also weakened amid the prevailing
volatility, with average daily traded volume falling by 29%WoW to 424 million
shares as against compared to 599 million shares a week ago.
Other major news flow during the week included: 1) US urging
Pakistan and India to work towards responsible resolution, 2) Consumer Confidence
Index increasing by 20.9%QoQ in 2QFY25, 3) Petrol, diesel prices declining, and
4) the GoP announcing tax relief to salaried class subject to IMF nod.
Vanaspati & Allied Industries, Sugar & Allied
Industries, and Modarabas were amongst the top performing sector, while
Transport, Refinery, and Pharmaceuticals were the laggards.
Major selling was recorded by Individuals and Foreigner with
a net sell of US$14.0 million, while Mutual funds and other organizations
absorbed most of the selling with a net buy of US$10.5 million.
Top performing scrips of the week were: AKBL, AICL, PKGP,
SYS, and JDWS, while laggards included: APG, GLAXO, CNERGY, KTML, and PPL.
According to AKD Securities, market outlook remains
positive, with anticipated rate cut, up to 100bps in the upcoming MPC meeting
on Monday, and the IMF Executive board's approval of the second tranche and RSF
program.
Moreover, the likelihood of wider scale escalation between
Pakistan and India remains lows, the brokerage house maintains an “Overweight”
stance on Banks, E&Ps, Fertilizer, Cement, OMCs, Autos, Textile, and Technology
sectors.
These sectors are likely to benefit from monetary easing,
structural reforms, reciprocal tariffs and a continued decline in commodity prices.
The top picks of the brokerage include, MEBL, MCB, FFC, OGDC,
PPL, PSO, LUCK, FCCL, INDU, and SYS.
