Technology stocks lag behind market rally for third year

November 15, 2024 (MLN): Pakistan’s technology stocks are lagging behind the broader market for the third year in a row — a trend that’s driven largely by the muted performance from sector heavyweight Systems Ltd. and losses in TRG Pakistan Ltd.

The Technology & Communication sector has only managed gains of 24% so far this year, compared to a nearly 51% return for the benchmark KSE-100 Index.

That underperformance in returns is for the third consecutive year, according to data compiled by MG Research.

TRG Pakistan Ltd. shares have sank 26% this year. The company incurred a massive loss of Rs30.84 billion in year ending June 2024, translating into an LPS of Rs56.56.

The loss primarily originated in the company’s technical associate TRG International Limited (TRGIL), which holds a stake in Afiniti Limited; the Artificial Intelligence-based call centre management business.

Systems Ltd. shares have risen 22%, compared to a median return of 40% for the KSE-100 members.

Read more: Beckoning Losses: TRG at un-Artificial Intelligence

Meanwhile, the broader market has rallied to record highs this year driven by improving economic conditions, monetary easing, and a sharp decline in bond yields

Consequently, investors are piling into Pakistan stocks. The benchmark KSE-100 Index has notched 52 record closes this year, the second-highest this decade.

The index is up 31,741 points or 50.8% since January. Best-performers of the rally are Commercial Banks, Fertilizer, Oil & Gas Exploration, Cement, and Pharmaceuticals stocks.

Read more: Six giant companies are driving the KSE-100 rally

Read more: Investors rush into Pakistan IPOs for quick gains

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