EUR 9.10 For Business Accounts Only

Stock Smart Weekly (Dec 22, 2023)

StockSmart                            

Weekly Review                                

After surpassing each high for the last two months, the KSE100 index experienced a downward trajectory, losing 6.69%WoW to close at 61,705pts. Overall, selling in scrips was witnessed as the year closes. On the bright side, after much anticipation, ECP issued the elections schedule for 8th February. Moreover, Pakistan recorded a current account surplus of $9mn in Nov’23 after having seen four consecutive deficits in the months before. Furthermore, the Ministry of Energy has authorized the plan to settle Rs. 262bn payables to WAPDA and GPPs in accordance with IMF’s direction, which is expected to curb the rising power circular debt. Moreover, Foreign Direct Investment for the first five months of this fiscal year showed a total of $656mn, reflecting an increase of 8%YoY. On the other hand, power generation cost surged by 20%YoY in Nov’23 (to Rs. 7.17/kWh). Market participation witnessed a slight decline, with daily traded volumes averaging 1.22bn shares (down 3%WoW). On the currency front, the Pakistani Rupee maintained its appreciation momentum by gaining 0.26%WoW against the US Dollar, closing at PkR282.53/US$ at week-end. Other major news flows during the week include,1) LSMI output decreased by 4.08%YoY for October 2023, 2) Textile exports fell by 5.43%MoM in November, 3) Jul-Nov borrowing down $0.829bn YoY to $4.285bn, 4) SBP’s reserves fall by $136mn to $6.91bn, 5) Petroleum group imports for Jul-Nov witnessed 16.19%YoY negative growth. On the sectorial front, Textile Weaving and Automobile Parts & Accessories were amongst the best performers with a growth of 2% and 0.6% WoW, respectively. Whereas, Close Ended Mutual Funds, Modarabas, and Inv. Banks were the top laggards with a decline of 14.7%/11.9%/11.5%WoW, respectively. Flow wise, major net selling was recorded by Mutual funds with a net sell of US$14.26mn. On the other hand, Insurance companies absorbed most of the selling with a net buy of US$9.31mn. Company-wise, top performers during the week were, i) PSMC (up 10%WoW), ii) HCAR (up 4.3%WoW), iii) PSEL (up 2.6%WoW), while top laggards were, i) PIBTL (down 19%WoW), ii) ANL (down 18.4%WoW), iii) PAEL (down 17.7%WoW), iv) DAWH (down 17.7%WoW), and v) PSX (down 15%WoW).

 

Outlook

Going forward the market may see a correction and end the year with a positive note. Furthermore, upcoming elections hold pivotal significance, and their successful conclusion could further elevate investor confidence. Our advice to investors is to retain long-term positions in companies with solid fundamentals, meanwhile exercising prudence in dealing with any fundamentally weak entities through a timely profit-taking approach. Moreover, companies with robust dividend yields, particularly in the Banking, Energy, and Fertilizer sectors, present opportunities for accumulation.