KARACHI: The stock market witnessed volatility in the outgoing week but closed on a strong note. Amid attractive valuations, the market is expected to keep the positive momentum next week.
“We expect the market to maintain its positive momentum in the coming week, supported by certain scrips trading at attractive valuations, which are likely to continue enticing investor interest,” said a report by Arif Habib Limited Research. “Moreover, with the result season commencing from next week, certain scrips are expected to be in the light, driven by the expectation of strong financial results.”
The market experienced volatility throughout the week, primarily driven by political uncertainties and escalating crude oil prices. However, on the economic front, positive developments provided some support.
Despite these mixed signals, the KSE-100 index gained 2,025 points (+1.8 per cent week-on-week) to close at 115,272 points. Average volumes arrived at 558 million shares (down 28.7 per cent WoW), while the average value traded settled at $115.8 million (up 1.1 per cent WoW).
Foreigner selling continued during this week and clocked in at $8.7 million (4-days) compared to a net sell of $5.7 million last week. Major selling was witnessed in banks ($3.5 million) followed by other sectors ($2.6 million). On the local front, buying was reported by individuals ($12.8 million) and companies ($8.5 million).
Sector-wise positive contributions came from commercial banks (619 points), power generation (357 points), pharmaceutical (320 points), cement (199 points) and technology & communication (195 points). Scrip-wise positive contributors were UBL (427 points), HUBC (360 points), MARI (120 points), SEARL (100 points), and LUCK (97 points).
Meanwhile, the sector that contributed negatively was sugar (23 points). Scrip-wise negative contributions came from OGDC (64 points), PPL (53 points), PABC (31 points), AKBL (30 points) and JDWS (23 points).
According to a research report by Topline Securities, this gain can be accredited to recovery after the market declined by around 3.7 per cent last week as value investors came in to buy the dip. Besides, positive contributions came from the last trading session of the week on the back of the conviction of the former prime minister on corruption charges.
Analyst Abdul Basit at JS Research said during the week, the current account balance arrived at a surplus of $582 million for December 2024, taking H1FY25 surplus to $1.2 billion, mainly led by higher remittances and controlled trade deficit.
Further, the UAE confirmed the rollover amounting to $2 billion for another year, maturing in January 2025. Pakistan is also preparing to launch panda bonds with an initial offering target of $200-250 million, aiming to support external financing further.
The World Bank has pledged to provide $40 billion to Pakistan over the next 10 years under the Country Partnership Framework (CPF).
In the recent PIB auction, the government raised Rs385 billion against a target of Rs350 billion, with yields dropping by 19 to 61bps varying between different tenures.
In other news, the cabinet approved the ongoing negotiations with 14 IPPs, estimated to provide power consumers relief of up to Rs137 billion annually.
Large scale manufacturing index posted a negative growth of 4.0 per cent YoY during November 2024, while the 5MFY25 LSM index fell 1.2 per cent YoY. SBP reserves remained stable at $11.7 billion (up $30 million WoW). Passenger car sales surged by around 60 per cent in December 2024.