PakStox Outlook

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reduced the policy rate by 200 basis points to 13%, effective December 17, 2024. This decision reflects easing inflation and improved economic growth prospects while maintaining a balance between inflation stability and sustainable growth. Inflation Headline Inflation declined to 4.9% in November 2024 due to lower food inflation and the fading impact of gas tariff hikes from November 2023. Core Inflation remains sticky at 9.7%, with volatile inflation expectations. Inflation for FY25 is expected to average well below the earlier forecast of 11.5-13.5%, though risks remain (e.g., revenue measures, food inflation, global prices). Economic Growth Growth prospects have improved, with real GDP growth for FY25 projected in the upper half of the 2.5-3.5% range. Industrial and agricultural activity is gaining momentum, supported by better-than-expected cotton arrivals and strong performance in manufacturing sectors like te...

The Monetary Policy Committee (MPC) reduced the policy rate by 250 basis points to 15%, effective November 5, 2024. This decision follows a faster-than-anticipated decline in inflation, aided by lower food inflation, stable oil prices, and no expected adjustments in gas tariffs and Petroleum Development Levy (PDL) rates. This marks the fourth consecutive rate cut since early June this year, after maintaining a steep policy rate of 22% for a year. The Monetary Policy Statement notes that; IMF Program: The new IMF Extended Fund Facility (EFF) approval has improved external inflows and reduced uncertainty. Market Yields and Inflation: Secondary market yields and the Karachi Interbank Offered Rate (KIBOR) have dropped, and October surveys showed improved consumer and business confidence alongside lower inflation expectations. Fiscal Challenges: The government’s tax collection fell short of targets in the first quarter of FY25, though non-tax revenues, boosted by SBP profits, supported fisc...

On November 1, 2024, mutual funds faced redemption pressure as the PSX reached record highs. They were net sellers of $3.2 million, reversing their recent trend of absorbing foreign selling. In contrast, foreign corporates were net buyers of $5.7 million, a significant shift after net sales of $120 million over the past two months.

  Pakistan Telecommunication Company Ltd (PSX:PTC): Financial Results - Q3 Sep2024: PTC, in Q3 Sep2024, incurred a loss of Rs. 137 million, (Rs. -0.04 per share). This reduces the total net income for the last four quarters to Rs. 0.7 per share. In the last four quarters, the company has paid no cash dividends. The profit after tax in the current quarter is shows no increase on the average PAT of the previous four quarters. Compared to same quarter last year; Revenue increased by 9%. Gross profit increased by 33%.  Despite a nearly 9% increase in revenue and an increase in gross margin compared to the previous year, PTC incurred a loss due to a 50% increase in financial charges. On a consolidated basis, PTC reported an after-tax loss of Rs 6.3 billion for this quarter and Rs 15.3 billion for the nine months ending September 2024. PTC is trading at a price-to-earnings ratio of 23. See PTC Earning Release

  National Refiner (NRL) , in Q1 Sep2024, incurred a loss of Rs. 7236.6 million, (Rs. -90.5 per share). This brings the total loss for the last four quarters to Rs. 328 per share. In the last four quarters, the company has paid no cash dividends. See NRL Earnings Release Attock Cement (ACPL) , in Q1 Sep2024, earned a net income of Rs. 61.9 million, (Rs. 0.5 per share). This brings the total net income for the last four quarters to Rs. 15.2 per share, with a total cash payout of Rs. 6.5 per share. The profit after tax in the current quarter is 93% lower compared to the average PAT of the previous four quarters. The income in the same quarter last year was boosted by Rs 2.2 billion on gain on sale of subsidiary. See ACL Earnings Release Frieslandcampina Engro Pakistan - FCEPL , in Q3 Sep2024, earned a net income of Rs. 765.8 million, (Rs. 1 per share). This brings the total net income for the last four quarters to Rs. 2.5 per share. In the last four quarters, the company has paid no...

Attock Petroleum-APL , in Q1 Sep2024, earned a net income of Rs. 2385 million, (Rs. 19.2 per share). This brings the total net income for the last four quarters to Rs. 88 per share, with a total cash payout of Rs. 27.5 per share. The profit after tax in the current quarter is 31% lower compared to the average PAT of the previous four quarters. Gross margin in this quarter was drastically down to 3.5%. And Sales decline was 17%. Compared to same quarter last year; Revenue declined by 17%. Gross profit declined by 61%. Profit before tax declined by 56%. Profit after tax declined by 55%. APL is trading at a price-to-earnings ratio of 5.1, with a dividend yield of 6.1%. The largest shareholders of APL are Pharaon Investment Group Limited (Holding) s.a.l (34.38%), Attock Refinery Ltd (21.88%), Pakistan Oilfields Ltd (7.02%), and The Attock Oil Company Limited (2.20%). APL holds a small stake of 1% in NRL and 1.68% in ATRL. Substantial short term investment in current assets gets a decent fi...

Meezan Bank - MEBL : In Q3 Sep2024 earned a net income of Rs. 14.4 per share and declared a cash dividend of Rs. 7 per share. This brings the total net income for the last four quarters to Rs. 58.1 per share, with a total cash payout of Rs. 29 per share. The profit after tax in the current quarter is 2% lower compared to the average PAT of the previous three quarters. Effective tax rate in this quarter was 55%. The higher taxation has offset the top line growth. See MEBL Earning Release Pakistan Oilfields - POL , in Q1 Sep2024, earned a net income of Rs. 2.568 billion (Rs. 9 per share). This brings the total net income for the last four quarters to Rs. 112.8 per share, with a total cash payout of Rs. 95 per share. Compared tpo same quarter last year; Revenue declined by 7%. Gross profit declined by 16%. Profit before tax declined by 69%. Profit after tax declined by 74%. The major hit to the profitability in this qaureter was exploration cost of Rs. 7.7 billion. Other income ...

Oil prices were under pressure this week. Brent crude oil futures fell 1.9% to $73 per barrel on Friday, registering the biggest weekly loss since early September, with prices dropping over 7%. The decline was attributed to weaker demand forecasts from OPEC and the International Energy Agency (IEA), slowing economic growth in China, and signs of easing geopolitical tensions in the Middle East. Both OPEC and the IEA revised down their demand forecasts for 2024 and 2025. China's refinery output declined for the sixth consecutive month, impacted by weak fuel demand and the growing adoption of electric vehicles (EVs). Meanwhile, U.S. crude oil production reached a new record last week. Although a drawdown in U.S. crude inventories and stronger-than-expected retail sales in September provided some support to oil prices, easing concerns about a broader conflict in the Middle East exerted additional downward pressure on the market.

After a remarkable 2,000-point surge and reaching a new all-time high last week, the market saw profit-taking this week. Despite hitting an intra-week record high of 86,520, selling pressure led the KSE Index to close 231 points lower, finishing the week at 85,250. Mutual funds were net sellers of a substantial $1.8 million today, marking a shift from their consistent buying trend, which had resulted in net purchases of $90.9 million since early September. Despite last day's net selling this week mutual funds were net buyers of a good amount of $ 7.5 million. The oil and gas sector experienced significant losses on the final trading day of the week. This sector, with a leading index weight, had been steadily rising due to the re-entry of local funds into the market. Overseas Pakistanis, typically less active in the Pakistan Stock Exchange (PSX), have joined foreign corporations in a consistent selling spree since the beginning of September, accumulating net sales of $ 6.6 million. ...

Once again, today, foreign corporates (primarily foreign funds) were the major sellers at the PSX today, with a net sale of Rs 11.8 million. Local insurance companies, however, stepped in with a net buy of approximately $10.5 million. This marks the second consecutive day of net buying by insurance companies, following their $10 million net purchase yesterday—a notable shift after their substantial net sales of $28 million over the past three weeks. Mutual funds, which have been strong buyers recently, saw more muted activity today, with a net buy of just $2.2 million. Since foreign funds began offloading PSX stocks from September 1st, local mutual funds have made cumulative net purchases totaling $83 million. Had it not been for the mutual funds' re-entry into the market, the PSX would have likely seen a more significant decline. Mutual funds are forced to enter the market as their investors are shifting from money market funds to equities. Conversely, if foreign funds hadn't ...