Stocks ended the week on a mixed note, while the market is likely to remain volatile until the final results are announced and a new government formation is completed.
“In the forthcoming week, we anticipate clarity on the election result front with the emergence of the election winner(s) and the subsequent formation of the government,” stated brokerage Arif Habib Ltd. “Market participants will closely monitor these developments for their potential impact.”
Moreover, given the current result season, specific stocks are expected to attract attention due to their anticipated strong financial performance.
Throughout a three-day week, the local market exhibited a range-bound behaviour. Election-related developments predominantly influenced market sentiment. Moreover, on the last day of the week, the market showed signs of pressure due to a delay in the announcement of polling results, leading to uncertainty among investors.
Furthermore, a t-bill auction took place on Tuesday, in which SBP raised Rs64 billion against the set target of Rs480 billion. Moreover, SBP’s reserves decreased by $172 million, reaching $8.0 billion. During the week, the rupee closed at 279.28 against the dollar, strengthening by Rs0.13 or 0.05 percent week-on-week.
The market closed at 62,944 points, declining by 59 points or -0.09 percent week-on-week. Average volumes arrived at 306 million shares (down by 2.3 percent week-on-week) while the average value traded settled at $50 million (up by 21.7 percent week-on-week).
Foreign buying was witnessed during this week, clocking in at $5.7 million compared to a net sell of $9.7 million last week. Major buying was witnessed in exploration & production ($4.9 million) and commercial banks ($1.2 million). On the local front, selling was reported by mutual funds ($5.5 million) followed by other organizations ($1.2 million).
Sector-wise negative contributions came from fertilizer (60 points), technology & communication (45 points), food & personal care products (24 points), oil & gas marketing companies (15 points) and textile composite (14 points). Scrip-wise negative contributors were ENGRO (55 points), OGDC (50 points), SYS (31 points), HBL (28 points), and APL (20 points).
The sectors which mainly contributed positively were power generation & distribution (54 points), miscellaneous (40 points), commercial banks (21 points), and oil & gas exploration companies (15 points). Meanwhile, scrip-wise positive contributions came from HUBC (62 points), PSEL (48 points), PPL (45 points), BAHL (40 points), and LUCK (22 points).
Nabeel Haroon at Topline Securities said there were 3 working days during the election week in which investors preferred to remain on the sidelines and observe the developments concerning the general elections.
Apart from the general election, other major developments during the outgoing week included the news that OGRA has recommended a 20 percent increase in average gas price to Rs1,590/MMBTU, up from the previous rate of Rs1,327/MMBTU in Nov-2023.
Shagufta Irshad, an analyst at JS Research, said the KSE100 index closed the week at 62,944, losing 0.1 percent week-on-week. “The benchmark index opened with a decline of over 2,000 points on Friday, being the first trading session post the elections, over lack of clarity regarding the potential political landscape of the country,” she said. “However, the market recovered 2 percent of the loss by the end of the session as more official results were announced by ECP.”
In other news, S&P hinted at the upgradation of Pakistan's sovereign rating to "B" from "CCC+" once political stability is achieved post-elections.
As per the latest PBS numbers, a 33 percent year-onyear decline in trade deficit for 7MFY24 was recorded taking the tally to US$13.2 billion. In other news, govt sought IMF approval for the settlement of Rs1.2trn circular debt during the week. The cabinet committee also approved a restructuring of PIA despite ECP directions to defer the privatization matter of the company until the new govt is formed.