EUR 13.68 For Business Accounts Only

Stock Smart Weekly (Aug 11,2023)

Weekly Review                                

The week began on a positive note facing volatilities as the week prolonged with the benchmark index settling at 48,424pts, reflecting a decrease of 0.33%WoW. The trading volume during the final session was relatively lower compared to the previous session. Overall the market witnessed a decrease of 162pts WoW. Major drivers during the week remained multimillion investment commitment by GCCs i.e., UAE and Saudi Arabia and the triumphant oversubscription of MTBs much higher than the anticipated pre-auction target. Furthermore, the total forex reserves witnessed a decline from 13.47Mn to 13.34mn (↓0.9%WoW), additionally workers’ remittances declined by 7.3%/19.3% MoM/YoY to US$2.03bn in Jul’23, cumulatively the total remittances for 7MCY23 stood at US$14.9bn (↓16.9%YoY). The market capitalization dropped from PkR7,290bn to PkR7,232bn. The average daily turnover clocked in at 287mn (↓26.9%WoW) Other notable news from the week were (1) CCoE’s approval of upgradation for local refineries (2) Transfer of 15 companies to MSCI FM index from the small cap index, and 41 other companies were added to the small cap MSCI Index (3) Emergence of NBP, BoP and U bank as the top agri-microfinance creditors (4) Penetration of local rice traders into the global rice trade nexus as a result of imposed restrictions on Indian traders (5) Dissolution of the national assembly and anticipation of the caretaker govt. Sector-wise, REFINERY declined by 11%, while INV. BANKS / INV. COS. / SECURITIES COS. gained 8.3%. Company wise top performers: DAWH (↑19.9%WoW), AICL (↑8.4%WoW), FABL (↑5.7%WoW), UBL (↑4.8%WoW), NATF (↑4.8%WoW). Laggards included PSMC (↓9.9%WoW), HCAR (↓10.3%WoW), CNERGY (↓11.6%WoW), SML (↓12.5%WoW), SEARL (↓13.0%WoW), and NRL (↓16.0%WoW). Flow-wise, major net selling was recorded by BANKS/DFIs with a net sell of US$6.9mn. On the other hand, Insurance Companies absorbed all of the selling with a net buy of US$6.4mn.

 

Outlook

The market is expected to portray positivity, while the new caretaker govt. and the relation it fosters with IMF prove to be the turnkey for market stability. After a significant upside, market still remain cheap at the forward p/e of 3.1x. Additionally, the influx of investments by UAE and Saudi bolster and affirm stability. Market participants are advised to implement a cautious approach when investing while focusing on dollar denominated revenue stream companies like E&Ps and Technology to hedge against currency risk or in companies with healthy dividend yields.