KARACHI: Stocks recorded a mixed trend during the outgoing week, but the market is expected to perform positively in the two-day working week following the long Eid holidays.
“In the upcoming two-day trading week, shortened due to Eidul Fitr holidays, we expect the market to maintain a positive trajectory,” said a report by Arif Habib Ltd. “This optimism is driven by the anticipated inflation, with CPI expected to clock-in at 0.79 per cent, the lowest in six decades.”
The report stated that their preferred stocks are PSO, OGDC, PPL, FFC, FCCL, MLCF, LUCK, NBP, AKBL, HU MILLIONL, SYS, AIRLINK and HTL. The KSE-100 is currently trading at a PER of 6.4x (2025) compared to its 10-year average of 8.0x, offering a dividend yield of ~8.2 per cent compared to its 10-year average of ~6.5 per cent.
The KSE-100 index displayed mixed trends throughout the week, beginning on a negative note due to the proposed increase in royalty for cement companies and the IMF’s concerns over the proposed tariff cuts. However, the market rebounded later, driven by the staff-level agreement between Pakistan and the IMF for the first review of the EFF programme, facilitating the disbursement of the second tranche of $1 billion. In addition to this, the IMF and Pakistan also signed a new 28-month arrangement under the RSF, amounting to $1.3 billion.
The market closed at a level of 117,807 points, depicting a decline of 635 points or 0.5 per cent WoW. Average volumes arrived at 317 million shares (up 38 per cent WoW), while the average value traded settled at $87 million (up 27 per cent WoW).
Foreigner buying continued during this week, clocking in at $3.92 million compared to a net sell of $7.96 million last week. Major buying was witnessed in OMC’s ($4.2 million) followed by all other sectors ($1.5 million). On the local front, selling was reported by insurance companies ($10.5 million) and companies ($5.6 million).
Sector-wise negative contributions came from fertilisers (333 points), technology (280 points), cement (196 points), leather & tanneries (107 points), and textile (54 points). Scrip-wise negative contributors were FFC (239 points), SYS (198 points), SRVI (107 points), EFERT (106 points) and CHCC (106 points).
The sectors that contributed positively were banks (488 points), power, pharma (76 points), E&Ps (72 points) and tobacco (41 points). Scrip-wise positive contributions came from UBL (462 points), HUBC (169 points), OGDC (115 points), MEBL (112 points) and PAKT (41 points).
Nabeel Haroon at Topline Securities in the monthly review of the market said the KSE-100 index increased by 4.0 per cent on MoM basis, this gain can be attributed to staff level agreement with IMF, circular debt resolution plan where news flow suggest that significant progress has been made and noise that government is working on plan to reduce the electricity prices.
On the economic front, Pakistan’s GDP grew by 1.73 per cent YoY in Q2FY25, while GDP growth for H1FY25 stood at 1.54 per cent, compared to 2.33 per cent in H1FY24. Meanwhile, in the T-bill auction, the SBP raised Rs640 billion, slightly below the target of Rs650 billion. Major developments during the month were: CPI for the month of February coming in at 1.5 per cent, the lowest reading in 113 months; in its monetary policy meeting held this month, the SBP kept the policy rate unchanged at 12 per cent; and remittances for the month of February clocked in at $3.1 billion (up 39 per cent YoY and 4.0 per cent MoM).
