The two-day trading week following the Eid-ul-Fitr holidays commenced positively, with the KSE-100 index reaching an all-time intraday high of 120,797 points on Friday. The Prime Minister’s announcement of significant power tariff reductions of PKR 7.4/unit for consumers and PKR 7.59/unit for industries fueled the market’s upward momentum. To some extent, this positive development was overshadowed by concerns over the imposition of a 29% tariff on Pakistani exports by the USA. On the economic front, inflationary pressures continued to ease, CPI for Mar’25 dropping to 0.7%—the lowest level in nearly six decades. Meanwhile, Pakistan’s trade deficit showed signs of improvement, narrowing to USD 2.1bn in Mar’25 from USD 2.3bn in SPLY, further supporting market sentiment. The SBP reserves improved to USD 10.7bn, up by USD 70mn WoW. The market closed at 118,791 points, depicting an increase of 984 points | 0.8% WoW.
Sector-wise positive contributions came from i) Banks (1791pts), ii) Cement (86pts), iii) Fertilizer(49pts), iv) Tobacco (30pts), and v) Real estate investment trust (19pts). Meanwhile, the sectors that contributed negatively were i) E&Ps (410pts), ii) Power (103pts), iii) OMCs (88pts), iv) Leather & Tanneries (81pts), and v) Cable & electrical goods (45pts). Scrip-wise positive contributors were UBL (1149pts), MEBL (265pts), MCB (123pts), HBL (105pts), and BAHL (51pts). Whereas, scrip-wise negative contributions came from HUBC (128pts), OGDC (127pts), PPL (122pts), and POL (87pts).
Foreigner buying continued during this week, clocked in at USD 7.38mn, compared to a net buy of USD 3.92mn last week. Major buying was witnessed in Banks (USD 5.45mn), followed by all other sectors (USD 0.71mn). On the local front, selling was reported by Insurance companies (USD 8.82mn) and Mutual Funds (USD 6.54mn). Average volumes arrived at 488mn shares (up 54% WoW), while the average value traded settled at USD 113.6mn (up 30% WoW).
Other major news: i) OGDCL, Mari make discoveries, ii) Energy sector circular debt reaches Rs4,700bn, iii) Bank deposits decrease by nearly 2% to Rs30tr in Feb, iv) Coal imports hit three-year low, v) BankIslami launches Pakistan’s first-ever instant cheque encashment service and vi) LOTCHEM to suspend operations for inventory management.
Outlook and Recommendation
The positive momentum is expected to continue in the upcoming week. Moreover, with the result season commencing soon, certain scrips are expected to be in the limelight, driven by the expectation of better financial results.
Our preferred stocks are PSO, OGDC, PPL, FFC, FCCL, MLCF, LUCK, NBP, AKBL, HUMNL, SYS, AIRLINK and HTL. The KSE-100 is currently trading at a PER of 6.4x (2025) compared to its 10-year average of 8.0x, offering a dividend yield of ~8.2% compared to its 10-year average of ~6.5%.
Courtesy – AHL Research
