EUR 9.10 For Business Accounts Only

Stock Smart Weekly (Sep 15,2023)

StockSmart                             

Weekly Review                                 

The outgoing week saw the market awaiting the MPC meeting’s decision wherein expectations ranged from ~0% to 2% hike in policy rate, and last week’s T-Bill auction suggested the latter. However, the Finance Ministry decided to leave the policy rate unchanged at 22%, citing controlled inflation, lower CAD amongst others as the main impetus to maintaining the status quo. On a negative front, FX reserves saw a 9%YoY decline on the back of external repayments, although staying flattish WoW. Furthermore, remittances declined by ~22%YoY for the first 2 months of FY24, posing threats for an already cash strapped economy.

PkR maintained its upward trajectory against the US$ owing to controls imposed on open market buying and selling to adhere to IMF requirements. PkR closed at 296.85/US$ (↑2.05%WoW). Overall, trading session during the week remained within a narrow range with investors focused on economic and political stability. The benchmark index opened the week at 46,013pts, settling at 45,754pts (↓260pts, 0.57%WoW). Average traded volumes were ~141mn vs. ~138mn shares last week, up by ~2%WoW.

Other news for the week were; 1) NEPRA grilled CEOs of DISCOs over inflated electricity bills; 2) Bank deposits hit PkR26.1tn, up 18%YoY; 3) Electricity consumers hit by ~PkR8 – PkR15/unit hike in Aug’23; 4) Debt servicing looks to hit record PkR8tn owing to high interest rates; 5) Foreign banks seek 10% commission to endorse LCs; 6) Jul-Aug FDI up by 16%YoY to US$234mn; 7) Petrol price likely to go up by PkR16/liter.

Buying was witnessed sector wise in Leasing companies, emerging as the top performer recording gains of 3.8%WoW, whilst Close-end mutual funds saw major selling declining by 10.31%WoW. Flow-wise, major selling was recorded by Banks/DFI with a net sell of US$5.7mn. On the other hand, Insurance companies absorbed the selling with a net buy of US$7.9mn. Company-wise, top performers during the week were, i) PSEL (10.6%WoW), ii) SEARL (7.9%WoW), iii) PIOC (6.8%WoW), iv) DAWH (6.4%WoW), and v) MUGHAL (6.1%WoW), while top laggards were, i) HGFA (10.3%WoW), ii) MUREB (9.8%WoW), iii) UPFL (6.9%WoW), iv) THALL (6.8%WoW), and v) PKGS (6.6%WoW). Company wise total volume leaders were 1) BAFL at 66.11mn shares; 2) MLCF at 40.35mn shares; 3) KEL at 39.64mn shares; 4) WTL at 31.96mn shares; 5) MCB at 30.56mn shares.

 

 

Outlook

Going forward, market is expected to remain range-bound as investors continue to look towards the next IMF review and announcement of the general elections schedule. We continue to advise investors to remain cautious while taking positions and invest in companies with strong fundamentals or high dividend-yielding scrips.

 

 

 

AKD Research