The momentum was fuelled by State Bank of
Pakistan (SBP) accelerating the pace of monetary easing with 250bps cut
resulting in policy rate to end at 15% as inflation continues to fall towards
the central bank medium term target range, providing impetus to cyclical
sectors.
MSCI added eight Pakistani scrips while
removing one from its MSCI FM Small Cap Index as part of its November review.
Furthermore, an IMF mission is scheduled to
arrive Pakistan for the first review of the US$7 billion Extended Fund Facility
(EFF), which was originally due in March 2025 but will take place four months
ahead of schedule.
Cement offtakes for October 2024 was
reported at 4.36 million tons, up 9%YoY.
Workers’ remittance remained robust and
reported at US$3.0 billion for October 2024, taking 4MFY25 remittances to
US$11.8 billion (up 35%YoY).
Foreign exchange reserves held by SBP increased
by US$18 million WoW to US$11.2 billion as of November 01, 2024.
Average daily trading volume rose to 896.1 million
shares from 682.8 million shares traded a week ago, up 31.2%WoW.
On the currency front, PKIR largely
remained stable against the greenback throughout the week.
Other major news flow during the week included:
1) Qatar to invest US$3 billion in diverse sectors 2) exports up 13.45%YoY to
U$10.88 billion during first four months of the current financial year, 3)
Eurobond sale planned for the next financial year, 4) Tax exemptions in FY24
amounted to PKR3.8 trillion, and 5) GoP to raise PKR8.7 trillion debt to pay
maturing loans.
Refinery, Exchange traded fund, Jute,
Mutual Funds and Paper & Board were amongst the top performers, Synthetic
& Rayon, Tobacco, Real Estate Investment Trust, Banks & Leather &
Tanneries.
Major net selling was recorded by
Individuals with a net sell of US$13.6 million. Mutual Funds emerged major
buyers with net a net buy of US$22.0 million.
Top performing scrips of the week were:
PIBTL, HCAR, BOP, PKGS. and FCEPL, while top laggards included: SCBPL, IBFL,
FABL, SRVI, and HBL.
Continuation of monetary easing due to
disinflationary environment and improving macroeconomic environment is likely
to make investment in equities more appealing.
Aforementioned factors, along with
declining external financing requirement under the IMF program, would keep
foreigners’ interest alive.
AKD Securities recommend sectors that
benefit from monetary easing and structural reforms. However, modest economic
recovery may limit the upside for cyclicals.
Top picks of the brokerage house include: OGDC, PPL, MCB, MEBL, FFC, PSO, LUCK, MLCF, FCCL and INDU.
