Investors’ optimism was boosted following the announcement
of a surprise 50bps rate cut by the State Bank of Pakistan (SBP), as against
market’s anticipation of status quo. Sentiments were further boosted after
current account recorded a surplus of US$100 million for November 2025.
On the macroeconomic front, Textile exports for 5MFY26
increased by 3%YoY to US$7.8 billion, whereas, Petroleum imports declined by
2%YoY to US$6.4 billion.
Foreign exchange reserves held by SBP increased by US$1.3 billion
to US$15.9 billion as of December 12, 2025 after receiving IMF’s disbursement
under the EFF and RSF.
Other major news flow during the week included: 1) Finance Minister
rules out mini budget; insists revenue gap to be met via tax compliance, 2)
Pakistan and Uzbekistan agree to extend PTA, 3) Pakistan seeks oil deal with
Russia, 4) SIFC prioritizes brownfield refinery upgrades, and 5) Pakistan,
China advance talks on US$2.2 billion industrial complex at Port Qasim.
Jute, Real Estate Investment Trust, Commercial Banks, Close
– End Mutual Fund and Engineering were amongst the top performing sectors,
while Woollen, Modarabas, Synthetic & Rayon, Textile Spinning and Vanaspati
& Allied Industries were amongst the laggards.
Major buying was recorded by Individuals with a net buy of
US$16.7 million, while foreigners and Insurance were major sellers with net
sell of US$12.7 million and US$8.2 million, respectively.
Top performing scrips of the week were: RMPL, PIBTL, NBP,
UBL, and DCR, while laggards included: SSGC, BNWM, PIOC, IBFL, and PGLC.
AKD Securities foresees the momentum in the benchmark index
to continue given successful third tranche disbursement under the EFF &
RSF, monetary easing environment, minimal flood impact and improved credit
ratings by global agencies amid falling fixed income yields.
Investors’ sentiments are expected to further improve on the
likelihood of foreign portfolio and direct investment flows, driven by improved
relations with the United States and Saudi Arabia.
This outlook is supported by the lack of alternative
investment avenues and the attractive valuation of local equities, at a
multiple of 8.1x while offering a dividend yield of 6.5%.
The top picks of the brokerage house include: MEBL, MCB,
HBL, OGDC, PPL, PSO, ENGROH, LUCK, DGKC, FCCL, ILP and INDU.
