Pakistani Market Surges 7% in 1Q2024

New IMF Program, Inflation & Budget Key Triggers for Next Quarter

Staff Report

Pakistani Market benchmark KSE-100 index rose 7% quarter-on-quarter (QoQ) in rupee terms and 9% QoQ in USD terms in 1Q2024.

This marks the fourth consecutive quarter of positive closing, with the market gaining 58% over the last four quarters.

The successful implementation of Pakistan’s second and final staff-level agreement under the Stand-By Agreement (SBA) with the IMF, smooth transition of power to the new government, a stable currency, and a 45% growth in earnings reported by KSE 100 companies in 2023 all contributed to boosting sentiments in the outgoing quarter.

According to Bloomberg data, Pakistan did not rank amongst the top or worst performers during this period. Kenya, Kazakhstan, and Argentina emerged as top performers, while Egypt, Lebanon, and Nigeria were among the underperformers.Pakistan Assures IMF To Increase Revenue Base

In 1Q2024, the average traded volumes in the Cash and Ready market surged by 131% year-on-year (YoY) but declined by 40% QoQ to 400 million shares per day. Similarly, the average traded value soared by 122% YoY but dropped by 25% QoQ to Rs14.5 billion per day during 1Q2024.

In the Futures market, the average volumes increased by 113% YoY but decreased by 14% QoQ to 157 million shares per day. The average traded value of the same increased by 89% YoY but declined by 10% QoQ to Rs6.4 billion per day.

Foreign interest in Pakistani equities was evident, with Foreign Corporate buyers participating in the market during 1Q2024, resulting in a net buying of US$7.5 million.

On the local front, Insurance Companies were major buyers, with net purchases totaling US$58 million.

However, local Companies and Banks were significant sellers, with net sales of US$19.8 million and US$18.4 million, respectively, in 1Q2024.

Key stocks of the KSE-100 index that outperformed the market in 1Q2024 included Pakistan Telecommunication Company (PTC) up 49%, Engro Fertilizers (EFERT) up 38%, and Meezan Bank (MEBL) up 37%.

Similarly, key sectors that outperformed the market during the quarter included Transport, Automobile Parts, and Fertilizer,” Topline said in a report.