PSX records lackluster movement

Pakistan Stock Exchange (PSX) witnessed lackluster sentiments during the week ended on March 14, 2025.Trading activity remained subdued due to Ramadan, with average daily traded volumes plunging to 337 million shares. 

The week started on a negative note as the State Bank of Pakistan (SBP) decided to leave the interest rate unchanged, coupled with the IMF raising concern over government’s plan for resolving PKR1.25 trillion circular debt through commercial bank borrowing, kept investors cautious.

However, positive developments in ongoing policy-level discussions with IMF improved sentiment during the last two trading sessions, enabling the benchmark index to close on Friday at 115,536 points, with weekly gains of 1,137 points or up 1.0%WoW.

As per news flows, IMF has agreed to cut the FBR tax target by PKR620 billion, lowering total revenue target to PKR12.35 trillion, while assuring readjustments in expenditure by authorities to maintain a primary surplus of PKR2.4 trillion.

Notably, FBR tax collection during 8MFY25 missed the target by PKR600 billion.

The IMF revised Pakistan’s GDP growth forecast to range between 2.0 to 2.25% from 3.6% earlier, while also lowering its inflation projection to 7.0% from 12.5%.

Meanwhile, Moody’s upgraded Pakistan’s banking sector outlook to positive from stable, along with upward revision in GDP projection.

Worker remittance increased by 39%YoY to US$3.1 billion during February 2025.

Foreign exchange reserves held by SBP eroded by US$152 million to US$11.1 billion as of March 07, 2025.

Other major news flow during the week included: 1) China rolls over US$2 billion loan to Pakistan for one more year, 2) GoP mulls higher petrol levy amid revenue shortfalls 3) Passenger car sales increased by 44.6%YoY to 67,135 units during first eight months of the current financial year, 4) GoP hikes gas tariff for captive power plants on IMF prodding, and 5) ECC approves amendments to net-metering regulations, cuts buyback rate to PKR10/unit.

Miscellaneous, and Inv. Banks/ Cos. were amongst the top performing sectors, while Jute, Synthetic & Rayon, and Glass & ceramics remained laggards.

Major selling was recorded by Mutual Funds with a net sell of US$7.6 million. Banks absorbed most of the selling with a net buy of US$7.6 million.

Top performing scrips of the week were: PABC, PSO, MARI, JDWS, and DGKC, while laggards included: IBFL, ISL, TGL, INIL, and PGLC.

According to AKD Securities, the market is expected to remain positive with the potential announcement of a staff-level agreement on the first review over the weekend acting as a key trigger for momentum.

The market is anticipated to sustain its upward trajectory, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.

The top pick of the brokerage house include: MEBL, MCB, HBL, FFC, ENGROH, OGDC, PPL, PSO, LUCK, FCCL, INDU, ILP, and SYS.

 

 

 

                                                                                           

Pakistan Stock Exchange benchmark index up 2.84%WoW

The week ended on March 29, 2024 witnessed bullish trend at Pakistan Stock Exchange. Overall, the first four trading days cumulatively added around 2,000 points pts, with the benchmark index closing at 67,005 points, up 2.84%WoW on Friday, following a slight profit-taking session noted on the last trading day of the week.

Positivity loomed over the successful last review of IMF’s SBA, the new incumbent government's steps and commitment towards reforms. A new tax regime ordered for retailers and wholesalers, piloting initially in major cities, aimed to broaden the tax base. While similar taxation measures have failed previously, if successful this time, these could set the stepping stone for tax base broadening.

With FTSE Russell retaining Pakistan in the secondary emerging market for the next six months, further optimism prevailed.

Inflation outlook also presented a positive stance, with March 2024 CPI expected at 20.6%YoY, turning current real interest rates into positive territory after 38 months.

GDP growth for 2QFY24 was reported at 1.0%YoY, supported by a 5% annual growth in the agriculture sector, but dragged down by a 0.8%YoY contraction in industrial activity.

On the political front, reconstituting economic councils/committees, with the exclusion of the finance minister from heading CCI and previously from ECC (which eventually reverted), is causing confusion among the investors and likely to cause some delays in initiating reforms.

Smuggling of petroleum products from Iran is on the rise again as indicated by OCAC and PALSP, which is likely to hit adversely local refineries.

Overall, market participation improved with daily traded volume averaging at 330.7 million shares as compared to 323.5 million shares a week ago, up 2.2%WoW.

Other major news flows during the week included: 1) Tax collection gap rose to whopping PKR 5.8 trillion, 2) Government borrowed PKR181.3 billion debt in a week; 3) M2 was up by PKR149.4 billion in a week, 4) foreign investors’ profit repatriation during 8 month of the current financial year rose 237%YoY to US$759.2 million and 5) Weekly SPI was almost flat.

Transport, Woollen and Tobacco were amongst the top performing sectors, while Jute, Leasing co., and Textile weaving were amongst the worst performers.

Major selling was recorded by Companies with a net sell of US$7.6 million. Insurance absorbed most of the selling with a net buy of US$9.0 million.

Top performing scrips of the week were: PTC, KTML, SCBPL, FFBL and THALL, while laggards included: SHEL, PGLC, PIBTL, ASL and FCEPL.

Emerging risks include additional taxation and increases in international prices. Policy rate story could again come into focus. Analysts expect the first rate cut in the final quarter of the current fiscal year.