Stocks likely to stay positive as earnings season going on

KARACHI: Pakistan stocks closed higher during the outgoing week. The market is expected to remain positive amid ongoing earnings season.

“In the upcoming week, we anticipate the market to remain positive,” said brokerage Arif Habib Ltd. “Moreover, with the ongoing result season, particular stocks are anticipated to garner interest owing to their expected strong financial performance. The scrips continue to trade at attractive levels, which could further entice investors.”

The market started positively as media reports suggested that Pakistan successfully met three of the five key fiscal conditions set by the IMF for the first review of its $7 billion program. Meanwhile, MSCI announced changes to its global indices, with Pakistan’s weight in the FM Standard Index expected to be around 5.89 percent.

Overall, the market closed at 112,085.29 points, gaining 1,762 points (+1.6 per cent week-on-week). Average volumes arrived at 525 million shares (up by 20.8 per cent WoW), while the average value traded settled at $97.6 million (up by 28.5 per cent WoW).

Foreigner selling continued during this week clocking in at $5.7 million (4-days) compared to a net sell of $9.9 million last week. Major selling was witnessed in cement ($2.2 million) followed by commercial banks ($2.0 million). On the local front, buying was reported by banks / DFIs ($9.7 million) and broker proprietary trading ($5.8 million).

Sector-wise positive contributions came from cement (975 points), fertiliser (532 points), power generation & distribution (156 points), oil & gas marketing companies (145 points), and miscellaneous (106 points). Scrip-wise positive contributors were LUCK (856 points), FFC (381 points), HUBC (206 points), MARI (167 points), and EFERT (153 points).

The sectors that contributed negatively were OGMC’s (195 points) and pharmaceuticals (60 points). Scrip-wise negative contributions came from PSO (160 points), SYS (88 points), HBL (56 points), MEBL (56 points), and PKGP (47 points).

Analyst Nabeel Haroon at Topline Securities said the gain can be attributed to the decent corporate earnings announcement for the December quarter.

Major developments during the outgoing week were: remittances for Jan-2025 clocking in at $3 billion (up 25 per cent YoY and down 2.0 per cent MoM), Passenger car sales (as reported by PAMA) in January 2025 remained higher 52 per cent year-on-year, Zarea Limited new company book building that got oversubscribed by 1.9 times.

In the fixed bond PIB auction, the government raised Rs454 billion (competitive & non-competitive) against the target of Rs350 billion and cut-off yields declined in the range of 1-25 bps.

On the diplomatic front, Turkey’s president visited Pakistan, with both nations reaffirming their commitment to stronger ties and setting an ambitious $5 billion trade target.

However, the SBP’s foreign exchange reserves declined by $252 million, settling at $11.2 billion. The PKR closed at 279.21 against the USD, appreciating by PKR 0.16 (+0.06 per cent WoW).