KARACHI: Stocks closed in the negative zone during the outgoing week. The market is expected to recover in the upcoming week amid expectations of positive current account data.
“We foresee a market recovery in the upcoming week, supported by the expectation of positive current account figures for December 2024,” said a research report by Arif Habib Ltd. “Additionally, many scrips are trading at appealing valuations after the recent correction, which is expected to attract investors.”
The market faced consistent pressure throughout the week, with the index closing at 113,247 points. The decline was attributed to several factors, including profit-taking by institutional investors, political uncertainty and new tax amendments imposing restrictions on non-filing PSX investors.
The market declined by 4,340 points or 3.7 per cent week-on-week, reaching 113,247 points. Average volumes arrived at 782 million shares (down 25 per cent WoW), while the average value traded settled at $115 million (down 27 per cent WoW).
Foreigner selling was witnessed this week, clocked in at $5.7 million, compared to a net buy of $0.9 million last week. Major selling was seen in banks ($3.8 million), followed by fertilizers ($2.2 million). On the local front, buying was reported by companies ($10.1 million) and individuals ($5.9 million).
Sector-wise negative contributions came from banks (967 points), fertilisers (603 points), OMCs (534 points), tech (453 points) and cement (367 points). Scrip-wise negative contributors were EFERT (423 points), MARI (343 points), PSO (333 points), UBL (301 points), and SYS (228 points).
The sectors that contributed positively were sugar (77 points), miscellaneous (11 points), and REIT funds (9 points). Scrip-wise positive contributions came from JDWS (77 points), OGDC (63 points), PKGP (48 points), MUREB (29 points), and SCBPL (19 points).
Nabeel Haroon, an analyst at Topline Securities, said the decline in the market can be attributed to profit-taking during the outgoing week.
A major development during the outgoing week was the prime minister’s statement that the United Arab Emirates (UAE) has decided to roll over a $2 billion debt due this month, providing critical financial relief to Pakistan.
Analyst Wadee Zaman at JS Research said ADB revised Pakistan’s growth target from 2.8 per cent to 3.0 per cent for FY25. To comply with IMF requirements on gas supply cuts to captive power plants, the government proposed a phased levy on gas prices, starting with a 5.0 per cent levy increasing to 10 per cent in the second phase, expected to be implemented before the IMF’s March quarter review.
Remittance inflows continued to elevate in December 2024, clocking in at the $3.1 billion mark, reflecting a 29 per cent YoY increase. Cumulatively, during H1FY25, overseas Pakistanis sent home a record $17.8 billion (+33 per cent YoY).
Meanwhile, textile exports numbers released during the week indicated a 10 per cent increase, taking them to $9.1 billion during H1FY25.
In the recent T-bill auction, the government raised Rs434 billion against a target of Rs1,200 billion, with yields declining between 22-50bps across tenors. Furthermore, the Asian Infrastructure Investment Bank agreed to provide a $500 million loan for the construction of N-5.
The PSX also held a GIS auction in which the government successfully raised Rs138 billion across all tenors, with the majority sourced from the 10-year VRR Sukuk. On the external front, SBP reserves declined by $15 million on a WoW basis, closing at $11.69 billion.
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