Market
participation remained lackluster during the week, with average daily traded
volume declining to 418 million shares, from 548 million shares in the prior
week. Developments on the economic front remained encouraging, as the country
posted Current Account surplus of US$427 million in February 2026, against a
deficit of US$85 million during the same period last year, primarily driven by
higher workers’ remittances.
Industrial
activity (LSMI) expanded by 10.5%YoY in January 2026, led by growth in the
automobile and textile sectors.
Power
generation increased by 11%YoY in February 2026, supported by lower tariffs and
a shift of industrial consumers towards national grid.
Urea offtakes
declined by 28%YoY during February 2026 due to elevated channel inventory
following advance procurement in December 2025. offtakes rose 2.5x YoY over the
same period.
T-Bill
yields rose by 51 to 100bps in the first auction following SBP decision to
leave policy rate unchanged.
Other major
news flow during the week included: 1) Pakistan secures alternative fuel supply
from Gulf amid regional tensions, 2) ADB unveils US$10 billion financing strategy
for Pakistan, 3) IT exports rise 20%YoY to US$365 million, 4) REER drops to
102.5 in February 2026, and 5) GoP considering to hold fuel price till 31st
March, 2026.
Woollen,
Synthetic & Rayon and Close-End Mutual Fund were amongst the top performing
sectors, while Leather & Tanneries, Commercial Banks and Miscellaneous were
amongst the laggards.
Major
selling was recorded by Foreigners and Mutual Funds with a net sell of US$9.3
million and US$4.5 million, respectively.
Banks and
Individuals absorbed most of the selling with a net buy of US$10.3million and
US$7.4 million, respectively.
Top performing
scrips of the week were: PKGP, ABOT, IBFL, BNWM, and KOHC, while laggards
included: NBP, AICL, PABC, UNITY, and SRVI.
Going
forward, AKD Believes market sentiment will hinge on the developments in the
Middle East conflict. At the same time, investor focus will remain on the
government’s energy conservation measures, diversification of fuel imports, and
progress on the IMF review.
Over the
medium term, any de -escalation in the conflict could spark a strong market
rebound, as recent corrections have made valuations attractive.
Top picks of
the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK,
FCCL, INDU, ILP and SYS.
