KARACHI: Stocks are expected to maintain their upward trajectory in the week ahead, buoyed by hopes of a successful IMF program and a slew of positive economic indicators, which could potentially propel the market to new heights, dealers said.
"We anticipate a sustained upward momentum in the forthcoming week," stated brokerage Arif Habib Ltd. "The initiation of the new program with the IMF is poised to significantly boost market sentiment."
Investors will closely monitor advancements concerning the Federal Budget 2024-25 and the realization of investments from the UAE and Saudi Arabia, both of which are anticipated to further fuel market optimism.
The market continued its bullish trend, closing the week at an all-time high level of 75,983 points. Market sentiment was driven by promising talks with the IMF. Furthermore, the UAE has agreed to invest $10 billion in Pakistan, which further bolstered the market.
The KSE-100 gained 641 points or 0.85 percent, arriving at 75,983 points. Average volumes reached 558 million shares (up by 0.7 percent week-on-week), while the average value traded settled at $64.8 million.
Foreign selling was witnessed this week, clocking in at $12.08 million compared to a net buy of $14.94 million last week. Major selling was witnessed in debt ($16.55 million) and technology ($0.63 million). On the local front, buying was reported by banks/DFIs ($10.44 million), followed by insurance companies ($5.31 million).
Sector-wise, positive contributions came from power generation & distribution (174 points), technology & communication (139 points), leather & tanneries (52 points), commercial banks (39 points), and investment banks (17 points). Scrip-wise, positive contributors were MEBL (172 points), SYS (141 points), PKGP (98 points), KEL (59 points), and SRVI (52 points).
Meanwhile, the sectors that mainly contributed negatively were fertilizer (185 points) and cement (161 points). Scrip-wise, negative contributions came from MCB (145 points), ENGRO (114 points), DAWH (107 points), POL (53 points), and THALL (52 points).
Analyst Muhammad Waqas Ghani at JS Research said the stock market reacted positively to the Prime Minister's meeting with UAE President Mohamed bin Zayed in Abu Dhabi during the week. Sheikh Mohamed assured Pakistan of support and committed to investing US$10 billion in various sectors. Throughout the week, Budget and IMF-related news continued to surface.
Pakistan's upcoming Federal Budget for FY25, scheduled for June 7, 2024, sets the stage for what could be the country's largest IMF program ever.
Nabeel Haroon, an analyst at Topline Securities, said the KSE 100 Index largely consolidated during the week where positivity was observed on the last trading session of the week on the IMF's statement that talks with Pakistan have concluded on a positive note where there has been significant progress towards reaching a staff-level agreement.
Another major development during the week was news that Pakistan and Saudi Arabia have agreed in principle to strike a deal on the Reko Diq project, whereby the Pakistan government is ready to sell its 15 percent shares in the project to Saudi investors.
On the economic front, Pakistan received gross inflows of $171 million in Roshan Digital Accounts (RDA) in April 2024. Moreover, the government raised Rs96.88 billion through the PIB auction. The cut-off yield for three-year bonds was reduced by 1bps to 16.64 percent, for five-year PIBs by 3bps to 15.45 percent, and for 10-year bonds by 5bps to 14.29 percent. The Pak Rupee depreciated by Rs0.10 or 0.035 percent week-on-week, arriving at 278.3 against the greenback.