Pakistan Stock Exchange Benchmark Index Posts 3.55%WoW Increase – OpEd

During the week ended on November 24, 2023 the benchmark index of Pakistan Stock Exchange skyrocketed to touch an all time high of 59,086 points on Friday, reflecting a significant increase of 3.55%WoW. 

Positive developments encircled the current account deficit narrowing to US$74 million in October, a decline of 91%YoY, keeping in line with shortage of dollars in the market needed to open L/Cs.

During 4MFY24, FDI rose by 7% to US$ 525 million which further contributed to the bullish market. Moreover, the IT export remittances for July-October increased by 4.4%YoY to US$893 million and total borrowing fell by US$0.41 million to US$3.85 billion.

International oil prices (Brent Crude) fell significantly to US$78.93/barrel on Wednesday amidst delayed OPEC Plus meeting, but recovered to US$81.42/barrel on Friday.

Market participation witnessed a decline, with an average daily traded volume of 657 million shares, marking 8.9%WoW decrease from the earlier week’s average of 721.3 million shares.

On the currency front, the rupee appreciated by 0.39%WoW against the greenback, closing at PKR285.37/US$ on Friday.

Other notable news for the week included: 1) foreign exchange reserves by Pakistan’s central bank dropped by US$217 million to US$7.2 billion, 2) power generation cost fell by 19% in first four months of the current financial year, 3) Dr. Shamshad Akhtar said Pakistan’s GDP likely to grow by 2% to 2.5% during the ongoing financial year, 4) power ministry recovered PKR55 billion from delinquent consumers, 5) during 4MFY24 developmental projects worth PKR300.9 billion were approved under PSDP and 6) Nepra approved PKR1.52 per unit surcharge on KE consumers. 

Woollen, Leasing Companies, and Glass & Ceramics were amongst the top performers, while Synthetic & Rayon, Tobacco, and Refinery were amongst the laggards.

Major net selling was recorded by Banks with a net sell of US$5.03 million. Individuals absorbed the selling with a net buy of US$3.52 million. 

Top performing scrips included: PGLC, BNWM, GHGL, ABOT, and PSMC, while top laggards were: UNITY, EFUG, CNERGY, PIOC, and OGDC.

Analysts forecast positive outlook of the market owing to favorable economic developments like easing inflation and expected positive economic recovery in the current fiscal year. While the market is flourishing, analysts strongly advise the market participants to avoid potential pitfalls and instead concentrate on companies with robust fundamentals.

Furthermore, considering companies with healthy dividend yields can be a prudent strategy for navigating inflation safely.