Karachi, February 1, 2025 – The Pakistan Stock Exchange (PSX) is anticipated to sustain its positive momentum in the upcoming week, commencing from February 2, 2025. Market analysts at Arif Habib Limited predict that the PSX will continue its upward trajectory, largely influenced by expectations of further reductions in inflation.
Analysts estimate that inflation for January 25 will likely register below 3%, providing a boost to investor sentiment. Furthermore, with numerous financial results set to be announced in the coming week, specific stocks are expected to see heightened activity, contributing to the PSX’s overall performance.
Currently, the KSE-100 index of the PSX is trading at a price-to-earnings ratio (PER) of 6.2x (2025), which is significantly below its 10-year average of 8.0. Additionally, the PSX offers a dividend yield of approximately 8.2%, surpassing its 10-year average of 6.5%.
The PSX experienced a mixed performance this past week. Initially, the market faced downward pressure, with the index dipping to a low of 111,487 points due to factors such as the rollover week, underwhelming corporate earnings, and concerns over a conservative policy rate cut by the State Bank of Pakistan (SBP). However, by the end of the week, the market rebounded, closing at 114,256 points. During the week, the SBP reduced its policy rate by 100 basis points to 12%. Additionally, foreign exchange reserves decreased by USD 76 million week-over-week (WoW), reaching a total of USD 11.4 billion. The Pakistani Rupee saw slight depreciation, closing at 278.97 against the US dollar, down 0.08%.
On a WoW basis, the KSE-100 index closed at 114,256 points, marking a loss of 625 points, or a decline of 0.54%. Sector-wise, negative contributors included Fertilizer (-477 points), Oil Marketing Companies (-208 points), Pharmaceuticals (-85 points), Engineering (-62 points), and Exploration & Production (-60 points). On the other hand, positive contributions came from Commercial Banks (612 points), Cement (82 points), Automobile Assemblers (75 points), Miscellaneous (28 points), and Automobile Parts & Accessories (9 points).
Among individual stocks, the biggest drags on the PSX were FFC (-458 points), OGDC (-124 points), PSO (-110 points), BAFL (-89 points), and HUBC (-70 points). Meanwhile, the top gainers included UBL (339 points), BAHL (248 points), LUCK (204 points), NBP (125 points), and SYS (70 points).
Foreign investors recorded net selling of USD 4.1 million over four days, compared to a net buy of USD 5.6 million in the previous week. The major sector seeing foreign selling was FMCG (USD 3.9 million), followed by Fertilizer (USD 0.7 million). On the domestic front, buying activity was led by Companies (USD 6.2 million) and Individual investors (USD 4.2 million). The average daily trading volume settled at 498 million shares, reflecting a decline of 28.8% WoW, while the average value traded stood at USD 98.5 million, down 20.6% WoW.
As the PSX moves into the new week, market watchers will closely monitor corporate earnings, inflation trends, and foreign investment flows to gauge the market’s direction. Investors remain optimistic that the PSX will build on its positive momentum, provided economic indicators remain favorable.