KARACHI:
Pakistan Stock Exchange (PSX) experienced volatile trading during the outgoing week, with the KSE-100 index displaying mixed trends before closing at 117,807, down 635 points, or 0.5% week-on-week (WoW).
The market started on a negative note due to concerns over increased royalty for cement firms and the International Monetary Fund’s (IMF) stance on proposed tariff cuts. However, sentiment improved following Pakistan’s staff-level agreement with the IMF under the Extended Fund Facility (EFF), which would unlock the second tranche of $1 billion.
Additionally, a new 28-month $1.3 billion arrangement under the Resilience and Sustainability Facility (RSF) further bolstered confidence.
On a day-on-day basis, the PSX took a deep dive on Monday after hitting record highs last week as the KSE-100 index plunged 2,003 points, primarily due to institutional profit-taking.
On Tuesday, the index showed signs of recovery, with investors anticipating the resolution of circular debt crisis in the power sector. The KSE-100 recorded an increase of 196 points.
The following day, the PSX saw a significant upswing, where the index gained 1,139 points, driven by investor optimism following a staff-level agreement with the IMF.
On Thursday, which was the last trading day, the bourse was unable to extend the previous day’s robust rally as it experienced quiet trading with the index closing almost flat. The KSE-100 recorded a thin gain of 34 points and settled at 117,807.
Arif Habib Limited (AHL) wrote in its weekly review that the KSE-100 index displayed mixed trends throughout the week, beginning on a negative note due to the proposed increase in royalty for cement companies and IMF’s concerns over the proposed tariff cuts.
However, the market rebounded later, driven by the staff-level agreement between Pakistan and the IMF for the first EFF review, facilitating the disbursement of the second tranche of $1 billion. In addition, the IMF and Pakistan also signed a new 28-month arrangement under the RSF, amounting to $1.3 billion, it said.
On the economic front, Pakistan’s GDP grew by 1.73% year-on-year in 2QFY25, while GDP growth for 1HFY25 stood at 1.54% compared to 2.33% in 1HFY24. Meanwhile, in T-bill auction, the SBP raised Rs640 billion, slightly below the target of Rs650 billion, AHL said.
Sector-wise, negative contributions to the market came from fertilisers (333 points), technology (280 points), cement (196 points), leather & tanneries (107 points) and textile (54 points). Meanwhile, the sectors that contributed positively were banks (488 points), pharma (76 points), exploration & production (72 points) and tobacco (41 points).
Stock-wise, negative contributors were Fauji Fertiliser Company (239 points), Systems Limited (198 points), Service Industries (107 points), Engro Fertilisers (106 points) and Cherat Cement (106 points).
Scrip-wise, positive contributions came from UBL (462 points), Hubco (169 points), OGDC (115 points), Meezan Bank (112 points) and Pakistan Tobacco (41 points).
Foreigners’ buying continued during the week under review, which came in at $3.92 million compared to net selling of $7.96 million last week. Major buying was witnessed in oil marketing companies ($4.2 million).
Average daily trading volumes reached 317 million shares (up 38% WoW) while average traded value settled at $87 million (up 27%).
Among other major news, Mari Energies began production from Shewa discovery in Waziristan block, 1HFY25 direct tax collection rose 29%, Pakistan Petroleum and OGDC discovered gas in Sindh’s Kirthar block, Punjab CM launched a free tractor scheme and SBP raised Rs981 billion through floating-rate Pakistan Investment Bonds, AHL added.
Topline Securities wrote in its monthly review that the KSE-100 index increased by 4% on a month-on-month basis, which could be attributed to the IMF staff-level agreement, a circular debt resolution plan where news flow indicated significant progress and talk that the government was planning to reduce electricity prices.
#PSX #WoW #volatility
