EUR 14.08 For Business Accounts Only

Stock Smart Weekly (Dec 24, 2020)

StockSmart                       

Weekly Review                                

KSE-100 hundred started the rollover week on a negative note as global crude oil prices declined by almost US$3/bb, concerns regarding a potentially more dangerous strain of COVID-19 coupled with increased border tensions took a toll on the market.  However towards mid of the week, market went into a positive momentum on the back of another current account surplus for Nov'20 while oil prices also steadied globally. KSE-100 closed the week at 43,417pts, down 0.74%WoW. Oil and gas exploration and refineries were among the major laggards for the week as pressure on oil prices kept the sectors under pressure. On the other hand, cement sector was among the leaders as investors cheered healthy local cement demand despite winter season. Major news flow during the week included, i) Pakistan's textile group exports registering an increase of 9.27%YoY as it reached US$1.3bn in Nov'20 compared to US$1.18bn in Nov'19, ii) Government of Pakistan successfully concluding negotiations with 21 creditor countries for debt suspension amounting to US$1.7bn., iii) Government considering a proposal to increase the margins of the Oil Marketing Companies (OMCs) and dealers on high-speed diesel (HSD) and petrol, iv) Pakistan and the IMF inching towards formal revival of the stalled Fund programme, as the government decided to hike power tariff by 25-30%, and v) The Federal Cabinet granting massive tax exemptions to facilitate promotion of four-wheeler electric vehicles (EVs) in the country. Avg. volumes declined to 507mn shares vs. 550mn shares in the previous week. Activity wise, foreign outflow stood at US$23.3mn but was absorbed by Companies and Mutual Funds with US$24.8mn and US$1.5mn inflows during the week. Top performers during the week were, i) GHGL (+14.7%WoW), ii) CHCC (+11.2%WoW), iii) HMM (+11.0%WoW), iv) PIOC (+9.1%WoW), and v) INIL (+7.7%WoW) whereas laggards were, i) ANL (down 9.9%WoW), ii) AGIL (down 7.9%WoW), iii) ATRL (down 7.2%WoW), iv) MEBL (down 5.4%WoW), and v) PPL (down 5.2%WoW).

 

Outlook

Developments on the IMF program resumption front (timing and scale of measures would be of utmost importance), the COVID-19 situation in home-ground (positivity ratio has decreased while death continue to increase) and global crude oil price movements are likely to sway the market sentiments, going forward. Resurgence in energy prices remain double edged sword, where interest in energy chain and banking sector likely to continue.

AKD Research