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Stock Smart Weekly (Apr 23, 2021)

StockSmart                       

Weekly Review                                

Weak sentiment of the last week continued to derail investors’ confidence in the stock market with KSE-100 loosing 599pts during the week, closing at 44,707pts, down 1.32%WoW. First, the political uncertainty and shutter down calls by religious leaders caved the market, secondly the sharp rise in COVID-19 cases across the country with NCOC seriously thinking of imposing lockdowns in major cities shattered market’s confidence during the week. Though, support was expected to be provided by impressive results posted by Banks and Engineering sector which surpassed market expectations but due to overall uncertainty in the country, the market remained jittery. Participation during the week remained dull with average daily traded volume standing at 332.7mn shares against 368mn shares witnessed during last week. Other news flows during the week were, i) FBR opposes IMF’s proposal of Rs176bn new tax on salaried class, ii) Pakistan shared circular debt plan outline with WB, iii) MoE to submit new refinery policy to ECC next week, iv) OMCs refuse to bear losses: Govt likely to pass on losses in fuel transportation to consumers, and v) The World Bank has projected around 34% decline in Pakistan’s cotton production. Sector-wise, amongst major sectors, Engineering and Cements lost 5.98%WoW and 3.05%WoW respectively despite showing remarkable results whereas E&Ps and Autos witnessed flattish performance. Overall, sector wise major laggards were Cable and Electricals and Refinery, down by 6.08%WoW and 4.64%WoW respectively. Flow-wise, foreigners accelerated their buying spree by absorbing US$7.3mn while major net sellers were Mutual Funds and Companies with net outflow of US$7.73mn and US$5.35mn, respectively. Stock wise, top performers include, i) HMB (+13.6%WoW), ii) NBP (+13.4%WoW), iii) PSX (+13.2%WoW), iv) OLPL (+8.3%WoW), and v) GADT (+6.7%WoW) whereas laggards were, i) HINOON (down 9.6%WoW), ii) ATRL (down 9.5%WoW), iii) EPCL (down 9.2%WoW), iv) LOTCHEM (down 9.1%WoW), and v) FML (down 8.9%WoW).

 

Outlook

Growing fears of lockdown and surging COVID -19 cases are likely to define market sentiments in the next week as the threat of stringent lockdown in major cities by NCOC is still a possibility. Moreover, result season to remain in full swing with major earnings announcement include FFBL, ATRL, APL, CHCC, MUGHAL, INDU, DGKC, FFBL, TRG, PSO, NCL and LUCK but the market is likely to remain volatile over the next week.

AKD Research