KARACHI: Stocks are expected to keep rising in the coming week, driven by optimism about a successful IMF program and several positive economic signs, dealers said.
“We expect the upward trend to continue next week,” said brokerage Arif Habib Ltd. “The new IMF program is likely to boost market confidence.”
Investors will be watching the Federal Budget 2024-25 and investments from the UAE and Saudi Arabia, which are expected to further boost the market.
The market ended the week at a record high of 75,983 points, supported by positive IMF talks. Additionally, the UAE’s commitment to invest $10 billion in Pakistan helped lift the market.
The KSE-100 index gained 641 points, or 0.85%, closing at 75,983 points. Average trading volume increased by 0.7% to 558 million shares, and the average value traded was $64.8 million.
This week saw foreign selling of $12.08 million, compared to a net buy of $14.94 million last week. Major selling occurred in debt ($16.55 million) and technology ($0.63 million). Locally, banks and DFIs bought $10.44 million, followed by insurance companies with $5.31 million.
Positive contributions came from power generation and distribution (174 points), technology and communication (139 points), leather and tanneries (52 points), commercial banks (39 points), and investment banks (17 points). Leading stocks included MEBL (172 points), SYS (141 points), PKGP (98 points), KEL (59 points), and SRVI (52 points).
On the downside, fertilizers (185 points) and cement (161 points) contributed negatively. Key stocks dragging the index down were MCB (145 points), ENGRO (114 points), DAWH (107 points), POL (53 points), and THALL (52 points).
Analyst Muhammad Waqas Ghani at JS Research noted the market’s positive response to the Prime Minister’s meeting with UAE President Mohamed bin Zayed in Abu Dhabi, where the UAE committed to a $10 billion investment. Budget and IMF-related news continued to emerge throughout the week.
Pakistan’s upcoming Federal Budget for FY25, scheduled for June 7, 2024, could mark the country’s largest IMF program ever.
Nabeel Haroon, an analyst at Topline Securities, said the KSE 100 Index consolidated during the week, with positivity on the last trading day following a positive IMF statement about progress towards a staff-level agreement.
Another key development was Pakistan’s agreement with Saudi Arabia on the Reko Diq project, with Pakistan set to sell its 15% shares in the project to Saudi investors.
Economically, Pakistan received $171 million in Roshan Digital Accounts (RDA) in April 2024. The government also raised Rs96.88 billion through the PIB auction, with yields on three-year bonds reduced by 1 basis point to 16.64%, five-year PIBs by 3 basis points to 15.45%, and 10-year bonds by 5 basis points to 14.29%. The Pakistani Rupee depreciated slightly by Rs0.10 or 0.035% week-on-week, settling at 278.3 against the US dollar.
