The KSE-100 index of the Pakistan Stock Exchange (PSX) is expected to maintain its upward momentum in 2025, driven by low single-digit interest rates.
According to AKD Securities, the index is expected to register a strong return of 55.5% next year, supported by strong profitability in the fertilizer sector, improving sustainable return on equity (ROE) in banking, and strengthening cash flows in exploration and production. E&P companies and oil marketing companies (OMCs) all benefit from lower fixed income yields.
The market saw volatility throughout the week, driven by end-of-year portfolio adjustments and realignments. However, upward momentum prevailed, leading the Kuwait Stock Exchange 100 Index to achieve weekly gains of 1,838 points, closing at 111,351 points, which reflects an increase of 1.68% on an annual basis.
The most prominent sectors that contributed to this rise were commercial banks, which contributed 780 points, followed by oil and gas marketing companies, with 336 points, and investment banks and securities companies, which added 313 points.
Moreover, Treasury bill yields at the recent auction remained largely flat, at 12% for three-month and six-month bills. On the macroeconomic front, the current account recorded a surplus of US$729 million, bringing the FY5FY25 balance to a surplus of US$944 million. SBP’s foreign exchange reserves declined by US$228 million year-on-year, ending the week at US$11.9 billion as of December 20, 2024. Average daily trading volume remained low, down 31.0% year-on-year, recording 796 million shares, Compared to 1.2 billion shares traded. The previous week.
The Pakistani Rupee remained stable against the US Dollar throughout the week, closing at PKR 278.47/USD. Key developments during the week included a 14% year-on-year increase in exports to the European Union during the first five months of fiscal year 2025, reaching $4.8 billion. In addition, the Senate committee supported legislation to close bank accounts of non-depositors with balances exceeding PKR 1 million, while the Federal Board of Revenue announced a crackdown on tax evaders.
The government reiterated its goal of achieving a tax-to-GDP ratio of 13.5% within three years, and Pakistan International Airlines revealed plans to buy eight new aircraft next year.
This week’s sectoral performance highlighted notable gains in jute companies, leasing and real estate companies, oil and gas marketing companies and glass and ceramics, with jute leading the rise with an increase of 34.8%. Conversely, the ETFs, Textile Spinning and Allied Industries, Transportation, and Wool sectors saw declines, with ETFs down 12.2%.
Regarding market flows, significant net selling from other organizations was observed, recording an outflow of $9.3 million. However, individuals absorbed much of this selling pressure with a net inflow of $15.0 million.
Among the companies, the best performers were PGLC, which rose 46.5% during the week, followed by TRG, DAWH, JVDC, and FCEPL, with gains of 32.3%, 13.2%, 13.2%, and 11.5%, respectively. . On the other hand, PKGP, CHCC, ATRL, BNWM, and SCBPL were the most lagging, with PKGP recording a weekly decline of 9.5%.
Currently, the KSE-100 is trading at a price-to-earnings (P/E) ratio of 6.0x, which remains below the 10-year historical average, despite generating an impressive cumulative return of 130% over the two years. The last two.