EUR 9.10 For Business Accounts Only

Stock Smart Weekly (Sep 28, 2023)

StockSmart                            

Weekly Review                                

The market remained lackluster throughout the week, moving within a narrow range of 413 points. Despite the visit of the Caretaker Prime Minister to the UN, no significant positive developments or outcomes were observed. On the macroeconomic front, the federal government is intensifying its efforts to reduce spending following a recommendation from the World Bank, aiming to simultaneously increase revenues. As the news flows indicating a possible reduction in the PSDP spending. Inflation for this month is still expected to remain high, ~30%YoY. Meanwhile, the Pakistani rupee continues to strengthen against the greenback, posting a weekly gain of 1.4% to close at PkR287.7/US$ by week-end. Internationally, oil prices have resumed their upward trend, amid supply crunch, after a brief easing earlier in the week, with Brent crude currently hovering at US$95.6 per barrel. Overall, average trading volumes improved by 45.6%WoW, clocking in at 202mn shares, compared to 139mn shares traded in the earlier week. The benchmark KSE-100 Index lost 189 points during the week, depicting a 0.4% decrease in the index. Other major news flows during the week were; 1) Profit repatriation surges 74pc in July-August, 2) Jul-Aug period: Borrowing from multiple financing sources stands at $3.206bn, 3) RDA inflows reach $6.6bn as of August, 4) CGS of KSA Armed Forces meets President, and 5) Pakistan owes $1.2bn to Chinese power producers. Sector-wise, Transport, Tobacco, and Paper & Board were amongst the top performers, up 7.7%/6.5%/5.1% WoW respectively. On the other hand, Vanaspati and allied industries, Technology and Textile were amongst the worst performers with a decline of 5.1%/3.8%/2.3% WoW. Flow-wise, major net selling was recorded by Banks with net selling of US$6.3mn. On the other hand, Individuals and companies absorbed most of the selling with a net buy of US$3.7mn and US$1.4mn, respectively. Company-wise, top performers during the week were, i) EFUG (+16.8%WoW), ii) PGLC (+16.3%WoW), iii) CEPB (+9.4%WoW), iv) NRL (+7.7%WoW), and v) PAKT (+7.4%WoW), while top laggards were, i) POL (down 11.2%WoW), ii) GADT (down 9.2%WoW), iii) SYS (down 7.7%WoW), iv) FFBL (down 6.2%WoW), and v) HBL (down 6.1%WoW).

 

Outlook

Looking ahead, the market's performance is anticipated to be significantly influenced by the upcoming IMF review scheduled for November. Regarding the political landscape, while the expected timeline for elections is given, providing exact dates for the elections would be a positive development. Additionally, upcoming inflation readings and current account data would remain in the limelight. Overall, we continue to advise our investors to remain cautious while investing and consider companies with strong fundamentals and high dividend-yielding companies.

 

AKD Research