Trading volumes inched higher as compared to last week to
525.1 million shares (up 21.0%WoW). In MSCI's February 2025 index review, one
company was added, and another was upgraded to the MSCI Frontier Markets Index
from small cap. Additionally, three securities were added and three were
removed from the MSCI Small Cap Index. On the macro front, several important
data points came in during the week, including remittances for January 2025
were reported at US$3.0 billion, up 25%YoY.
PIB auction witnessed yields declining by 25bps for the
2-year paper as well, while remaining flat for 3, 5 and 10 year tenures.
Foreign exchange reserves held by State Bank of Pakistan (SBP)
declined by US$252 million to US$11.2 billion as of February 07, 2025.
Urea sales dropped 27%YoY and DAP sales dropped 8%YoY during
January 2025. Automobile sales increased by 31%YoY to 19,372, given New Year
effect being the primary catalyst behind the sales increase alongside OEM’s
providing discounts/installment offers on selective variants.
Other major news flow during the week included: 1) Three out
of five key IMF conditions were met, 2) 1HFY25 budget deficit recorded at 1.2%
of GDP, 3) Pakistan requested rescheduling of US$3.4 billion Chinese debt, 4)
IMF appreciated ongoing reforms in judiciary, 5) Prime Minister Shahbaz met UAE
president in Abu Dhabi to further strengthen bilateral ties.
Jute, Refinery, and Woollen were amongst the top performing
sectors, while top laggards included Leasing, Vanaspati & Allied
Industries, and Textile Weaving.
Major selling was recorded by Individuals, Foreigners and
Mutual Funds with a net sell of US$17.5 million. Banks absorbed most of the
selling with a net buy of US$9.7 million.
Top performing scrips of the week were: BOP, LUCK, ATRL,
PSEL, and MLCF, while laggards included: PGLC, MEHT, BAHL, KTML, and PABC.
According to AKD Securities, the market outlook remains
positive, with the market expected to largely being driven by specific scrips
and sectors, following any trigger or corporate results.
Over the medium term, the benchmark index is anticipated to sustain its upward momentum through CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable ROEs of banks and improving cash flows of E&Ps and OMCs, benefitting from falling interest rates.
