Pakistan Stock Exchange closes almost flat

The week ended on July 19, 2024 began with the market showing bullish momentum from the outset after Pakistan and IMF reached a staff level agreement for a US$7 billion Extended Fund Facility (EFF) program, which instilled optimism amongst investors. Meanwhile the political tensions persist, as government mulls opposition party ban. Consequently, the bullish trend did not sustain throughout the week and the market faced volatility in the last session. Overall the benchmark KSE-100 index closed with a gain of 173 points or 0.22%WoW to close at 80,117 points on Friday.

Current Account Deficit (CAD) for FY24 was reported at US$681 million, down 79%YoY.

The issue of the IPPs agreements came into the limelight in the background of rising electricity prices across the country, hefty capacity payments, and uncontrolled circular debt, prompting government to order audits of several IPPs.

Concurrently, MS and HSD fuel prices were increased in the last fortnightly review.

On the external front, Textile and food export for FY24 were reported at US$16.7 billion and US$7.4 billion, up 1% and 47%YoY.

Petroleum imports dropped by 1%YoY to US$16.9 billion in FY24.

Average daily trading volume was up 5.6%WoW to 463.55 million shares as compared to 438.83 million shares a week ago.

Foreign exchange reserves by State Bank of Pakistan (SBP) increased by US$19 million on a weekly basis to US$9.42 billion as on July 12, 2024.

On the currency front, PKR appreciated by 0.1%WoW to close at 278.13/ US$ on Friday.

Other major news flow during the week included: 1) Cement dealers announced strike to protest high taxes, 2) Refineries held back US$5 billion investments over tax exemption dispute, 3) Moody’s said IMF deal to improve funding prospects for Pakistan, 4) IMF announced Pakistan economy likely to grow at 3.5% in FY25 and 5) GoP to consult UAE on PARCO.

Close-end Mutual Fund, Automobile parts & Accessories, Property and Vanaspati & Allied Industries were amongst the top performing sectors, while, Tobacco, Jute, Textile Weaving and Power Generation & Distribution were amongst the worst performers.

Major net selling was recorded by Insurance companies with a net sell of US$7.66 million. Foreigners absorbed most of the selling with a net buy of US$9.33 million.

Top performing scrips of the week were: AVN, THALL, JVDC, SNGP and EFUG, while laggards included: PKGP, PAKT, GADT, NBP and INIL.

According to AKD Securities, the positive sentiments are anticipated to persist due to the market's attractive valuations, staff level agreement with IMF and constant foreign inflow into equities.

However, escalating political tensions could dent investors’ confidence. Meanwhile, market participants’ focus would remain on upcoming corporate results, inflation figures and the next Monetary Policy Committee.