EUR 13.68 For Business Accounts Only

Stock Smart Weekly (May 05,2023)

Weekly Review                                

Market remains green throughout the week, as buyback announcements from LUCK and HBL’s Sponsors boosted investor’s confidence. KSE100 index gained 661 points during the week to close at 42,242, an increase of 1.6%WoW. Likewise, Participation also witnessed an increase of 17.5%WoW averaging 244.5mn shares compared to avg. of 208.0mn shares last week. On the macro front, IMF reviews still hang in the balance and as of the latest news, IMF will review the budget plans for upcoming year. While, political instability still persists, as deadlock remains on the election dates between PTI and the incumbent government. Internationally, crude oil prices dropped during the week due to lower than anticipated demand from China and FED rate hike by 25bps. WTI/Brent declined by 8.0%/8.1%WoW to currently trade at US$70.6/74.7/bbl, respectively. Moreover, FX reserves remains largely flat on a weekly basis to report at US$4.46bn on 28th April. On the currency front, PkR remains stable during the week to close at PkR283.59/US$, a gain of 0.1%WoW. Other major news flows during the week included; 1) July-April FY23; Trade deficit declines 39.62pc to $23.71bn YoY, 2) Food pushes inflation to record 36.4pc in April, 3) FBR suffers shortfall of over Rs100bn in April, 4) POL products: April sales decline 46pc to 1.17MTs YoY, 5) April cement dispatches fall 16.55pc to 2.95m tons YoY, 6) Power Div says circular debt crosses Rs4trn mark. Sector-wise, Synthetic & Rayon, Woollen, and Leasing Companies were amongst the top performers, up 6.8%/6.4%/6.2%WoW respectively. On the other hand, Fertilizer, Property, and Refinery were amongst the worst performers with a decline of 3.9%/3.7%/2.7%WoW. Flow wise, major net selling was recorded by Foreigners with a net sell of US$6.1mn. On the other hand, Individual absorbed most of the selling with a net buy of US$8.0mn. Company-wise, top performers during the week were, i) PGLC (up 32.8%WoW), ii) IBFL (up 23.0%WoW), iii) PKGS (up 18.7%WoW), iv) UPFL (up 14.7%WoW), and v) LUCK (up 13.5%WoW), while top laggards were, i) ENGRO (down 12.1%WoW), ii) DAWH (down 11.3%WoW), iii) PAKT (down 8.1%WoW), iv) JVDC (down 8.0%WoW), and v) JDWS (down 7.8%WoW).

 

Outlook

Going forwards, any positive development on the IMF front and political stability would further boost the investor’s confidence. However, market upside is expected to remain limited due to record high interest rates in the country and rampant inflation (April CPI 36.4%). We advise investors to take a cautious approach while building positions in the market and we continue to advocate the stocks with dollar-denominated revenue streams (Technology and E&P sector), to hedge against the currency risks or companies with healthy forward dividend yields.