Notably, Thursday saw the largest single-day decline in the
index's history, when the index plunged by 6,482 points or 5.89% amid
heightened concerns over regional instability between the two neighboring countries.
On Friday the index recovered 3,648 points or 3.52% on the
expectation of the approval of a US$1.0 billion tranche under the first review
of the EFF program by the IMF’s Executive Board.
On the macro front, the central bank reduced policy rate by
100 bps to 11%. Workers’ remittances continued their strong trend, rising to
US$3.2 billion for April 2025, up 13%YoY).
The budget deficit for 9MFY25 was recorded at PKR3.0 trillion,
with the primary balance posting a surplus of PKR3.5 trillion for the same period.
IMF's Executive Board has approved the US$1.0 billion
tranche under the first review of the EFF program, alongside approving the new
RSF program of US$1.3 billion.
Average daily traded volume was recorded at 508 million
shares as compared to 424 million shares a week ago, up 20%WoW).
Foreign exchange reserves held by State Bank of Pakistan (SBP)
reserves rose by US$118 million to US$10.3 billion as of May 02, 2025.
Other major news flow during the week included: 1) India cut
water supply to Pakistan from Baglihar Dam on Chenab River, 2) Cement sales for
April 2025 were recorded at 3.34 million tons, up 8%YoY, 3) S&P Global
forecasted more rate cuts in Pakistan, 4) OMC sales in April 2025 increased by
32%YoY, and 5) GoP raised PKR299 billion through PIB auction.
Vanaspati & Allied Industries, Sugar, and Synthetic
& Rayon were amongst the top performing sectors, while Transport, Chemical,
and Refinery were the laggards.
Major selling was recorded by Mutual Funds and Individuals
with a net sell of US$34.9 million. Banks, Companies and other organizations
absorbed most of the selling with a net buy of US$31.0 million.
Top performing scrips of the week were: NESTLE, JDWS, IBFL,
and MUREB, while laggards included: AGL, SEARL, PTC, and PSX.
According to AKD Securities, market appears to have
overreacted to the ongoing escalations, as the development of nuclear
capability has significantly reduced the likelihood of full-scale war. The same
has been witnessed during escalations since both nations attained nuclear
deterrence. During past escalation periods post-nuclear capability, the market
has posted an average return of positive 3%. Meanwhile, in 3 months following
de-escalation, the market has historically delivered an
average return of +5%.
The brokerage house expects the market to rebound with
de-escalation of ongoing geopolitical tensions, alongside approval of a
US$1.0bn tranche under IMF’s EFF program and US$1.3 billion under new
arrangement of RSF.
The brokerage house maintains an ‘Overweight’ stance on
Banks, E&Ps, Fertilizer, Cement, OMCs, Autos, Textile, and Technology
sectors, as these stand to benefit from monetary easing, structural reforms and
reciprocal tariffs.
