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Stock Smart Weekly (Feb 16,2024)

Weekly Review

Market remained volatile throughout the week with volatility mirroring ongoing political uncertainty surrounding the formation of next government. Despite being eight days since elections, 
clarity remained elusive. While signs pointed to PML-N securing the lower house, coalitionbuilding complexities persisted. Alongside, announced protests from major parties alleging electoral rigging deepening uncertainty. Aforementioned pervasive uncertainty plummeted the 
benchmark index to below 60k pts in 35 trading days (on closing basis), closing at 59,873pts on 
Friday, a weekly decline of 3.7k pts/4.9%. Adding fuel to the fire, news of the IMF rejecting the 
proposed circular debt reduction and industrial tariff rationalization plan, further dampened investor sentiment. Another blow during the week was gas price hike w.i.e from Feb’24, with highlighted increase of 175% in feed gas price fertilizer companies on the Sui network. However, 
amidst the tumult, remittances remained robust at US$2.4bn in Jan’24. On the currency front, 
though rupee is maintaining stability against the greenback, however with IPPs encountering US$ 
shortage (indicated in a letter PPIB to SBP governor) and REER climbing to 106.9 poses a potential 
risk for devaluation.
Market participation increase by 14.5%WoW, with daily traded volume averaging at 350mn sh vs. 
306mn sh in previous week. Other major news flows during the week included; 1) LSM output 
increased 16%MoM, 2) Petrol up by Rs2.73, diesel by Rs8.73 per liter, and 3) Car sales rise 30pc in 
January. Sector-wise, Leasing companies, and Synthetic & Rayon were amongst the top performers, up 5.5%/2.0%WoW respectively. On the other hand from mainboard, E&P, Refinery, and 
OMC were amongst the worst performers with a decline of 6.5%/6.4%/6.2%WoW. Flow wise, 
major net selling was recorded by Brokers with a net sell of US$5.9mn. On the other hand, Foreigners absorbed most of the selling with a net buy of US$5.2mn. Company-wise, top performers 
during the week were, i) PGLC (up 15.2%WoW), ii) EFUG (up 6.0%WoW), iii) GADT (up 5.8%
WoW), iv) FATIMA (up 5.6%WoW), and v) AGP (up 5.5%WoW), while top laggards were, i) OGDC 
(down 25.6%WoW), ii) NRL (down 18.7%WoW), iiI) PTC (down 17.4%WoW), iv) PPL (down 15.9%
WoW), v) PSO (down 14.1%WoW).

Outlook

Looking ahead, market is expected to remain volatile in the near term, but will cool off as political 
dust settles, especially with the announcement of the upcoming cabinet. However, in the medium 
term, market performance will likely hinge on the signals from the new govt's dealings with IMF 
for second SBA review and the next EFF program. With uncertainties still prevalent, we advise 
market participants to remain cautious and skew their exposure towards blue-chip stocks.