Overall, the bullish sentiments were driven by high dividend
yielding sectors that included Fertilizers and E&P, as falling fixed-income
yields led to a rerating of these sectors.
CPI dropped down 6.93%YoY in September 2024 since January 2021.
Additionally, in the auction held on October 02, the yields for the 6-month and
12-month T-Bills decreased by 334 and 326 bps, respectively.
Trade balance for September 2024 posted US$1.78 billion
deficit.
OMCs’ aggregate offtakes were reported at 1.27 million tons
in September 2024, up 20%YoY
As against this cement offtakes for September 2024 were
reported at 3.67 million tons, down 5%YoY, largely due to subdued domestic
demand amid economic slowdown and higher constructions costs.
Average daily trading volume declined 12.1%WoW to 342.3 million
shares, from 389.4 million shares traded a week ago.
Foreign exchange reserves held by State Bank of Pakistan
(SBP) increased by US$1.2 billion WoW after the receipt of first trance from the
IMF to US$10.7 billion as of September 27, 2024.
The PKR largely remained stable against the greenback
throughout the week, closing the week at PKR 277.52 to a US$.
Other major news flow during the week included: 1) Pakistan
and Russia ink barter deal to boost agri trade 2) Refineries demand action on
key issues before upgrades, 3) Pakistan and Malaysia pledge to deepen ties, 4)
IPPs talk status remains under wraps and 5) the GoP buys back PKR351 billion
treasury bills.
Textile Spinning, Leather & Tanneries, Oil & Gas
Exploration Companies, Fertilizer and Tobacco were amongst the top performers,
on the other hand, Modarbas, Vanaspati & Allied Industries, Close-End
Mutual Funds, Woollen & Inv. Banks/ Inv. Cos/Securities Cos. were amongst
the worst performers.
Major net selling was recorded by Foreigners with a net sell
of US$26.1 million. Mutual Funds absorbed most of the selling with a net buy of
US$26.1 million.
Top performing scrips of the week were: AIRLINK, NCPL, PKGP,
PPL, and FFC, while laggards included: TRG, FHAM, INIL, EPCL, and EFUG.
According to AKD Securities, following the approval of the
IMF’s executive board and the subsequent receipt of the first tranche of
US$1.02bn, market sentiments are poised for improvement.
Additionally, easing inflation with September 2024 CPI
reported at 6.93%YoY, coupled with ongoing monetary easing, is expected to keep
equities in focus, with the market trading at an attractive P/E of 3.6x and a
DY of 13.1%.
The brokerage house recommends the sectors benefiting from
monetary easing and structural reforms, particularly high dividend yielding
stocks, which are expected to rerate as yields align with fixed income returns.
