EUR 9.10 For Business Accounts Only

Stock Smart Weekly (Nov 10,2023)

StockSmart                             

Weekly Review                                 

The week saw the local bourse maintaining its relentless bull run, closing at 55,391pts (↑4.27%WoW),  with volumes averaging 544.05mn (↑20.8%WoW). The sentiments are driven by an overall positive atmosphere owing to IMF’s review under the SBA, as technical level talks end today, followed by policy level discussions beginning Monday. Overall, discussions seem to be on a positive trajectory with IMF mostly questioning the fiscal targets and delays regarding gas price revisions. On the macro front, expectations of a reduction in CAD projection during FY24 to US$4.5bn, alongside healthy agri output to boost exports sent positive signals. Further, crude prices continue to slide amidst uncertainty over China’s economic recovery and stability in US reserves; with Arab light/WTI/Brent standing at ~US$84.7/US$76.7/US$81.1/bbl. On the currency front, US$/PkR slid for the second straight week, ending at 287.03 (↓0.95%WoW) amidst rising import demand, alongside concerns regarding IMF talks. Furthermore, PIB auction held during the week saw yields declining on all three papers with 3/5/10yr bond yields standing at 17.39%/15.95%/15.10% (↓180/100/15bps), helping reinforce expectations of an end to further monetary tightening.

Other news for the week were; 1) Refinery sector: SIFC for assessing Sinopec’s interest; 2) $3bn projects approved for flood-hit areas; 3) IMF talks uncover major gaps; 4) Cotton production jumps by 83%; 5) ‘Reko Diq deal with Saudi firm this year’; 6) FCA for Sep 23: Nepra allows Discos Re0.4/unit tariff hike.

Buying was witnessed sector wise in Chemical and Cement, emerging as the top performers (↑8.53%/8.34%WoW), whilst Close-end Mutual Fund saw major selling (↓8.22%WoW). Flow-wise, major selling was recorded by Insurance cos. with a net sell of US$16.9mn, while Banks/DFI absorbed the selling with a net buy of US$16.3mn. Company-wise, top performers were, i) CNERGY (24.2%WoW), ii) KOHC (17.2%WoW), iii) CEPB (14.5%WoW), iv) FCCL (14.2%WoW), and v) KTML (14.1%WoW), while laggards were, i) HGFA (7.4%WoW), ii) UNITY (4.7%WoW), iii) BNWM (4.6%WoW), iv) EFUG (3.3%WoW), and v) ABOT (3.1%WoW). Total volume leaders were 1) CNERGY at 260.43mn shares; 2) PRL at 144.93mn shares; 3) HUMNL at 130.01mn shares; 4) KOSM at 91.53mn shares; 5) WTL at 81.75mn shares.

 

 

Outlook

Going forward, we maintain an optimistic outlook on the market and we believe the present rally to continue, albeit with episodes of profit taking. Our stance stems from an expected positive conclusion to the IMF’s review amidst improving macro indicators and fading uncertainty over the upcoming elections, even though the country faces tough economic decisions in the near future, in our opinion. Overall, we advise our clients to focus on fundamentals, with exposure in high dividend yielding scrips.

 

 

 

AKD Research