Stocks poised for uptick on Saudi investment, IMF talks

KARACHI: Stocks witnessed a mixed trend during the outgoing week but managed to close at a record high, while the market is expected to maintain the positive momentum into next week as well, analysts said.

“The market will closely monitor the developments related to potential investments by Saudi Arabia and the Extended Fund Facility (EFF) program by the IMF,” stated brokerage Arif Habib Ltd.

“With the ongoing results season, certain scrips are anticipated to be in the limelight amid expectations of robust results.”

During the week, the market experienced mixed sentiment, yet ultimately concluded on a positive note, closing at the highest-ever index of 70,910 points. The positive momentum was driven by indications from a delegation led by Saudi Arabia's foreign minister, suggesting investment and development prospects in the country.

The market closed at 70,910, gaining 595 points (an increase of 0.85 percent). Average volumes reached 492 million shares (an increase of 36 percent week-on-week), while the average value traded settled at $77 million (an increase of 31 percent week-on-week).

Foreign buying continued during this week, clocking in at $33.9 million compared to a net buy of $4.2 million last week. Major buying was witnessed in all other sectors ($32.1 million) and commercial banks ($2.9 million).

On the local front, selling was reported by individuals ($14.4 million) followed by banks/DFIs ($11.0 million).

Sector-wise, positive contributions came from commercial banks (436 points), oil & gas exploration (167 points), power (161 points), refinery (43 points), and oil & gas marketing companies (30 points). Scrip-wise, positive contributors were HUBC (147 points), UBL (135 points), OGDC (114 points), HBL (100 points), and BAFL (94 points).

The sectors that contributed negatively were technology & communication (118 points), pharmaceuticals (31 points), engineering (30 points), miscellaneous (30 points), and automobile assembler (26 points). Scrip-wise, negative contributions came from MEBL (98 points), SYS (63 points), ENGRO (39 points), PTC (37 points), and FFC (31 points).

Analyst Nabeel Haroon at Topline Securities said that the gain can be largely credited to the Saudi Foreign Minister’s visit to Pakistan along with a delegation, where an understanding was reached to fast-track an initial $5 billion investment tranche under a broader Saudi commitment to invest $25 billion in Pakistan over the next five years.

Muhammad Waqas Ghani, an analyst at JS Research, said the refinery and auto sector stocks remained the top performers this week. The week started with the federal government announcing an increase in petrol and diesel prices by approximately Rs4.5/litre and Rs8.1/litre, respectively, owing to an increase in ex-refinery prices.

On the economic front, according to PBS data, February 2024 marks the third consecutive month of positive year-on-year growth in LSM, the longest streak since 2022.

Cumulatively, 8MFY24 LSM growth clocked in at a slightly negative 0.5 percent.

In the PIB auction held this week, the government could raise only Rs6.8 billion against a target of Rs190 billion. In the T-bills auction held during the week, cut-off yields remained broadly unchanged. Moreover, SBP reserves remained stable at US$8 billion.

Pakistan Car Sales for March 2024 clocked in at 10.5k units (including Non-PAMA), down by 3 percent MoM, and the trade deficit for the month of March 2024 clocked in at $2.3 billion (an increase of 34 percent on a month-onmonth basis).

Analyst Haroon said that a large part of the buying in foreign corporate net purchase equities during the week can be attributed to the buying of PSMC (Pakistan Suzuki Motor Company Limited) shares by Suzuki Motor Japan for delisting, which concluded on Friday, as per the communicated timeframe by the company.