Stock market expected to focus on IMF talks, MPC meeting: report

Pakistan’s stock market is expected to focus on ongoing negotiations with the International Monetary Fund (IMF), the upcoming Monetary Policy Committee (MPC) meeting, and corporate results due in the next two weeks.

According to a brokerage note, the trading session this week was unpredictable but ended on a high note on Friday, with the benchmark index reaching a new record closing of 70,909 points, marking a gain of 595 points or 0.85%. 

Average trading volumes were 492.37 million shares, up 43.51% from the previous week.

Market volatility was influenced by uncertainties in international crude prices, driven by tensions in the Middle East, particularly between Iran and Israel.

Key events included the visit of a Saudi delegation to Pakistan, promising significant investments. Saudi Arabia is also progressing in acquiring a 25% stake in the Reko Diq Mining project for $1 billion.

Net foreign investments in the Foreign Investors Portfolio Investment (FIPI) were steady, totaling $33.86 million by the end of the week.

The State Bank of Pakistan (SBP) repaid a $1 billion Eurobond on April 12, resulting in foreign exchange reserves closing the week at $8.0 billion.

Fuel prices rose, with petrol and diesel increasing by Rs 4.53 and Rs 8.14 per liter respectively, due to higher global crude prices.

Other significant developments included a shortfall in Pakistan Investment Bonds (PIB) sales, Pakistan’s readiness to proceed with a pipeline project with Iran, a threatened wheat production target due to rainfall, and the government’s expectation of no significant currency devaluation.

In sector performance, the Sugar & Allied Industries, Refinery, Synthetic & Rayon, Vanaspati & Allied Industries, and Textile Weaving sectors led gains. Conversely, the Miscellaneous, Woolen, and Paper & Board sectors saw declines. Major net sales were by Individuals and Banks, while Brokers were net buyers.

The brokerage note further added that despite reaching a new high, the market's forward price-to-earnings ratio remains below 5.0, suggesting positive fundamentals and opportunities in strong stocks.