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Stock Smart Weekly (May 21, 2021)

StockSmart                       

Weekly Review                                

The KSE-100 began on a strong note as COVID-19 cases witnessed a sharp dip in Eid holidays, leading to a gain of 622pts in the market. However, political hiccup in the form of Jehangir Tareen formalizing the split in the ruling political party in the following days kept the market range bound, with KSE-100 still closing the week at 45,915pts, up 1.64%WoW. The average turnover were also up by a sharp 152% to 609.4mn shares as investors returned to the market with gusto following the week long holidays. Key news driving the market sentiment included: (i) Saudi Arabia agreeing to defer oil facility to the tune of US$3bn for an extended period, (ii) Saudi Development Fund agreeing to give US$500mn for development projects, (iii) Pakistan approaching to review the tax collection target of PkR5.9trn, (iv) the country’s fiscal deficit rising to 3.6% of GDP in 9MFY21, (iv) reserves falling US$778mn during the week on external debt repayment, (v) LSM increased by 22.4%YoY, but contracted 7.7%MoM, (vi) Federal cabinet giving nod to clear 40% of 35 IPPs dues, while working towards getting NAB’s nod to clear 40% dues of 12 IPPs and, (v) Gul Ahmed (GATM) announcing spin-off of ‘Ideas’ for IPO. Flow wise, BYCO deal in the outgoing week caused a net sell of US$49.35mn by foreigners which was absorbed by (US$37.18mn) and companies (US$18.07mn). Scrip wise, top performers were, i) HASCOL (+20.2%WoW), ii) KEL (+14.9%WoW), iii) UNITY (+4.9%WoW), iv) SNGP (+10.3%WoW), and v) SHFA (+10.0%WoW), while laggards were, i) GATI (down 16.9%WoW), ii) SFL (down 11.0%WoW), iii) ANL (down 8.4%WoW), iv) AGP (down 5.7%WoW), and v) SYS (down 4.0%WoW).

Outlook

Monetary Policy Statement (MPS) is scheduled to be announced in the coming week, where status quo is expected. Newsflow with regards to upcoming fiscal budget is more likely to drive market sentiment.

AKD Research