Market participation slowed during the week, with average daily
traded volumes decreasing by 24%WoW to 791 million shares, compared to 1.0 billion shares
in the prior week.
Monday witnessed the second-largest single-day drop in the
index’s history, plunging by 16,089 points or 9.6%. The sharp fall appeared to
be an overreaction, followed by a partial recovery in the subsequent sessions.
Meanwhile, the Middle East conflict resulted in the closure
of the critical Strait of Hormuz, triggering a 16.3%WoW surge in the price of
the Oil benchmark Arab Light to US$83.1/ bbl. This development raises concerns
over energy security, inflationary pressures, and the external account,
weighing on overall market sentiment despite Pakistan’s ability to manage the
situation.
On the macro front, inflation rose to a 16-month high of 7%
in February 2026 amid heightened volatility.
On the external front, trade deficit widened 5%YoY to US$3.0
billion in February 2026.
Cement offtakes recorded a 13%YoY increase in February 2026.
Other major news flow during the week included: 1) GoP
raises PKR555 billion through T-Bills auction; yields move up, 2) Pakistan
refinery secures crude via Fujairah, Red Sea amid Hormuz closure, 3) SBP
governor confident about GDP growth and inflation, 4) OGDC strikes major oil,
gas discovery in Kohat of daily 3,800 bpd oil and 11.2mmcfd gas, and 5) foreign
exchange reserves held by State Bank of Pakistan (SBP) rose by US$87 million to
US$16.3 billion as of February 27, 2026.
While Refinery remained the sole top performer, laggards
included Vanspati & Allied
Major selling was recorded by Mutual Funds and Foreigners
with a net sell of US$56.0 million and US$22.1 million. Banks and Companies
absorbed most of the selling with an aggregate net buy of US$49.5 million.
Top performing scrips of the week were: ATRL (up 4.8%WoW),
2) MARI (up 2.0%WoW), 3) KEL (up 2.0%WoW), 4) DHPL (up 1.7%WoW), and 5) HUMNL
(up 1.1%WoW), while laggards included: JVDC, KTML, AKBL, SSOM, and PAEL.
According to AKD Securities, market sentiments are likely to
be dictated by developments in the ongoing Middle East conflict. Meanwhile, GoP’s
ongoing efforts to address energy conservation, the ongoing IMF review, and
SBP’s commentary in upcoming MPC meeting on Monday would also remain key areas
of investor focus.
In the medium term, any de-escalation of Middle East
military conflict could trigger a significant market recovery, as the recent
correction has made market valuations much more appealing.
The brokerage house anticipates the benchmark Index to reach
263,800 by end December, 2026.
Top picks of the brokerage house include: OGDC, PPL, UBL,
MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
