Benchmark KSE-100 index declined by 392 points, down 0.3%WoW
to close at 114,880 points on Friday, January 24, 2025. However, trading volumes
grew as compared to last week, reaching 699 million shares, up 25%WoW.
Several important data points came in during the week,
including a Current Account Surplus of US$582 million for December 2024, taking
cumulative 1HFY25 balance to US$1.21 billion.
State Bank of Pakistan (SBP) raised PKR297 billion through
T-Bills auction during the week, with 12-month yields dropping to 11.39%, down
41bps.
IMF revised Pakistan’s GDP growth forecast for 2025 to 3%
and for 2026 to 4%, slightly downwards from previous projection.
On the external front, foreign exchange reserves held by SBP
declined by US$276 million to US$11.5 billion. PKR weakened marginally against
the greenback to close at PKR278.75 to a US$.
Other major news flow during the week included: 1) GoP agrees
terms for US$1 billion loan with 2 Middle Eastern banks, 2) Saudi firm agrees to
invest up to US$1 billion in Reko Diq project, 3) Foreigners withdraw US$38.5 million
from T-Bills by January 10, 4) Pakistan to float US$200 million panda bonds in
June, 5) World Bank to lend US$20 billion to Pakistan, 6) Petrol price increases,
and 7) Urea sales increases by 58%YoY during CY24 to 6.6 million tons.
Fertilizer, Inv. Banks, and Textile weaving were amongst the
top performing sectors, while E&P, Jute, & transport sectors were among
the laggards.
Major net selling was recorded by Banks at US$14.1 million.
Foreigners and companies absorbed most of the selling with a net buy of US$11 million.
Top performing scrips of the week were: FCCL, KTML, CNERGY,
LOTCHEM, and MLCF, while laggards included: MARI, NRL, SAZEW, PGLC, and PIBTL.
According to Pakistan’s leading brokerage house, AKD Securities,
PSX is expected to remain on positive trajectory, driven by an anticipated
shift of funds from fixed income to equities amid falling fixed income yields.
The upcoming Monetary Policy Committee (MPC) meeting,
scheduled on June 27, will remain a key focus.
Over the medium term, the KSE-100 index is anticipated to
sustain its upward momentum throughout 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.
