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Stock Smart Weekly (Nov 24,2023)

StockSmart                             

Weekly Review                                 

This week, market skyrocketed with the KSE100 index continuing to touch an all time high of 59,086pts on Friday, reflecting a significant increase of 3.55%WoW. Positive developments encircled the current account deficit narrowing to $74mn in October, a decline of 91%YoY, keeping in line with shortage of dollars in the market needed to open LCs. During 4MFY24, FDI rose by 7% to $525mn which further contributed to the bullish market. Moreover, the IT export remittances for July-October increased by 4.4%YoY to $893mn and total borrowing fell by $0.41mn to $3.85bn. International oil prices (Brent Crude) fell significantly to $78.93/barrel on Wednesday amidst delayed OPEC+ meeting and recovered to $81.42/barrel on Friday. Market participation witnessed a decline, with an avg. traded volume of 657mn shares, marking a 8.9%WoW decrease from the previous week's avg. of 721.3mn shares. On the currency front, the rupee appreciated by 0.39%WoW against the greenback, closing at PkR285.37/US$ on Friday. Other notable news for the week includes 1) SBP forex reserves dropped by $217mn to $7.2bn, 2) Power generation cost fell by 19.1pc in 4MFY24, 3) Dr. Shamshad Akhtar is expecting a 2-2.5% GDP growth for FY24, 4) Power ministry recovered PkR55bn from delinquent consumers, 5) In 4MFY24 PkR300.9bn were authorized for projects under PSDP and 6) Nepra approved Rs1.52 per unit surcharge on KE consumers. Sector-wise, Woollen, Leasing Companies, and Glass & Ceramics were amongst the top performers, up by 43.5%/22.6%/17.0%WoW respectively. On the other hand, Synthetic & Rayon, Tobacco, and Refinery were amongst the negative performers with a decline of 1.7%/1.0%/0.7%WoW respectively. Flow wise, major net selling was recorded by Banks with a net sell of US$5.03mn. On the other hand, individuals absorbed the selling with a net buy of US$3.52mn. Company-wise, top performers during the week were, i) PGLC (up 52.4%WoW), ii) BNWM (up 43.5%WoW), iii) GHGL (up 25.4%WoW), iv) ABOT (up 19.1%WoW), and v) PSMC (up 18.9%WoW), while top laggards were, i) UNITY (down 5.4% WoW), ii) EFUG (down 5.2%WoW), iii) CNERGY (down 4.9%WoW), iv) PIOC (down 3.9%WoW), and v) OGDC (down 3.3%WoW).

 

 

Outlook

We maintain our positive outlook on the market owing to favorable economic developments like improving inflation and expected positive economic recovery in the current fiscal year. While the market is flourishing, we strongly advise market participants to avoid potential pitfalls and instead concentrate on companies with robust fundamentals. Furthermore, considering companies with healthy dividend yields can be a prudent strategy for navigating inflation safely.