The market is anticipated to maintain a positive trajectory, supported by ongoing monetary easing, a disinflationary environment, and improving macroeconomic fundamentals, according to AKD Securities Limited.
Investors are expected to focus on upcoming inflation data and the Monetary Policy Committee’s decision next month
The Pakistan Stock Exchange (PSX) concluded the week on a strong note, with the KSE-100 index reaching an all-time high of 97,798 points, marking a 3.2% or 3,035 points increase week-on-week (WoW).
On Friday, the index hit an intraday peak of 99,630 points, falling just shy of the 100,000 milestone. The market’s bullish momentum was driven by robust performances in the Banking and Fertilizer sectors, which collectively added 2,839 points to the index.
The Fertilizer sector benefited from the ongoing amalgamation of Fauji Fertilizer Company (FFC) and Fauji Fertilizer Bin Qasim Limited (FFBL), with FFC emerging as the week’s top performer.
Banks saw increased lending activity, pushing the Advance-to-Deposit Ratio (ADR) to 44% as of October 25, 2024, up from 39% the prior week. This increase aligns with banks’ efforts to avoid higher ADR-based taxation, as the government has appealed against the Islamabad High Court’s stay order on the tax.
Bond yields also influenced market sentiment, with the latest PIB auction recording rates of 13.05% (2-year), 12.50% (5-year), and 12.84% (10-year), marking the lowest levels since March 2022. Additionally, positive remarks following the IMF interim review alleviated fears of a mini-budget, bolstering investor confidence.
Macroeconomic indicators provided further support, with the current account posting a surplus of $349 million in October 2024, resulting in a cumulative 4MFY25 surplus of $218 million compared to a deficit of $1.5 billion in the same period last year.
Average daily trading volume rose 13% WoW to 991 million shares, reflecting improved market participation. The State Bank of Pakistan’s foreign exchange reserves increased by $29 million, reaching $11.3 billion as of November 15, 2024.
Sector-wise, Fertilizer (+8.6% WoW), Pharmaceuticals (+7.1% WoW), and Banks (+6.0% WoW) were the top performers. Conversely, Jute (-7.7% WoW), Woollen (-5.4% WoW), and Leasing (-4.2% WoW) sectors underperformed.
Top-performing stocks included PSEL (+19.6% WoW), KAPCO (+18.5% WoW), GLAXO (+17.9% WoW), FFBL (+15.6% WoW), and FFC (+15.4% WoW). Key laggards were NCPL (-15.0% WoW), HCAR (-10.3% WoW), SEARL (-8.2% WoW), TRG (-7.2% WoW), and PKGP (-6.9% WoW).
Currency markets experienced marginal changes, with the Dollar Index rising 0.79% WoW to 107.53. The USD/PKR rate remained stable at 277.76, while the Euro weakened against the dollar, with EUR/USD declining by 1.16% WoW to 1.042. Similarly, GBP/USD fell 0.77% to 1.252. In contrast, the Japanese yen showed slight depreciation, with USD/JPY climbing 0.28% to 154.73.
Global indices delivered mixed results. Pakistan’s KSE-100 led gains with a 3.2% increase, while India’s Sensex rose 1.98% and the UK’s FTSE 100 gained 2.23%. Commodities saw upward trends, with Nymex WTI crude rising 4.74% WoW to $70.20 per barrel and gold gaining 4.83% to $2,687.18 per ounce.
AKD Securities projected that with monetary easing, improving macroeconomic indicators, and declining fixed-income yields, equities remain an attractive asset class. Key picks include FFC, HBL, MCB, OGDC, and PPL, as investors eye continued market positivity.
