KARACHI: The stock market ended the week positively, with the benchmark KSE 100 index climbing by 756 points, or 0.97%, to close at 78,801.42. This gain came despite ongoing political tensions and a delay in the approval of the $7 billion Extended Fund Facility (EFF) with the International Monetary Fund (IMF), which was initially reached in July.
Market sentiments were initially affected by Pakistan’s exclusion from the IMF Executive Board’s meeting agenda for August 28, raising concerns about the disbursement of the next tranche. However, optimism grew midweek when the finance minister announced progress with the IMF, suggesting that approval might be secured by September.
The positive market trend was further supported by a T-bill auction that saw yields drop by 74-148 basis points across all tenors, indicating expectations of a potential interest rate cut at the upcoming monetary policy meeting on September 12. Additionally, the State Bank of Pakistan’s foreign exchange reserves increased by $19 million to $9.21 billion for the week ending August 16, although the source of this inflow was not disclosed. The rupee remained stable at Rs278.5 to the US dollar.
Sector-wise, contributions to the market’s gains came from commercial banks (369 points), fertiliser (177 points), cement (134 points), leather (79 points), and refinery (47 points). Conversely, sectors such as automobile assembly (40 points), food and personal care products (34 points), technology (20 points), miscellaneous (11 points), and exploration and production (10 points) had a negative impact.
Key stocks driving the gains included Fauji Fertiliser Company (197 points), National Bank of Pakistan (164 points), United Bank Ltd (123 points), Services Industries (79 points), and Oil and Gas Development Company (75 points). On the downside, Mari Petroleum Ltd (108 points), Habib Bank Ltd (65 points), Millat Tractors Ltd (43 points), Systems Ltd (41 points), and Engro Corporation (35 points) were notable decliners.
Foreign selling amounted to $0.62 million, a decrease from the previous week’s net buy of $5.26 million. Major sales were seen in fertiliser and other sectors. In contrast, local buying was led by mutual funds and banks/DFIs, each contributing $3.5 million.
The average trading volume increased by 4.6% to 578 million shares, while the average value traded fell by 25.2% to $56 million week-on-week.
Looking ahead, AHL forecasts that the market will likely maintain its positive momentum, with developments related to the IMF potentially boosting investor confidence. The ongoing earnings season is also expected to attract attention to select stocks, driven by anticipated strong results.
