Market participation also increased by 19%WoW, with average daily
traded volume increasing to 1,068 million shares from 899 million shares a week
ago.
The rally was supported by successful China visit of prime
minister, improving industrial activity, easing inflation, and strong corporate
results. Cement sector led the gains, driven by a pick-up in domestic demand as
local offtakes posted double-digit growth for the second consecutive month
alongside rising mortgage lending. Commercial Banks followed on the back of
robust results.
During the week, prime minister concluded his China visit,
signing US$8.5 billion worth of MoUs and JVs at the second Pak-China investment
conference.
On the macro front, August 2025 inflation came in softer
than expected at 3.0%YoY against 4.1%YoY, petroleum sales rose 7%YoY on
improved demand, and local phone manufacturing surged 2.1x YoY in July 2025.
At Wednesday’s T-bill auction, 1-month paper yield declined to
10.75%.
Trade deficit widened 30%YoY in August 2025 due to weaker
exports.
Other major news flow during the week included: 1) PKR2.6 trillion
debt repaid ahead of schedule, 2) SBP governor sees GDP growing 3.45% to 4.25%
in FY26, 3) digital currency to be legalized once regulation is in place, 4) cotton
arrivals increase by 9%YoY, and 5) SBP forex reserves increase to US$14.3 billion
as of August 29, 2025.
Cement, Refinery, and Power generation were amongst the top
performing sectors, while Jute, Synthetic & rayon, and Vanaspati &
allied industries were among the laggards.
Major selling was recorded by Banks and Foreigners amounting
to US$22.4 million. Individuals and Mutual funds absorbed most of the selling
with a net buy of US$19.7 million.
Top performing scrips of the week were: BOP, HGFA, NBP, JVDC,
and AKBL, while laggards included: PKGP, SCBPL, JDWS, IBFL, and UPFL.
According to AKD Securities, PSX is expected to remain
positive in the coming weeks, with the upcoming MPC and any developments over
circular debt remaining in the limelight.
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, MCB, LUCK, DGKC, FCCL, INDU, and SYS.
