PSX records another record high closing

Performance of Pakistan Stock Exchange (PSX) remained strong throughout the week with the benchmark index recording its highest ever closing of 118,770 points and an intraday high of 119,422 points on Thursday. However, profit taking was seen on the last trading day with the index closing at 118,442 points on Friday, March 21, 2025 - up 2,906 points or 2.52%WoW.

The optimism was driven by expectations of a successful conclusion of the IMF staff level agreement, where revisions to macroeconomic targets under the MEFP were presented, including downward adjustments to FBR’s annual tax collection target, inflation, and GDP growth.

An extra up to US$1.5 billion under climate financing was discussed as well. Additionally, positive momentum was also driven by the IMF’s approval of government’s plan to borrow PKR1.25 trillion from commercial banks to resolve circular debt, which led a rally in the E&P and OMC sectors.

On the macroeconomic front, Current Account Deficit for February 2025 was reported at US$12 million taking 8MFY25 number to a surplus of US$691 million. Moreover, fertilizer offtake dropped 36%YoY during February 2025, where Urea offtake was recorded at 347,000 tons, down 36%YoY.

Auto financing increased by 3%MoM during February 2025 as well, marking a rise for the second consecutive month.

Market participation also improved, with average daily traded volume rising by 51%WoW to 508 million shares from 337 million shares in the earlier week.

Foreign exchange reserves held by State Bank of Pakistan (SBP) rose by US$49 million to US$11.15 billion as of March 14, 2025.

Other major news flow during the week included: 1) 8MFY25 exports were up 8.4%YoY, 2) Saudi Arabia approved US$100 million Oil Facility to resume from the ongoing month, 3) World Bank approved US$102 million for Pakistan, 4) SPI declined to 1.7%YoY, and 5) GoP agreed to decrease import duties to 7.1% from the current 10.6%, as per IMF conditions.

On the main board, E&P, Cable & Electrical goods, and Refinery were amongst the top performers, while Fertilizer and Commercial Banks reported a decline.

Major selling was recorded by Individuals and Companies with a net sell of US$10.5 million. Mutual funds absorbed most of the selling with a net buy of US$13.9 million.

Top performing scrips of the week were: NML, MARI, PAEL, IBFL, and TRG, while laggards included: SCBPL, AICL, FATIMA, EFERT, and FABL.

According to AKD Securities, the market is expected to remain positive in the coming weeks, with the potential announcement of a staff-level agreement in the near term serving as a key trigger for momentum. The benchmark index is anticipated to sustain its upward trajectory, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.

The top pick of the brokerage house includes, OGDC, PPL, PSO, FFC, ENGROH, MEBL, MCB, HBL, LUCK, FCCL, INDU, ILP, and SYS.

 

 

PSX witnesses 29%WoW decline in daily trading volume

Pakistan Stock Exchange witnessed volatility throughout the week, largely influenced by corporate earnings announcements. During the week, the benchmark KSE-100 index shed 625 points or 0.54% to close at 114,256 points on Friday, January 31, 2025.

Fertilizer stocks weighed heavily on the benchmark index, following FFC’s lower-than-expected profitability. However, this was partially offset by higher-than-expected final dividends by the banks.

The week begun with State Bank of Pakistan (SBP) cutting the policy rate by 100bps to 12% amid a continued disinflationary trend.

Additionally, SBP revised its inflation forecast for FY25 to range between 5.5% to 7.5%, significantly lower than the earlier projections of 11.5% to 13.5%.

The central bank also changed its current account balance forecast to a range of a 0.5% surplus to a 0.5% deficit of GDP in FY25 as against an earlier estimate of a nominal deficit.

Meanwhile, ahead of the IMF review, authorities met another condition by notifying a gas price increase for captive power producers to PKR3,500/ mmbtu.

Market participation dropped to 15-week low, with an average daily traded volume of 498 million shares, down 29%WoW.

Foreign exchange reserves held by SBP declined by US$76 million to US$11.4 billion as of January 24, 2025.

The domestic currency weakened marginally against the greenback to PKR278.95 to a US$.

Major news flow during the week included: 1) Reko Diq deal with Saudi firm nearing finalization, 2) Only 3,651 individuals file taxable income greater than PKR100 million, 3) SBP injects PKR523.7 billion through open market operations, and 4) Weekly SPI inflation eases multi-year low at 0.44%YoY.

Textile Weaving, Automobile Assembler, and Banks were amongst the top performers, while OMCs, Engineering, and Refinery sectors were among the laggards.

Major selling was recorded by Banks and Foreigners with a net sell of US$10.4 million. Companies, Other organizations and Individuals absorbed most of the selling with a net buy of US$10.5 million.

Top performers of the week were: ATLH, NBP, KTML, AKBL, and BAHL, while the laggards included: ISL, SNGP, UNITY, AGP, and KOSM. 

According to AKD Securities, the market is expected to remain positive, with short-term market momentum largely following the upcoming corporate results.

Over the medium term, the KSE-100 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.

PSX benchmark index up 1.68%WoW

Pakistan Stock Exchange (PSX) experienced volatility throughout the week ended on December 27, 2024 due to portfolio adjustments and realignments at year-end. However, the bullish momentum prevailed, KSE-100 index posted a weekly gain of 1,838 points to close at 111,351 points, reflecting an increase of 1.68%WoW.

Major contributing sectors to this rally were commercial banks, followed by Oil & Gas Marketing Companies and INV.Banks/ INV.Cos/ Securities.Cos. T-Bill yields in the recent auction remained largely flat.

On the macroeconomic front, current account reported a surplus of US$729 million, taking 5MFY25 balance to a surplus of US$944 million.

Foreign exchange reserves held by State Bank of Pakistan (SBP) decreased by US$228 million WoW, ending the week at US$11.9 billion as of December 20, 2024.

Average daily trading volume declined by 31.0%WoW to 796 million shares, from 1.2 billion shares traded a week ago.

PKR remained stable against the greenback, closing the week at PKR278.47/US$.

Other major news flow during the week included: 1) Exports to EU surge by 14%YoY in 5MFY25 to US$4.8 billion, 2) Senate panel endorses legislation that would lead to the closure of all bank accounts of non-filers having bank balances of over PKR one million, 3) FBR announces crackdown against tax evaders, 4) GoP eyes 13.5% tax-to-GDP ratio in three years and 5) PIA to acquire 8 planes next year.

Jute, Leasing Companies, Property, Oil & Gas Marketing Companies and Glass & Cermaics were amongst the top performers, while Exchange Traded Fund, Textile Spinning, Vanaspati & Allied Industries, Transport and Woollen were amongst the worst performers.

Major net selling was recorded by Other Organizations with a net sell of US$9.3 million. Individuals absorbed most of the selling with a net buy of US$15.0 million.

Top performing scrips of the week were: PGLC, TRG, DAWH, JVDC, and FCEPL, while laggards included: PKGP, CHCC, ATRL, BNWM, and SCBPL.

Pakistan Stock Exchange is expected to remain on its upward trajectory in CY25, despite strong performance over the last two years, given the decline in interest rates to single digits.

Pakistan’s leading brokerage house, AKD Securities anticipates the KSE-100 Index would post a robust return of 55.5% in CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable ROEs of banks and improving cash flows of E&Ps and OMCs, amid falling fixed income yields.

Currently, the KSE-100 is trading at a P/E ratio of 6.0x, which remains below its 10- year historical average despite delivering a cumulative return of 130% over the past two years.

PSX benchmark index up 7.6%WoW

Pakistan Stock Exchange (PSX) continued its bullish momentum throughout the week, leading to a major increase in the benchmark index, registering its highest ever weekly point gains of 7,697 and market closed at a record high of 109,054 points, up 7.6%WoW on Friday, December 06, 2024.

The bullish momentum was fueled by November 2024 inflation recorded at 4.9%YoY, lowest in nearly six and half years, fueling expectations for continued monetary easing in the upcoming Monetary Policy Committee scheduled for December 16, 2024.

Major contributing sectors to this rally were commercial banks, followed by Fertilizer, and Oil & Gas Exploration. Interest in the banking sector continued to rise, with gross advances increasing by 21%YoY as of November 15, 2024, taking the ADR to 46.9%, with expectations of crossing the 50% threshold before the year-end to avoid ADR-based taxation.

Meanwhile, fertilizer sector advanced on ENGRO’s agreement to acquire the Jazz Tower business, coupled with the Lahore High Court’s approval of the FFC-FFBL merger.

Saudi Fund extends term of US$3 billion deposits for another year.

Trade deficit for November 2024 was reported at US$1.6 billion, down 19%YoY.

Total debt dropped by 1%MoM to PKR69 trillion in October 2024.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$620 million, following a US$500 million loan disbursement from the Asian Development Bank (ADB), taking total reserves held by SBP to US$12.0 billion as of November 29, 2024.

Market participation increased by 21.5%WoW to 1.7 billion shares, as compared to 1.4 billion shares traded in the earlier week.

PKR remained stable against the greenback, closing the week at PKR278.01 to a US$.

Other major news flow during the week included: 1) Saudi crown prince accepted invitation to visit Pakistan, 2) Oil sales surged to 25-month high, 3) Cement dispatches increased 5.58%YoY, 4) FBR decided to put more curbs on FATA/PATA steel sector and 5) Prime Minister hinted towards cut in policy rate.

Vanaspati & Allied Products, Transport, Refinery, Cable & Electrical goods and Engineering were amongst the top performing sectors.

Major selling was recorded by Individuals, Insurance companies, and foreigners with a net sell of US$26.0 million, US$21.0 million, and US$14.2 million, respectively. Mutual funds and companies absorbed most of the selling with a net buy of US$44.0 million and US$10.7 million, respectively.

Top performing scrips of the week were: CNERGY, Airlink, PABC, NML, and PAEL, while laggards included: EFUG, JVDC, HBL, AKBL, and PSEL.

Continuation of monetary easing due to disinflationary environment and improving macroeconomic environment would make investment in equities more appealing, currently trading at P/E of 5.0x and DY of 10.2%.

Moving forward, upcoming MPC meeting would remain in investor’s focus, also keeping cyclical sector attractive.

Aforementioned factors, along with declining external financing requirement under the IMF program, would keep foreigners’ interest alive.

Top picks of AKD Securities include: OGDC, PPL, MCB, FFC, PSO, LUCK, MLCF, FCCL and INDU.

 

 

 

Pakistan stock market declines by 1.6 percent in Feburary

As the global markets remained volatile, Pakistan could not remain immune. During February 2016 the benchmark PSE-100 index slide marginally and closed at 31,370 points, down by 1.60%MoM.
While upward movement in oil prices (Brent up 5.6%MoM) restricted losses to some extent, continued foreign selling (net outflow of US$39.5 million), lackluster results announcements and adverse news flows (regulatory action, legal challenges) propelled bearish pressures.
Most of the sectors were on the downward spree except commercial banks, posting decent earnings announcements, up 2.9%MoM. All other sector posted decline that included Automobiles (down 8.3% on strengthening Yen), Fixed Line Telecommunication (down 5.7% on disappointing CY15 earnings) and Food Producers (down 5% on expected slowdown in earnings growth).
An AKD Research Report hints market sentiments during March 2016 will be driven by: 1) uncertainty on the political front particularly due to the actions being taken by law enforcing agencies against the brokers’ fraternity, 2) foreign selling and 3) Monetary Policy announcement within the month. Expectations are building that with declining PIB yields (down 60bps in the recent auction) and lower than expected inflation number, reduction in discount rate can’t be ruled out.
Taking charge after a very long time, the index heavy-weight, banking sector led the rally during the month under review. The outperformance was a function of above expected earnings announcements and year-end payouts.
Cements, on the other hand, remained on the sidelines, despite positive earnings surprises by players such as MLCF, DGKC and FCCL.
Strengthening of Yen against PkR (down 6.7%during the month) reversed gains for Automobile (down 8.3%MoM) making it one of the worst performing sectors.
With an outflow of US$39.5 million during the month under review foreigners continued to trim their equity positions taking FYTD net outflow to more than US$330 million. This marks the eighth consecutive month in which there has been a net outflow of portfolio capital with selling largely being a function of the global portfolio re-alignment strategy.
While foreign flows will continue to play a major role in determining market direction/participation going forward, analysts believe the Monetary Policy announcement due this month is of importance where a few market participants (particularly some banks) are now eyeing a rate cut.
Any surprise, in this regard should bring renewed interest in cyclical and yield plays. Apart from this, clarity on the regulatory front particularly with regards to implementation of reforms (Amendments to SECP bill, Licensing of operations regulations for NBFCs, Mutual Funds amongst others) would go far in renewing foreign investor participation. Trinkets of news flows surrounding the run-up to the budget FY17 are likely to drive performance accordingly.