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A broker is seen busy in trading at the Pakistan Stock Exchange in Karachi on Wednesday, January 1, 2025. — PPI
#Stocks #recover #strong #valuations
KARACHI: Pakistan stocks closed slightly lower during the outgoing week. However, the market is expected to recover next week amid strong valuations. Investors will closely monitor the Monetary Policy Committee (MPC) meeting on Monday.
“Market participants are expected to closely monitor the MPC meeting on January 27, 2025, which will mark the first MPC meeting of the calendar year,” said brokerage Arif Habib Ltd. policy rate, bringing it down to 12 percent, a level last seen in March 2022. Additionally, many financial consequences are expected. announced in the coming week, which could lead to activity in certain stocks.
The market opened on a positive note amid expectations of further rate cuts at the upcoming MPC meeting. However, short profit taking during the week reversed the momentum.
The KSE-100 index closed 392 points (down 0.34 percent) week-on-week at 114,880 points. Average trading volume was 698 million shares (up 25.1% week-on-week), while average trade value was $123.9 million (up 7.0% week-on-week).
Foreign purchases were recorded at $5.6 million compared to net sales of $9.7 million last week. The cement sector saw major buying ($3.9 million), followed by exploration and production (E&P) companies ($1.7 million). On the domestic front, sales were reported by banks ($14.1 million) and non-banking financial companies (NBFCs) ($0.1 million).
By sector, negative contributions came from oil and gas exploration companies (1,225 points), power (194 points), oil and gas marketing companies (114 points), automobile assemblers (81 points) and engineering (33 points). come on In terms of scrip, the top negative contributors were MARI (-788 points), OGDC (-198 points), PPL (-198 points), HUBC (-151 points) and UBL (-123 points).
On the positive side, the fertilizer sector contributed 638 points, cement 165 points, pharmaceuticals 74 points, technology 54 points and chemicals 43 points. Major positive contributors were FFC (582 points), FCCL (146 points), MEBL (112 points), SYS (76 points) and MCB (46 points).
Topline Securities analyst Nabeel Haroon attributed the market’s negative close to non-tax filers restricting investment in the stock market and heavy selling in the banking sector during the week.
JS Research analyst Vida Zaman said the KSE-100 index experienced mixed trends during the week. A net inflow of foreign direct investment (FDI) for December 2024 was recorded at $170 million, representing a year-on-year decline of 33 percent. However, it improved by 20% year-on-year during the first half of FY25.
During the week, the finance minister announced that Pakistan plans to launch $200 million to $250 million worth of panda bonds by the end of the current fiscal year.
In other economic news, the International Monetary Fund (IMF) revised Pakistan’s GDP growth forecast for FY25 to 3.0 percent from 3.2 percent. Textile exports were recorded at $9.1 billion, up 9.7 percent year-on-year.
Pakistan has also finalized terms for a $1 billion loan from two Middle Eastern banks, which will further support the country’s external financing needs.
In the recent T-bill auction, the government raised Rs 326 billion against a target of Rs 350 billion, with yields falling by between 20-41bps across tenors, further strengthening the case for a rate cut.
The IMF has proposed aligning gas tariffs for captive power plants (CPPs) with regasified liquefied natural gas (RLNG) prices, effective from February 2024. To repay the loan.
During the week, oil prices saw a weekly decline of 3.0 percent, amid concerns over US President Trump’s plans to increase domestic oil production.
