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.
