AKD Research has released a report featuring a weekly review of PSX performance and an outlook for the next week.

The market maintained a bearish momentum during the week as geopolitical concerns continued to affect investor confidence. Notably, the benchmark KSE-100 index closed the week at 120,023 points, down 2,120 points or 1.74% week-over-week (WoW). Market participation followed a similar trend, with the average daily trading volume (ADTV) declining by 9.4% WoW to 822 million shares, down from 907 million shares in the same period last year (SPLY). The week began with the Monetary Policy Committee (MPC) deciding to maintain the status quo on Monday, which was in line with market expectations.

Several macroeconomic data points were released during the week, including a current account deficit (CAD) of US$103 million for May 2025 and net foreign direct investment (FDI) of US$194 million for the same month. Additionally, auctions during the week saw a reduction in the cut-off yields for Pakistan Investment Bonds (PIBs), in contrast to an increase in the cut-off yields for Treasury bills. Furthermore, the State Bank of Pakistan (SBP) reported that foreign exchange reserves rose by US$46 million WoW, ending the week at US$11.7 billion as of June 6.

On the currency front, the Pakistani Rupee (PkR) depreciated by 0.26% WoW against the US Dollar, closing the week at 283.7 PkR/US$.

Other major news items during the week included: 1) the LSM index surged by 2.3% year-over-year (YoY) in May 2025, 2) IT exports increased to US$3.5 billion in 11MFY25, up 19% YoY, 3) Urea and DAP sales rose by 5% and 135% YoY, respectively, during May 2025, 4) the government launched the National Electric Vehicle Policy, and 5) the draft tariff policy for 2025-30 was unveiled.

Sector-wise, Woollen, Jute, Modarabas, close-end mutual funds, and Transport were among the top performers, increasing by 18.3%, 14.5%, 6.7%, 4.7%, and 2.0% WoW, respectively. Conversely, sectors such as Power, Engineering, Investment Banks, Investment Companies, Securities Companies, Glass & Ceramics, and Tobacco were among the worst performers, experiencing declines of 10.2%, 5.2%, 5.1%, 3.5%, and 3.5% week-over-week (WoW), respectively.

In terms of flow, significant net selling was recorded by Mutual Funds with a net sell of US$9.9 million, followed by Insurance companies with a net sell of US$3.4 million. Conversely, Individuals absorbed most of the selling, resulting in a net buy of US$15.6 million.

Company-wise, the top performers for the week included: 1) BNWM (up 18.3% WoW), 2) YOUW (up 14.2% WoW), 3) PABC (up 5.1% WoW), 4) HGFA (up 4.6% WoW), and 5) EFUG (up 3.9% WoW). The top laggards were: 1) PKGP (down 41.0% WoW), 2) MUGHAL (down 14.4% WoW), 3) KTML (down 10.6% WoW), 4) TRG (down 10.3% WoW), and 5) FCEPL (down 7.0% WoW).

Outlook

In the short term, market performance is likely to be influenced by the ongoing regional conflict between Iran and Israel. However, in the medium term, we anticipate that the market will remain positive, with the KSE-100 index expected to sustain its upward trajectory, targeting 165,215 points by December 2025. Our optimism is supported by strong earnings in fertilisers, sustained returns on equity (ROE) in banks, and improving cash flows in exploration and production companies (E&Ps) and oil marketing companies (OMCs), all of which benefit from decreasing interest rates and economic stability. Our top picks include OGDC, PPL, PSO, FFC, ENGROH, MEBL, MCB, HBL, LUCK, FCCL, INDU, and SYS.