PakStox Outlook

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.

Last Friday, we mentioned that foreign selling appeared to be over, and today’s substantial net buying by 'foreign corporates' confirms this shift. Foreign corporates made net purchases of $3.5 million today. Between September 1st and October 4th, they offloaded a massive net amount of $72.7 million in PSX-listed securities. To put this into perspective, from the start of the year until August 31st, foreign corporates had made net purchases of $100 million in Pakistan's listed equities. However, due to the heavy selling in September, their net purchases now stand at just 30% of their total purchases for the year. Over the last 30 trading sessions, foreign corporates cumulative net selling stands at USD 66.87 million. Mutual funds continued their massive buying with net purchases of USD 9.05 million today. This trend is driven by investors shifting from money market funds to equities in response to a declining interest rate environment. In the last 30 trading sessions, mutua...

Foreign corporates were net sellers of a significant $4.3 million today at the Pakistan Stock Exchange. So far in September, foreign corporates have made net sales totaling over $16.6 million. Over the last 30 trading sessions, they have been net sellers of $10.8 million. Despite this, foreign corporates remain net buyers of $84.7 million year to date. Local mutual funds have become net buyers over the last thirty trading sessions, though remaining net sellers at the PSX on a year-to-date basis of almost $13 million in net sales. Insurance companies remain the only major local investors at the PSX that are net buyers on a year-to-date basis, with net purchases totaling $58 million. However, since the last week of August, they have turned into net sellers, and over the last thirty trading sessions, they have accumulated net sales of nearly $9 million. See Charts

Foreign Corporates net buying today was over $5.4 million. This is at a higher level than the avarege. The KSE100 Index rose by 620 points and closed near the 71k level. The bullish tone was set yesterday by foreign investors when they made a record net buying of $22 million in one day and forced the market to recoup its earlier intra-day losses. In ‘local investors’, the biggest net sellers were ‘companies’ with over $3.3 million net selling followed by ‘Individuals’ with a net selling of around $1.3 million. Foreign Corporates have made a net buying of over $ 50.7 million year to date. And this period 'overseas Pakistanis' have been a net seller of almost $5 million.  Foreign investors were heavy seller in the market in the January this year. It was probable just Fund that took the opportunity of quick capital gain in a short time as PSX started the bullish trend after IMF deal rose quickly.

Throughout the week, foreign investors, particularly foreign corporates, remained active participants in the Pakistan Stock Exchange (PSX), demonstrating sustained engagement. Their net buying activity amounted to over $3.8 million during this week. Starting in February 2024, foreign corporates have consistently shown a positive net buying trend at PSX. This follows a reduction of 50% in their cumulative net buying during the first month of this year. Since the beginning of February, foreign corporates have more than doubled their cumulative net buying at PSX. Notably, during this period, the KSE100 Index has experienced a significant uptrend, rising by approximately 10%. In contrast, overseas Pakistanis exhibited nominal net buying activity this week. Their impact on PSX direction remains limited, as their market activity tends to be sporadic and lacks significant influence.

Foreign corporate portfolio investment in the Pakistan Stock Exchange remained strong. For the week ending March 29, 2024, Foreign Corporates were a net buyer of $4 million. This took their net buying in PSX year to date to over $7.6 million. It means that over 50% of the net buying of foreign corporates at PSX took place this week when the KSE100 Index made its historic high of 67142.

As the KSE100 Index regains its 66k level, which it had reached before mid-December last year, 'Foreign Corporates' net buying stands at only $8 million in these three months to date. In the first month of this year, ‘Foreign Corporates’ were big sellers, managing a net selling of $38 million. Despite this, the strength of the Pakistan Stock Exchange was such that it hardly impacted the index, which remained around 62K. Since then, over the last two months, foreign corporations have reversed gears and become net buyers, accumulating a total of over $46 million. This surge settled the KSE100 Index above the 66k level again yesterday. When the PSX started tumbling after KSE100 Index surpassing the 66k level in mid-December last year, 'Foreign Corporates' were net buyers of over $66 million since the start of 2023. The KSE100 Index began to decline after closing at a historic high of 66,427 on December 12, 2023. Despite this, 'Foreign Corporates' remained net buyer...