KARACHI: Pakistan Stock Exchange witnessed bullish trend during the outgoing week ended on August 23, 2024 on the back of aggressive buying mainly by local investors coupled with institutional support.
The benchmark KSE-100 index surged by 756.12 points on week-on-week basis and closed at 78,801.43 points.
Trading activities also slightly improved as average daily volumes on ready counter increased by 4.6 percent to 578.34 million shares during this week as compared to previous week’s average of 552.77 million shares however average daily traded value on the ready counter declined by 25.3 percent to Rs 15.58 billion during this week against previous week’s Rs 20.85 billion.
BRIndex100 added 173.89 points during this week to close at 8,360.45 points with average daily turnover of 484.282 million shares.
BRIndex30 increased by 660.30 points on week-on-week basis to close at 26,291.90 points with average daily trading volumes of 294.843 million shares.
The foreign investors however remained net sellers of shares worth $616,845 during this week. Total market capitalization increased by Rs 114 billion during this week to Rs 10.512 trillion.
An analyst at AKD Securities said the market maintained a largely positive momentum throughout the week, driven primarily by declining T-bill yields and favourable corporate results. In Wednesday’s T-bill auction, cut-off yields witnessed a significant decline, dropping by 74-148bps, which brought the 3-month yield down to 17.49 percent, indicating market expectations of a rate cut exceeding 100bps in the upcoming MPC meeting on 12th September 2024.
Consequently, these expectations of rate cut led to the rerating of high dividend-yielding stocks, notably FFC and UBL, which contributed 236/189points, respectively, to the weekly index gains. Additionally, NBP stood third in terms of index points contribution, driven by expectations of lower-than-expected provisioning related to pension case in its upcoming financial results. Similarly, pharmaceutical sector also performed well, buoyed by better-than-anticipated financial results from companies within the sector, supported by the deregulation of non-essential drugs.
Sector-wise, Woollen, Jute, and Leather & Tanneries were amongst the top performers, up 11.8 percent/11.2 percent/11.1 percent, respectively. On the other hand, tobacco, automobile assembler, and textile weaving were amongst the worst performers with a decline of 2.9 percent/2.1 percent/1.6 percent.
Flow wise, major net selling was recorded by Insurance Companies with a net sell of $6.3million. On the other hand, mutual funds, banks and companies absorbed most of the selling with a net buy of $3.5 million, $3.5 million and $3.3million, respectively.
Company-wise, top performers during the week were NBP (up 19.2 percent), PGLC (up 17.1 percent), SRVI (up 14.3 percent), HINOON (up 12.6 percent) and BNWM (up 11.8 percent), while top laggards were YOUW (down 14.3 percent), CEPB (down 14.0 percent), SML (down 8.9 percent), ISL (down 8.6 percent), KTML (down 6.3 percent).
An analyst at JS Global Capital said that the KSE-100 index displayed positive momentum this week, driven by gains in the last three sessions, resulting in a WoW increase of 0.9 percent, closing at 78,801 levels.
As per PBS data, Large Scale Manufacturing (LSM) Sector showed a YoY growth of 0.92 percent during FY24. According to the latest data, Pakistan’s current account balance recorded a deficit of $162million in July 2024, a significant 78 percent YoY decline owing to a high base. Current account also contracted by 48 percent MoM, largely due to a softening primary income deficit and lower trade balance, which hit a 22-month low. With the current account in deficit and reduced support from a lower financial account surplus, Balance of Payment returned to a deficit, totalling $152 million.
In the T-Bills auction held during the week, significant declines were observed in cut-off yields across tenors, with reductions ranging from 74bps - 148bps. This was viewed positively by market participants.
On the IMF front, Finance Minister Muhammad Aurangzeb shared the government’s optimism about securing approval for the new $7.0 billion loan program in September, noting that discussions with the Fund are progressing well. This optimism also contributed to the bullish momentum at the PSX.
Copyright Business Recorder, 2024
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