EUR 9.10 For Business Accounts Only

Stock Smart Weekly (Nov 03, 2023)

StockSmart                            

Weekly Review                                

Market maintained its positive momentum this week as well, challenging its previous highs and closing at an all-time high of 53,123pts, surpassing the previous closing high of 52,876pts recorded on May 24, 2017. Over the week, the market gained 2,179pts, reflecting a 4.3%WoW increase. The positive momentum was fueled by the overall improvements in macros, notably the decision to keep interest rates unchanged at 22% in the last MPC meeting. Additionally, decreasing inflation, with Oct’23 CPI at 26.9%YoY, and the positive feedback from the IMF team's pre-scheduled visit added to the positive sentiment. Furthermore, political stability, marked by the announcement of final election dates, also contributed to the favorable market conditions.

Market participation also improved significantly, with an avg. traded volume of 451mn sh compared to avg. of 366mn sh in the previous week, marking a 23%WoW increase. However, trade deficits widened in Oct’23, reaching US$2.1bn compared to US$1.5bn in previous month, driven by a 20.3%MoM increase in exports. On the currency front, the rupee depreciated by 1.3%WoW against the greenback, closing at PkR284.3/US$ on Friday. Other notable news for the week include 1) Upto 172pc raise in gas price hike approved, w.i.e from Nov 1st, 2) T-Bill yield down by 25/41/40bps for 3m/6m/12m treasury bills, respectively. 3) Rs66bn more than target: Jul-Oct provisional collection stands at Rs2.748trn, 4) POL products’ prices kept unchanged, 5) Textile exports rebound in October after months of slump. Sector-wise, Refinery, Cable & Electrical goods, and Tobacco were amongst the top performers, up 11.5%/10.7%/10.6%WoW respectively. On the other hand, Transport, Leasing companies, and Vanaspati & Allied industries were amongst the worst performers with a decline of 2.7%/2.3%/0.8%WoW. Flow wise, major net selling was recorded by companies with a net sell of US$3.94mn. On the other hand, Banks absorbed most of the selling with a net buy of US$3.01mn. Company-wise, top performers during the week were, i) ILP (up 25.2%WoW), ii) BIPL (up 25.1%WoW), iii) FFBL (up 18.0%WoW), iv) CEPB (up 15.2%WoW), and v) SRVI (up 14.7%WoW), while top laggards were, i) TRG (down 6.6%WoW), ii) BOP (down 6.5%WoW), iii) PGLC (down 5.0%WoW), iv) KEL (down 4.6%WoW), and v) PSEL (down 2.9%WoW).

 

 

Outlook

The market is set to maintain a positive outlook, propelled by favorable economic developments like improving inflation and expected monetary easing in the current fiscal year. The ongoing IMF review adds significance, and positive outcomes in this area could further boost the market. We advise clients and investors to focus on companies with strong fundamentals. Additionally, companies with healthy dividend yields present an attractive strategy for safely navigating inflation.

 

 

AKD Research