Stocks to watch budgetary proposals closely

KARACHI: Pakistan stocks witnessed a record surge during the outgoing week amid easing geopolitical tensions. The market is expected to watch budgetary proposals closely next week.

“Market participants are expected to closely monitor forthcoming budgetary proposals ahead of the federal budget announcement, whereby certain scrips could come under the limelight,” stated brokerage Arif Habib Ltd.

The KSE-100 index took a sharp turn and skyrocketed into the green zone on Monday, hitting the upper cap of the circuit breaker. The index posted a historic DoD gain of 10,123 points (+9.45 per cent), the highest ever in both absolute and percentage terms.

The rally followed a ceasefire announcement between India and Pakistan, brokered by the US, who also expressed intentions to enhance trade ties with both countries. In addition, Pakistan also secured IMF’s approval of $1 billion under the EFF and $1.4 billion under the RSF.

Overall, the KSE-100 was the best-performing market on a WoW basis, posting its highest WoW gain in five years, and closed the week at 119,649 points (+11.6 per cent WoW). Average volumes arrived at 685 million shares (up 34.8 per cent WoW), while the average value traded settled at $144.2 million (up 47.1 per cent WoW).

Foreigner selling was witnessed during this week, which clocked in at $9.13 million compared to a net buy of $1.52 million last week. Major selling was witnessed in E&Ps ($5.98 million) followed by all other sectors ($2.87 million). On the local front, buying was reported by mutual funds ($36.03 million) and insurance companies ($6.59 million).

Sector-wise positive contributions came from banks (2,711 points), E&Ps (1,937 points), fertilizer (1,338 points), cement (1,249 points), and tech (666 points). Scrip-wise positive contributors were UBL (922 points), FFC (876 points), PPL (750 points), OGDC (581 points) and LUCK (519 points).

The sectors that contributed negatively were leasing (0.03 points) and wollen (0.9 points). Scrip-wise negative contributions came from PKGP (15 points), IBFL (4 points), NESTLE (2 points) and PGLC (0.03 points).

Nabeel Haroon, an analyst at Topline Securities, said the KSE-100 index gained 11.64 per cent on a WoW basis on ceasefire between India and Pakistan with mediation from the US and the approval of the first review of the EFF programme by the IMF following which a tranche of $1 billion was disbursed to Pakistan.

Analyst Abdul Basit at JS Research said the surge was primarily driven by easing geopolitical tensions between Pakistan and India, boosting investor confidence.

The approval of the IMF’s first review, its green light for the Resilience and Sustainability Facility, and then the disbursement of the $1.02 billion tranche boosted market sentiments.

Furthermore, the current account balance for April recorded a surplus of $12 million, lower than the same period last year due to higher imports. Cumulatively, the CA remained at a surplus of $1.88 billion during 10MFY25.

In other news, Pakistan has initiated virtual technical-level discussions with the IMF on the upcoming FY26 budget, with formal policy-level negotiations to commence next week.

The government has also approved the phased privatisation plan of 24 SOEs, including PIA. As per PBS data, the LSM index recorded a 1.8 per cent YoY increase in March 2025, marking a return to positive growth after four consecutive months of YoY decline.

In the recently held T-bill auction, the SBP raised Rs664 billion against a target of Rs550 billion, with yields witnessing a significant decline of 66 to 90bps across different maturities. SBP reserves rose by $71 million WoW to $10.4 billion.