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Express Tribune
28-05-2025
- Business
- Express Tribune
PSX inches up as investors stay cautious
Listen to article The Pakistan Stock Exchange (PSX) closed modestly higher on Tuesday, posting a gain of 112 points, as the KSE-100 index oscillated in a narrow band throughout the day. Investors were wary ahead of the budget presentation, although cement stocks rose, driven by hopes for announcement of a real estate package in the federal budget. Analysts noted that there was some mid-session pressure due to investor concerns over the lack of agreement with the International Monetary Fund (IMF) on budgetary targets and subsidies. K-Electric was the volume leader for the second consecutive day, with 267 million shares changing hands, following approval of its multi-year distribution tariff for the period FY24 to FY30. Ahsan Mehanti of Arif Habib Corp commented that stocks staged a recovery amid speculation in the pre-budget session. Hopes for a real estate package in the federal budget sparked a rally in cement stocks. Investor concerns over the IMF's disagreement regarding key budgetary targets and subsidies and rupee fluctuation caused mid-session pressure. Moreover, the government's measures for increasing tax collection to slash the fiscal deficit aided the positive close, he said. At the end of trading, the benchmark KSE-100 index recorded an increase of 111.79 points, or 0.09%, and settled at 118,332.91. According to Topline Securities, the market saw a range-bound session, with the index moving within a confined band due to the rollover pressure and uncertainty surrounding the upcoming budget. It touched the intra-day high of 587 points and low of 77 points before settling at 118,333, up 112 points. The positive momentum was mainly driven by Meezan Bank, Systems Limited, Pakgen Power, Pakistan Petroleum and DG Khan Cement, which added 223 points to the index, Topline said. In its commentary, Arif Habib Limited (AHL) remarked that Tuesday's session was largely flat ahead of the May 28 holiday. Some 48 shares rose while 50 fell. Meezan Bank (+1.61%), Systems Limited (+1.22%) and Pakgen Power (+6.77%) contributed the most to index gains while UBL (-1.78%), Hub Power (-0.82%) and Pakistan Services (-3.5%) were the biggest drags, it said. AHL added that headline inflation for May 2025 was projected to rise to 3.04% year-on-year, an uptick from 0.3% in April, but still significantly lower than the 11.8% reading in May 2024. The sharp moderation reflects a strong base effect and easing inflationary pressures across key categories such as food and transportation. Moreover, cement was the standout sector where Flying Cement (+10%) Dewan Cement (+8.29%) and DG Khan Cement (+3.23%) were the major gainers. "The market appears to be biding time for a positive catalyst to breach 120,000 on a sustained basis," AHL said. Analyst Ali Najib commented that "consolidation continues ahead of the budget," adding that the PSX had a stable day as the KSE-100 index floated in a narrow range and ended the day on a flat note at 118,333, reflecting a gain of 112 points. He noted that investors were likely to exercise caution in the coming sessions amid the ongoing macroeconomic uncertainty. Overall trading volumes increased to 690.4 million shares compared with Monday's tally of 635.5 million. The value of shares traded during the day was Rs23.8 billion. Shares of 459 companies were traded. Of these, 211 stocks closed higher, 210 fell and 38 remained unchanged. K-Electric was the volume leader with trading in 267.6 million shares, gaining Rs0.17 to close at Rs5.89. It was followed by WorldCall Telecom with 31.6 million shares, gaining Rs0.03 to close at Rs1.30 and PTCL with 20 million shares, gaining Rs0.21 to close at Rs24.28. During the day, foreign investors sold shares worth Rs876.7 million, the National Clearing Company reported.
Express Tribune
21-05-2025
- Business
- Express Tribune
PSX dips amid pre-budget, tax worries
Shares of 340 companies were traded. At the end of the day, 93 stocks closed higher, 233 declined and 14 remained unchanged. PHOTO: FILE Listen to article The Pakistan Stock Exchange (PSX) closed bearish on Tuesday as investors remained cautious owing to pre-budget uncertainty. Market participants were vigilant, anticipating parliamentary approval of IMF-driven tax reforms, including the phasing out of industrial incentives and the implementation of new tax levies on the agricultural sector. The benchmark KSE-100 index swung between the intra-day high of 211 points and the intra-day low of 1,163 points, before closing at 118,971, a decline of 719 points, or 0.60%. Market participation remained modest, with trading volume standing at 438 million and traded value shrinking to Rs21 billion. According to Ahsan Mehanti of Arif Habib Corp, stocks closed lower amid pre-budget uncertainty and concerns over parliamentary approval of IMF-driven tax measures in the FY26 federal budget, including the phasing out of industrial incentives and implementation of tax reforms for the agricultural sector. He added that the International Monetary Fund's (IMF) warning over external risks from the US tariff policies and escalating tensions with India impacted sentiment. Moreover, falling global crude oil prices and rupee fluctuation also played a role in bearish close at the PSX. At the end of trading, the benchmark KSE-100 index recorded a decrease of 718.51 points, or 0.60%, and settled at 118,971.13. In its review, Topline Securities commented that the stock market remained volatile, reflecting a day of consolidation. The benchmark index recorded the intra-day high of 211 points and low of 1,163 points, eventually closing at 118,971, down 719 points. The decline was attributed to persistent profit-taking, compounded by the absence of any positive triggers, it said. Key heavyweights including Fauji Fertiliser Company (FFC), UBL, HBL, Pakistan Petroleum and Engro Holdings collectively contributed to a decline of 386 points in the index, Topline added. Arif Habib Limited (AHL), in its report, said that the KSE-100 index failed to test 120k and gave up 0.6% day-on-day to close below 119k. Some 41 shares rose while 55 fell with Habib Metropolitan Bank (+2.88%), DG Khan Cement (+2.12%) and Meezan Bank (+0.51%) contributing the most to index gains. On the flip side, FFC (-1.02%), UBL (-1.17%) and HBL (-2.33%) were the biggest drags. AHL pointed out that the government had lowered its economic growth projection due to global trade disruptions and tighter spending conditions of the IMF. The GDP is estimated to expand 2.68% compared with earlier projection of 3.6% for the current year. Insight Securities' Head of Sales Ali Najib noted that the PSX witnessed some selling as investors took a cautious stance ahead of the budget. The upcoming budget and the potential introduction of new policies or tax measures were being closely watched by the market. Consequently, a wait-and-watch approach was being adopted by investors as they sought greater clarity before any significant investment decisions, he said. JS Global analyst Muhammad Hasan Ather commented that bears dominated the PSX where investors adopted a cautious stance, preferring to book profits ahead of the federal budget for FY26. During the session, the index touched the intra-day high of 119,900 and low of 118,527. Some buying interest emerged in cement stocks towards the end of the day, driven by hopes of budgetary incentives for the construction sector, Ather mentioned. "Going forward, we advise investors to consider any dips as buying opportunities, particularly in oil & gas, technology, textile and steel stocks," he added. Overall trading volumes increased to 437.9 million shares compared with Monday's tally of 425.4 million. The value of shares traded during the day was Rs20.8 billion. Shares of 473 companies were traded. Of these, 177 stocks closed higher, 232 fell and 64 remained unchanged. At-Tahur Limited was the volume leader with trading in 39.6 million shares, gaining Rs3.56 to close at Rs49.69. It was followed by Fauji Foods with 30.3 million shares, falling Rs0.47 to close at Rs15.81 and Gul Ahmed with 29.1 million shares, gaining Rs1.26 to close at Rs23.97. During the day, foreign investors bought shares worth Rs176.3 million, the National Clearing Company reported.
Express Tribune
19-05-2025
- Business
- Express Tribune
PSX edges up as budget uncertainty prevails
The Pakistan Stock Exchange (PSX) on Monday began the week with mixed sentiment as investors traded cautiously over pre-budget uncertainty, a widening trade deficit and concerns over the proposed tax measures amounting to Rs700 billion. Despite investor caution over the International Monetary Fund's (IMF) lower growth forecast for FY25, the market showed resilience, with the KSE-100 index posting a slight gain of 40 points at close. Optimism surrounding the monetary easing and circular debt resolution helped maintain some bullish momentum. Ahsan Mehanti of Arif Habib Corp remarked that stocks closed flat amid uncertainty in the pre-budget session, a $3.4 billion trade deficit for April 2025 and geopolitical tensions. Investor concerns over the proposed new tax measures amounting to Rs700 billion alongside the IMF's forecast for a lower 2.6% growth in FY25 impacted market sentiment. However, projections for higher tax collection at 12.6% of GDP, or Rs14.4 trillion, and monetary policy easing played the role of catalysts in positive close at the PSX, he added. At the end of trading, the benchmark KSE-100 index recorded an increase of 40.49 points, or 0.03%, and settled at 119,689.63. In its review, Topline Securities noted that the local bourse was in a consolidation phase as it hovered close to the all-time high. The index moved within a wide range, recording the intra-day high of 636 points and intra-day low of 398 points, before closing up 40.49 points. It said the steady upward bias was supported by investor optimism following the release of a detailed IMF report, which offered a clearer picture of Pakistan's macroeconomic trajectory and policy direction. Adding to the positive sentiment, fresh developments on resolving the circular debt issue once again made headlines, drawing investor interest to key energy and gas sector players including Pakistan Petroleum, Oil and Gas Development Company, Pakistan State Oil, Sui Northern Gas Pipelines and Sui Southern Gas Company. On the upside, Topline added, heavyweights such as Engro Holdings, Pakistan Petroleum and Pakistan State Oil led the charge, collectively contributing 246 points to the index. However, Mari Petroleum, UBL and Lucky Cement erased 224 points. Insight Securities Head of Sales Ali Najib commented that the PSX commenced the week with a range-bound activity as the KSE-100 index floated in a band of 1,035 points. Pakistan's strong external position, current account surplus and lower inflation may spur economic activity and monetary easing, which would boost equities, he said. Overall trading volumes decreased to 425.4 million shares compared with Friday's tally of 572.3 million. The value of shares traded during the day was Rs22.3 billion. Shares of 465 companies were traded. Of these, 222 stocks closed higher, 199 fell and 44 remained unchanged. Fauji Foods was the volume leader with trading in 60.6 million shares, gaining Rs1.11 to close at Rs16.28. It was followed by Crescent Star Insurance with 20.1 million shares, gaining Rs0.13 to close at Rs3.15 and At-Tahur Limited with 18.3 million shares, falling Rs3.70 to close at Rs46.13. During the day, foreign investors sold shares worth Rs24.8 million, the National Clearing Company reported.
Express Tribune
15-05-2025
- Business
- Express Tribune
SBP receives $1.1b second IMF tranche
Listen to article The State Bank of Pakistan (SBP) has received the second tranche of funding under the International Monetary Fund's (IMF) Extended Fund Facility (EFF), amounting to SDR760 million - approximately $1.023 billion following the successful completion of the program's first review by the IMF Executive Board on May 9, 2025. The inflow was credited on May 13 and will be reflected in Pakistan's foreign exchange reserves for the week ending May 16, according to SBP. The disbursement is part of a broader support package aimed at bolstering Pakistan's economic recovery and macroeconomic stability. The IMF board recently also approved a new Resilience and Sustainability Facility (RSF) for Pakistan worth $1.4 billion, with initial disbursements expected after its first review later this year. "The IMF's second tranche of $1.023 billion will strengthen Pakistan's foreign exchange reserves, support currency stability, and boost investors' confidence," said the Head of Sales at Insight Securities, Ali Najib. It improves the balance of payments and signals the IMF's trust in ongoing economic reforms, potentially attracting further external support by opening other bilateral and multilateral lenders' doors. The inflow eases pressure on the rupee and reduces default risk, enhancing macroeconomic stability. However, sustained benefits require continued structural reforms and fiscal discipline to ensure long-term economic resilience and reduce dependence on external financing. To recall, Pakistan authorities reached Staff Level Agreement (SLA) with International Monetary Fund (IMF) on first review of Extended Fund Facility (EFF) on Mar 25, 2025. Today, in its board meeting, the IMF board has approved the first review and a new facility under the Resilience and Sustainability Facility (RSF) of US$1.4 billion, said Director Research of Topline Securities, Shankar Talreja. This will unlock inflows of $1 billion after this approval under the EFF facility, bringing total inflows under EFF to $2.1 billion, he said. While inflows from RSF facility will be released after its first review, likely in September 2025, in our view. It is important to note that Bangladesh received the RSF installment during the first review of its program, not at the time of approval. Approval of first review of EFF was in line with our expectations considering the fact that Pakistan achieved the required quantitative indicative criteria of the program, he said. However, there were some fears, India may create some blockages in approval of this program due to ongoing border tensions. "We view this as a positive development as this signals Pakistan's reform agenda is in progress and afloat," Talreja said. In our annual strategy released in Nov 2024, we mentioned, approval of first review of IMF in Mar 2025 would be a key trigger in re-rating of market multiple to historic average. Currently, the PSX is trading at an estimated 2026 price-to-earnings (P/E) ratio of 4.7 times, which is 32% lower than the historical forward price-to-earnings ratio of 7 times. Furthermore, recent tension between India and Pakistan wiped out 13% from the market in last 11 sessions between Apr 22 to May 08, 2025 before recovering 3.5% on May 09. We consider this as an opportunity for value investors to ride on Pakistan's improving macro indicators, he said. For the first time in almost last 2 decades, Pakistan is set to post current account and primary account surplus, Talreja added. Furthermore, interest rates are down 1100bps from peak of 22% to 11% in last 1 year, this will further augment the market rally through induction of more funds in equities from fixed income. Talreja said they maintain their PSX's base case index target of 127,000 for December 2025. However, with higher liquidity, index can cross 150,000 mark assuming successful IMF reviews and political and geo-political stability. In its latest projections, the IMF now expects Pakistan's real GDP growth to reach 2.6% in FY25, down from the earlier forecast of 3.2% published in October 2024. Inflation is projected to average 5.1%, a significant downward revision from the previous estimate of 9.5%. The primary balance is expected to post a surplus of 2.1% of GDP, slightly up from the earlier estimate of 2%, while the current account deficit is now seen at just 0.1% of GDP, compared to the previously projected 0.9%. Additionally, foreign exchange reserves are forecast to reach $13.9 billion by June 2025, higher than the earlier estimate of $12.75 billion. In comparison, our own projections anticipate real GDP growth in the range of 2.5% to 3.0% during FY25, with average inflation between 4.5% and 5.5%, said Talreja. We expect a primary surplus of 2% of GDP, a current account surplus in the range of 0.3% to 0.7%, and foreign exchange reserves to rise to approximately $14.3 billion by the end of June 2025.
Express Tribune
08-05-2025
- Business
- Express Tribune
Global bonds rally despite Indo-Pak escalation
Listen to article Despite escalating Indo-Pak tensions following airstrikes, Pakistan's Euro and Sukuk bonds have posted notable gains in global markets, highlighting investor confidence in the country's macroeconomic management and IMF-backed reform agenda. Yields on Pakistan's international bonds have declined by 18-61 basis points across various tenors over the last 8-9 days, reflecting a corresponding rise in bond prices. "Surprisingly, yields on Pakistan Euro/Sukuk bonds in the international market have improved (prices increased) by 18-61 basis points after falling on average 160 basis points across various tenors in the last 8-9 days," wrote Topline Securities in a research report. Pakistan International Bond (Eurobond) and Sukuk bond prices are improving due to growing investor confidence in the country's economic outlook, said Ali Najib, Head of Sales at Insight Securities. Positive factors include IMF support, improved foreign reserves, controlled inflation, and better fiscal discipline. These developments reduce default risk, attracting global investors and raising demand for the bonds. As demand rises, bond prices increase and yields fall, reflecting stronger creditworthiness and stability. Ali Najib said Pakistan's Eurobond and Sukuk are traded actively in international markets, and recent developments have significantly boosted investor confidence. The successful progress on the International Monetary Fund (IMF) programme, which is effectively on track, along with improved macroeconomic indicators, is playing a major role. Moody's had previously revised Pakistan's outlook upward, and more recently, Fitch also upgraded its rating. The Finance Minister has been engaging regularly with global rating agencies, which increases the likelihood of further positive revisions from Moody's and S&P going forward. Najib highlighted that inflation is at historic lows, a key indicator of macroeconomic stability. He added, "Last year, in June 2023, Pakistan was on the brink of default with SBP reserves down to just $3.5 billion — barely enough to cover one month of imports. Today, reserves have recovered to $11 billion with the central bank and an additional $4 billion with commercial banks. The State Bank of Pakistan aims to push this to $14 billion by June, supported by inflows including a $1.5 billion IMF tranche and a $1.5 billion rollover from ICBC, China." Commenting on the Indo-Pak escalation, Najib noted that the military developments occurred around midnight, which means international markets were likely closed by then. The full market reaction may be reflected more clearly in the next trading session. The State Bank of Pakistan (SBP) raised a total realised amount of Rs844 billion through the auction of Pakistan Investment Bonds (PIBs) held on Wednesday. This came a day after the central bank's monetary policy announcement, which triggered a broad-based decline in yields across the secondary market. Short-term yields saw significant declines, with the 3-month, 6-month, and 12-month Pakistan Revaluation Rates (PKRV) falling by 55 basis points, 51 basis points, and 48 basis points to settle at 11.28%, 11.30%, and 11.28%, respectively. Similarly, yields on longer-tenor bonds also eased, with the 3-year, 5-year, and 10-year instruments declining by 25 basis points, 21 basis points, and 20 basis points to reach 11.48%, 12.00%, and 12.23%, respectively. The decline in yields reflects improved investor sentiment and expectations of a lower interest rate environment going forward.
