KARACHI: Pakistan stocks lost much of its gains on the last day of the week due to political uncertainty. However, the market is expected to stay positive following the staff-level agreement with the International Monetary Fund and the start of the earnings season.
“We expect the market to stay positive, anticipating the IMF Executive Board’s approval and the disbursement of the first tranche of the new program,” stated brokerage Arif Habib Ltd. “Additionally, the start of the results season next week will also be closely monitored by the market.”
During the three-day trading week, the market showed positive momentum, driven by the IMF and Pakistan reaching a staff-level agreement for a new 37-month Extended Fund Facility (EFF) amounting $7 billion.
This pushed the index to an all-time high of 81,839 points on Thursday. However, political noise wiped out most of the gains made during the week, resulting in the index shedding 1,722 points on the last working day.
The market closed at 80,118 points, gaining 174 points or 0.22 per cent WoW. Average volumes arrived at 464 million shares (up 5.6 per cent week-on-week), while the average value traded settled at $ 96 million (up 29.2 per cent WoW).
Foreigner buying continued during the week, clocking in at $9.3 million compared to a net buy of $4 million last week. Major buying was witnessed in all other sectors ($5.2 million) and technology ($2 million). On the local front, selling was reported by insurance companies ($7.7 million) followed by companies ($4.4 million).
Sector-wise positive contributions came from E&Ps (207 points), technology & communication (103 points), fertilizer (83 points), cement (83 points), and automobile parts (57 points). Scrip-wise positive contributors were POL (129 points), Engro (126 points), MCB (115 points), UBL (79 points), and LUCK (68 points).
However, the sectors that mainly contributed negatively were power (249 points), tobacco (51 points), engineering (47 points), pharma (45 points) and bank (41 points). Scrip-wise negative contributions came from HUBC (155 points), HBL (91 points), FFC (73 points), NBP (63 points), and PKGP (61 points).
Analyst Wadee Zaman at JS Research said the KSE-100 touched its all-time high of 81,940 during the week on the back of optimism from a staff-level agreement (SLA) with the IMF last week. The index, however, underwent correction during the last trading session and recorded 2.1 per cent decline in a single day.
Analyst Nabeel Haroon at Topline Securities said the week started on a strong note as the index gained to post the highest ever closing of 81,840 points during the week on Pakistan’s successful negotiation with the IMF securing a new $7 billion facility.
, some profit-taking was observed on the last trading session of the week on account of increased political noise where the government showed strong displeasure over the reserved seat verdict in favour of the opposition.
On the economic front, CAD came in at $329 million taking the cumulative number to $681 million for FY24, which is the lowest in 13 years and amounts to 0.2 per cent of the GDP. The LSM index for May-24 showed positive YoY growth for the sixth consecutive month arriving at 7.33 per cent (highest YoY growth since Jun-22).
Banking-sector deposits increased 22 per cent YoY clocking in at Rs31 trillion on the back of a high policy rate this year. Meanwhile, the country’s annual textile exports reached $16.7 billion during FY24 (+0.9 per cent YoY). The government increased petrol and HSD prices during the week by Rs9.99/litre and Rs6.18/litre, respectively, owing to a rise in global oil prices.
The SBP’s exchange reserves inched up by $19 million WoW to $9.4 billion. Furthermore, the rupee appreciated against the dollar by Rs0.27 or 0.1 per cent to arrive at 278.13.