AKD Research has reviewed the performance of PSX last week and notified the likely trend for next week. Market remained volatile during the week, opening on a positive note driven by strong corporate results and optimism over the upcoming industrial policy, with the government reportedly planning to phase out the super tax over five years. Positive sentiment was further supported by Moody’s upgrading Pakistan’s rating by one notch to Caa1 from Caa2. However, delays in circular debt payments weighed on the E&P and OMC sectors, dragging the index by 214 points and 159 points, respectively. Overall, the benchmark KSE100 index gained 1,109pts or 0.76% WoW to close at 146,492pts on Friday.
Meanwhile, market participation declined 7.2%WoW to 606mn sh from 653mn sh in the prior week. Additionally, Pakistan officials are in discussions with the U.S. over the finer details of a trade deal, along with another visit of Field Martial yielding a positive outcome, with the U.S. designating BLA as a terrorist organization, a long-standing request by Pakistan. On the sectoral front, passenger car and LCV sales rose 28%YoY, supported by the low base of SPLY amid last year’s plant shutdowns.
On the currency front, PkR appreciated for the 4th consecutive week, closing at PkR282.06/US$, up 0.14%WoW. Other major news flow during the week included, 1) US$1bn 3rd IMF tranche anticipated: Aurangzeb, 2) Saudi crown prince invites PM Shehbaz Sharif to investment conference, 3) Govt presses China on Gwadar plan, 4) Debt re-profiling with Chinese IPPs: PD, FD likely to share implementation proposal, and 5) Ogra drafts new petroleum rules to resolve supply disputes. Sector-wise, Leasing companies, Textile spinning, and Auto parts were amongst the top performers, up 13.5%/7.7%/6.2 % week-over-week. On the other hand, Woollen, Jute, and OMC reported a decline of 5.7%/3.2%/2.7 % WoW, respectively.
Flow-wise, barring debt, major net selling was recorded by Banks and other organizations with a net sell of US$9.8mn and US$4.2mn, respectively. On the other hand, Mutual funds absorbed most of the selling with a net buy of US$15.3mn. Company-wise, top performers during the week were, i) AIRLINK (up 19.7%WoW), ii) THALL (up 16.8%WoW), iii) YOUW (up 15.1%WoW), iv) FABL (up 8.7%WoW), and v) FHAM (up 8.4%WoW), while top laggards were, i) UNITY (down 8.3%WoW), ii) GADT (down 7.8%WoW), iii) PSX (down 5.9% WoW), iv) BNWM (down 5.7%WoW), and v) PPL (down 4.7%WoW).
Outlook
The market is expected to remain positive in the coming weeks, with further developments over circular debt expected to drive the market, along with upcoming corporate results remaining in the limelight. The KSE100 is anticipated to sustain its upward trajectory, with a target of 165,215 points by Dec’25, primarily driven by strong earnings in fertilizers, sustained ROEs in banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability. Our top picks include OGDC, PPL, PSO, FFC, ENGROH, MCB, FCCL, KOHC, INDU, and SYS.
Courtesy – AKD Research
