This optimism was reflected by the benchmark Index surging
by 1,950 points or 1.6%WoW to close the week at 121,641 points on Thursday, the
last trading day before commencement of Eid-ul Adha holidays.
Market participation was lean as average daily trading declined
to 660 million, down from 662 million shares a week ago.
Overall, opinion on the street remains that a stable fiscal
environment to continue, with no significant shift in existing tax structures
for individuals and businesses alike in the forthcoming Federal Budget (FY26).
On the macroeconomic front, trade deficit was reported at
US$2.6 billion for May 2025.
Cement saless for May 2025 were reported at 4.65 million
tons, up 9%YoY, driven by higher domestic offtakes. Analysts project domestic
cement sales to grow by 6%YoY in FY26, mainly due to the revival in
construction activity supported by a declining interest rate and lower inflationary
environment.
OMC industry sales remained on upward trajectory, rising to
1.53 million tons, up 10%YoY.
PKR remained under pressure, depreciated by 0.05%WoW against
the greenback.
Other major news flow during the week included: 1) Pakistani
officials scheduled to meet US authorities next week for the trade talks, 2)
IMF and Pakistan arrived near consensus on cut in tax rates for salaried class,
3) suggestion to hike interest rate by 2% on income from bank deposits, 4) GoP
eyes 4.2%YoY growth in FY26 and 5) ADB approves US$800 million to boost
Pakistan’s public finance.
Power Generation & Distribution, Textile Weaving,
Modarbas, Leasing Companies and Inv.Banks/ Inv.cos/ Securities.cos were amongst
the top performing sectors, while Vanaspati & Allied Industries, Synthetic
Rayon, Transport, Cable & Electrical Goods and Paper & Board were
amongst the laggards.
Major selling was recorded by Foreigners and Mutual funds
with a net sell of US$26.01 million, Companies absorbed most of the selling
with a net buy of US$8.6 million.
Top performing scrips of the week were: PKGP, FABL, NATF,
NBP and KEL, while top laggards included: POML, IBFL, SYS, APL and KTML.
According to AKD Securities, budget-related developments are
expected to drive short-term market sentiment, with the possibility of
single-digit interest rates contributing to a positive outlook over time, as
its forecast for FY26 inflation stands at 7.0%.
The benchmark index 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.
Top picks of the brokerage house include: OGDC, PPL, PSO,
FFC, ENGROH, MEBL, MCB, HBL, LUCK, FCCL, INDU, and SYS.
