PSX shortened trading week closes almost flat
Pakistan stock Exchange (PSX) witnessed volatility during the shortened trading week, as the benchmark Index declined through the first two trading days before recovering in the final session to close at 179,571 points, up 0.4%WoW. Due to the rollover activity, market participation increased to average daily trading of 1.5 billion shares as compared to 1.4 billion shares in the prior week.
On the positive side was, the US and Iran formally agreed on a 60-day roadmap towards a final deal, sustaining the recent downward momentum in international oil prices, extending decline on expectations of smoother crude flows through the Strait of Hormuz.
Sentiments further improved by Iranian President’s visit to Islamabad.
The National Assembly passed the PKR18.8 trillion FY27 budget, broadly favorable for key sectors including Cement, Steel, Refineries, Textiles, Pharma, and Technology, alongside reduction/ elimination of super tax for individuals and corporates.
Another positive was the reduction in petrol prices.
The T-Bill auction saw cut-off yields falling sharply across all tenors.
Broad money supply (M2) rose 9.2% FYTD to PKR44.2 trillion as of June 12, 2026 driven primarily by a 2.8%WoW increase in scheduled bank deposits.
Other major news flow during the week included: 1) Gulf oil tanker rates nearly doubled as Middle East producers accelerated crude exports, 2) Pakistan expected to save US$3.24 billion through conversion of the Jamshoro Power Plant, 3) Government and the oil industry reached an agreement on a stable petroleum pricing formula, and 4) GoP to handover PIA to new owners by the month-end.
The most active sectors were: Leather & Tanneries, Sugar & Allied Industries, and Textile Composite, while laggards included: Vanaspati & Allied Industries, Synthetic & Rayon, and Refinery.
Major buying was recorded by Companies of US$209.3 million, while major net selling was recorded by Foreigners of US$159.4 million.
Top performing scrips were: KEL, SRVI, MLCF, ILP, and SNGP, while laggards included: SSOM, AIRLINK, TPLRF1, BAFL, and ABL.
According to AKD Securities, progress on US-Iran deal, along with International oil prices would remain the key focus. Additionally, ease in inflation amid decreased oil prices and favorable financial results for June 2026 would support market sentiment in the near term.
Market continues to trade at attractive valuations.
The brokerage house forecasts the benchmark index to reach 263,800 by end December 2026.
Top picks of the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
Octopus Digital (OCTOPUS) held its analyst briefing lately to discuss CY25 financial results and the future outlook of the company. Following are the key takeaways: Company posted topline of PKR1.2 billion for CY25 as compared to PKR1.3 billion for the same period a year ago, down 4% YoY.
Gross margins for the period under review contracted to 36.7%, from 48.3%. Earnings for the year were reported at PKR28.9 million (EPS: PKR0.18) as against PKR205 million (EPS: PKR1.30) for CY24, a decline of 86%YoY. The decline in profitability is primarily attributable to increased cost of sales, alongside a sharp increase in the tax charge for the year.
The Company currently operates in Pakistan and the Middle East region, with plans to raise capital and expand into the North American market.
For CY26, management estimates the AMS Middle East pipeline at approximately US$15 million, with expected orders totaling around US$8 million. The AMS Pakistan pipeline is projected at US$2.2 million, with anticipated orders amounting to US$1.2 million.
Management’s target revenue mix is 40% from growth in existing customers and 60% from new customers, alongside a stated objective of growing each existing customer’s revenue five-fold.
Go-to-market strategy is built on two premise: 1) channel partnerships and 2) direct out reach. Management stated that the product development’s original timeline was planned at 24-30 months but took 36-42 months in practice, putting the company roughly 12 months behind its original internal schedule.
Select Technologies (SELECT) was incorporated in 2021 as a wholly owned subsidiary of Air Link Communication (AIRLINK) to establish manufacturing and assembly operations for consumer electronics in Pakistan. The Company assembles smartphones, smart TVs, air conditioners, and other appliances for global brands including Xiaomi and Hisense, supporting the localization agenda and growth of the domestic technology ecosystem.
Despite being established in 2021, SELECT has quickly emerged as a key player in Pakistan’s electronics manufacturing sector, capturing a 15.5% share of the smartphone assembly market in FY25. The Company’s growth is supported by AIRLINK’s extensive distribution network and strong industry relationships.
SELECT is expanding its manufacturing footprint through its new Sundar Green SEZ facility, which offers tax exemptions until FY35 and will raise annual capacity to 7.0 million smartphones, 360,000 smart televisions, and 400,000 air conditioners. The expansion, supported by partnerships with Xiaomi and Hisense, strengthens its position in Pakistan’s electronics manufacturing sector and supports product diversification.
The Initial Public Offering (IPO) of SELECT aims to raise PKR2.49 billion through the issuance of 88.9 million ordinary shares at a floor price of PKR28.00/ share. The proceeds will primarily be utilized to establish a new Air Conditioner manufacturing facility at Sundar Green SEZ, expand the TV production line (including large-screen models), and upgrade smartphone plant & machinery, alongside funding working capital requirements to support higher inventory and LC-backed imports.
Taurus Securities has “BUY” recommendation for SELECT that is based on: 1) Strategic partnerships with global leaders Xiaomi and Hisense; 2) SEZ tax exemption till FY 2035; 3) Proven ability to scale, with revenue achieving a 1.5x CAGR from FY22 to FY25 and gross margins improving from 5% to 9%; 4) Product diversification into Smart-TVs and Air Conditioners; and 5) Attractive valuation, offering a 33% discount to sector P/E multiples, with DCF-based fair value representing 67% upside from the floor price.