The Pakistan Stock Exchange (PSX) benchmark KSE-100 index showed varying trends throughout the week ended on August 16, 2024, closing with a modest weekly loss of 0.67% at 78,045 points, according to a brokerage note.
However, market participation showed signs of recovery, with the average daily traded volume clocking at 367.68 million shares, up 6.5% WoW, compared to 345.10 million shares in the previous week.
Meanwhile, the government reports progress in negotiations with China regarding restructuring power base loans, which is expected to support a reduction in tariffs.
Furthermore, MSCI, in its August 2024 review transferred SAZEW to its Frontier Market Index, while adding six new stocks to MSCI’s Small Cap index.
On the macroeconomic front, July remittances remained robust, totalling $3.0 billion, with Saudi Arabia being the highest contributor. The SBP-held forex reserves rose by $119 million on a weekly basis to stand at $9.27 billion as of August 9, 2024.
In July 2024, auto industry sales were up 30% YoY, clocking at 10,356 units, with passenger cars and LCV sales clocking in at 8,589 units up 69% YoY.
Moreover, petrol and diesel prices have decreased by Rs R8.47 and 6.70 per litre respectively during the week. Concurrently, petroleum products imports witnessed a decrease of 27.1%MoM, reported at US$499mn for Jul’24.
On the currency front, PkR largely remained flat against the greenback throughout the week to close at 278.54 against the US dollar on Friday.
Other key developments during the week included the refining sector gearing up for significant furnace oil exports, a drop in the external debt-to-GDP ratio to a six-year low, potential economic losses of $300 million due to an internet firewall, the lack of Cabinet approval for a urea import proposal, and the selection of five mineral projects for investment.
In terms of sectoral performance, the best-performing sectors were Property, Textile Weaving, Jute, Textile Spinning, and Exchange Traded Funds, which saw weekly gains of 13.1%, 10.4%, 9.2%, 5.9%, and 2.9%, respectively.
Conversely, the Vanaspati & Allied Industries, Automobile Assemblers, Woollen, Leasing Companies, and Refinery sectors were among the worst performers, with weekly declines of 7.1%, 5.9%, 5.6%, 5.2%, and 4.4%, respectively.
On the flow side, major net selling was observed from Companies, with a net sell of $4.37 million, while Individuals were the primary buyers, with a net purchase of $7.18 million.
The top-performing companies during the week were YOUW (up 58.3% WoW), JVDC (up 19.0% WoW), NPL (up 8.0% WoW), GHGL (up 8.0% WoW), and MARI (up 7.7% WoW). On the flip side, the top laggards were KAPCO (down 9.5% WoW), NBP (down 7.6% WoW), PGLC (down 7.1% WoW), NRL (down 6.9% WoW), and THALL (down 6.8% WoW).
AKD Research forecasted that the market is expected to continue positive momentum as global market concerns settle and macroeconomic indicators remain favourable. Additionally, the anticipated IMF Executive Board approval during the month is likely to support the momentum.
According to the brokerage firm, sectors benefiting from monetary easing and structural reforms would remain in the limelight. However, modest economic recovery would keep the upside in check for the cyclicals. Our top picks include OGDC, PPL, MCB, UBL, MEBL, FFC, LUCK, FCCL, and INDU.
