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PSX weekly review: KSE-100 index posts highest weekly gain in two years

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  • Benchmark KSE-100 index surges 4.9% during the week.
  • Gains come on the back of clarity on the political front.
  • A weekly rally of a similar extent was last witnessed in April 2020.

KARACHI: The outgoing week proved to be an outstanding one for the stock market as it recorded phenomenal gains on the back of clarity on the political front.

The KSE-100 index surged 4.9%, marking the highest week-on-week increase in two years, to settle at 46,601 points. A weekly rally of a similar extent was last witnessed in April 2020.

In the outgoing week, the market roared back after political clarity emerged. Following Prime Minister Shehbaz Sharif’s oath-taking ceremony, the new coalition government began work to tackle the economy.

Moreover, the rupee recovered against the dollar at a rapid pace, marking a 3.6% appreciation. Additionally, the country received record-high remittances this month clocking in at $28.3 billion, showing a 28% increase month-on-month, on account of Ramadan and Eid.

Other major developments during the week were: SBP’s reserves slip below $11 billion, banks approved Rs180 billion in housing loans, Pakistan Telecommunication Authority (PTA) renewed mobile operator licence for $486 million, cars’ sales surged 53.78% in nine months, Rs1 billion Islamic finance facility for renewable energy power plants, weekly inflation witnessed the biggest rise since November.

Meanwhile, foreign buying was witnessed this week, clocking in at $1.29 million against a net sell of $3.78 million recorded last week. Buying was witnessed in technology ($2.21 million), and fertiliser ($1.16 million).

On the domestic front, major selling was reported by a mutual fund ($9.89 million), followed by insurance companies ($7.76 million).

During the week under review, average volumes clocked in at 477 million shares (up by 213% week-on-week), while average value trade settled at $66.3 million (up by 135.6% week-on-week).

Major gainers and losers of the week

Sector-wise positive contributions came from commercial banks (+395 points), fertiliser (+292 points), technology and communication (+268 points), cement (+241 points), and refinery (+129 points). On the flip side, negative contributions came from real estate investment trust (-2.19 points), and vanaspati and allied industries (-1.55 points).

Scrip-wise major gainers were Engro Corporation (+152 points), TRG Pakistan (+136 points), Meezan Bank (+122 points), HBL (+85 points) and Systems Limited (+80 points). Meanwhile, major losers were Colgate-Palmolive (-14 points), Faysal Bank (-10.88 points), Fatima Fertilisers (-4.74 points), Allied Bank (-3.18 points), and Dolmen City REIT (-2.19 points).

Outlook for next week

A report from AHL predicted: “We expect the market to remain positive in the upcoming week. With the commencement of the result season and clarity on the political front, certain sectors and scrips are expected to stay under the limelight.”

“Furthermore, we are expecting the rollover of Chinese loans worth $2.3 billion and IMF negotiations, will help bolster our foreign exchange reserves.,” it said, adding that any dip in oil prices should also have a positive impact on the equity bourse.

“The KSE-100 is currently trading at a PER of 5.0x (2022) compared to the Asia-Pacific regional average of 11.5x while offering a dividend yield of 8.3% versus 2.6% offered by the region,” the brokerage house stated.

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Tourism boom: During Eidul Azha, more than 400,000 people travel to KP

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Over 400,000 people travelled to several beautiful locations in Khyber Pakhtunkhwa between June 17 and June 19, celebrating the recently ended Eidul Azha festivities.

With over 174,000 visitors in one day, Naran Kaghan emerged as the most popular location. Visitors looking for a getaway from the city are still drawn to Naran Kaghan’s calm scenery and charming valleys.

A total of 162,000 visitors to Galiyat took in the city’s rich history at its cultural institutions and historical landmarks. In addition, more than 46,000 people visited Malam Jabba in Swat, and 23,000 people visited Upper Dir to take in its stunning surroundings.

Khyber Pakhtunkhwa is becoming a popular domestic vacation destination due to its unique combination of natural beauty, cultural legacy, and adventure options, as seen by the rise in visitor numbers.

Businesses and local government agencies have been collaborating to make sure tourists have an unforgettable time while appropriately handling the inflow.

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Pakistan currently has $14.41 billion in foreign exchange reserves.

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In a statement, the central bank stated that as of June 14, 2024, Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at $9.135 billion, following the increase.

The announcement also stated, “SBP reserves increased by US$ 31 million to US$ 9,134.7 million during the week ended on June 14, 2024.”

The State Bank of Pakistan (SBP) stated that the nation had $14.415 billion in total liquid foreign reserves. Commercial banks own $5.28 billion of the total in net foreign reserves.

It was announced earlier on June 13 that Pakistan’s foreign exchange reserves reached US$14.38 billion, up US$168 million in the first week of June.

Pakistan’s reserves held by commercial banks rose by US$174 million to $5.28 billion for the week that ended on June 7, according to a statement released by the central bank.

The SBP now has US$9.10 billion in reserves, down US$6.2 million from before. The central bank did not provide an explanation for why its reserves fell.

“SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on July 7, 2024,” the SBP said in a statement.

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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