Stocks expected to rebound after bearish week

KARACHI: The Pakistan Stock Exchange (PSX) is anticipated to regain positive momentum in the coming week, following a week marked by selling pressure and a decline in the KSE-100 index.

“We anticipate the market to turn positive in the coming week,” said brokerage Arif Habib Ltd. “Moreover, with the ongoing result season, certain scrips are anticipated to be in the limelight amid expectation of better results.”

The market remained negative throughout the week, driven by profit-taking, selling pressures, and some concerns related to the upcoming IMF review.

The KSE-100 index closed at 110,323 points, shedding 3,933 points or 3.44 per cent week-on-week (WoW). Average volumes arrived at 434 million shares (down 12.8 per cent WoW), while the average value traded settled at $76.0 million (down 22.9 per cent WoW).

Foreigner selling continued during this week clocking in at $9.88 million compared to a net sell of $4.7 million last week. Major selling was witnessed in all other sectors ($6.9 million) followed by cement ($2.3 million). On the local front, buying was reported by insurance companies ($9.6 million) and individuals ($8.0 million).

Sector-wise negative contributions came from oil and gas exploration companies (821 points), commercial banks (593 points), fertiliser (479 points), technology & communication (264 points), and oil and gas marketing companies (232 points). Scrip-wise negative contributors were MARI (291 points), FFC (241 points), PPL (235 points), HBL (226 points) and EFERT (202 points).

Meanwhile, the sectors that contributed positively were insurance (23 points) and REIT (4 points). Scrip-wise positive contributions came from LUCK (81 points), SAZEW (56 points), NBP (26 points), AICL (26 points) and COLG (19 points).

Analyst Nabeel Haroon at Topline Securities said the decline in the market can be attributed to selling by local and foreign corporates.

Analyst Abdul Basit at JS Research said the KSE-100 experienced a negative trend throughout the week. “The week commenced with the release of CPI data, which came in at 2.4 per cent YoY for January 2025, marking its lowest level in over nine years,” he said.

The trade deficit for 7MFY25 stood at $13.5 billion (+3 per cent YoY), while for the month of January 2025, trade balance recorded a deficit of $2.3 billion, up 18 per cent YoY, primarily due to a surge in imports.

Pakistan also signed a $1.2 billion agreement with the Saudi Fund for Development (SFD) to ensure sufficient oil imports on deferred payments for one year, which bodes well for managing external financing needs.

In other developments, following Punjab and Khyber Pakhtunkhwa (KP), the Sindh Assembly passed the Agriculture Income Tax Bill ahead of the upcoming IMF review.

Meanwhile, during 4MFY25, the SBP purchased $3.8 billion from banks, ensuring stable foreign exchange reserves and timely debt repayments.

On the fiscal front, revenue collection stood at Rs872 billion, resulting in a shortfall of Rs84 billion during January 2025, while the cumulative shortfall for 7MFY25 reached Rs468 billion. As per SBP data, foreign reserves increased by $46 million WoW, stabilising at $11.4 billion.

Moreover, the SBP raised Rs452 billion in the T-Bill auction against a target of Rs450 billion. The petroleum sales remained stable at 1.38 million tonnes in January 2025 on a YoY basis, while reporting 8.0 per cent MoM growth.

Cement dispatches in January 2025 increased by 14 per cent YoY to 3.89 million tonnes. Meanwhile, urea and DAP sales in the same month declined by 27 per cent and 6.0 per cent YoY, respectively.