With an overall positive market landscape, participation
also increased with the average daily traded volume rising to 440 million
shares as compared to 355 million shares a week ago, up 23.8%WoW.
The finance minister confirmed positive progress in talks
with the IMF, the lending authority appraising of the announced changes in
electricity and gas tariffs effective July 01, 2024, with the likelihood of a staff
level agreement (SLA) within this month.
On the inflation front, CPI for June 2024 was reported at
12.57%YoY, in-line with the consensus. Meanwhile, trade deficit for June was
reported at US$2.39bn, taking FY24 deficit to US$24.09 billion, down by 12%YoY.
On the external front, foreign exchange reserves held by
State Bank of Pakistan (SBP) rose by US$494 million on a weekly basis to
US$9.39 billion.
Finally, the domestic currency slightly weakened against the
greenback, ending the week at PKR278.38/US$ (down 0.01%WoW).
Pakistan’s Oil Marketing Companies (OMCs) recorded their
highest sales in 19 months, reaching 1.45 million tons in June 2024. Domestic
cement sales fell 4.6% to 38.18 million tons in FY24.
Other major news flows during the week included: 1) GoP
decided to shut down Pakistan Steel Mills, 2) Cabinet approved PKR5.72/unit
hike in Nepra base tariff, 3) Pak-Afghan rulers reestablish contact for talks
and 4) Power minister promised tariff relief.
Top performing sectors were INV. Banks / INV. COS./
Securities Cos, Leasing Companies, Exchange Traded Fund, Jute and Commercial
Banks, while Synthetic & Rayon, Woollen, Close-end Mutual fund, Tobacco,
and Textile Composite were amongst the worst performers.
Major net selling was recorded by Mutual Funds with a net
sell of US$13.65 million. Foreigners absorbed most of the selling with a net
buy of US$7.69 million.
Top performing scrips of the week were: AKBL, NBP, PSX, BOP
and PGLC, while laggards included: IBFL, THALL, PAKT, HGFA and FCEPL.
According to AKD Securities, market is expected to return
its focus to negotiations with the IMF, to be a key market trigger in the near
term.
The rally is expected to continue amidst the market's
attractive valuations, with the forward P/E continuing to remain below 4.0x. At
these levels, the brokerage house anticipate that sectors benefiting from
monetary easing and structural reforms will remain prominent.
Its top picks include OGDC, PPL, MARI, MCB, UBL, MEBL, HUBC,
FFC, LUCK, MLCF, FCCL and INDU.
