The market maintained its upward trajectory throughout the 2-day working week, (due to Eid-ul-Fitr holidays), settling at an all-time high level above 70,000 points. The positive sentiment stemmed from the agreement between Pakistan and KSA to expedite the planned Saudi investment package for Pakistan worth USD 5bn, during Prime Minister Shehbaz Sharif’s visit to KSA. Moreover, Pakistan’s government international bond of USD 1bn is set to mature on 15th Apr’24. Furthermore, remittances increased by 16% YoY to arrive at USD 3.0bn during Mar’24, the highest remittances after Apr’22. Additionally, during the week PKR remained unchanged at 277.94 against USD. Overall, the market closed at 70,315 points, increasing by 1,898 points | 2.77% WoW.
Sector-wise positive contributions came from i) Commercial Banks (563pts), ii) Fertilizer (344pts), iii) E&P (250pts), iv) Power (179pts) and v) OMC’s (106pts). Meanwhile, the sectors which mainly contributed negatively were i) Automobile Parts (4pts), and ii) Insurance (3pts). Scrip-wise positive contributors were FFC (352pts), HUBC (176pts), MEBL (172pts), UBL (113pts), and MCB (89pts). Meanwhile, scrip-wise negative contributions came from ENGRO (51pts), DAWH (45pts), BAFL (14pts), ILP (5pts), and KEL (5pts).
Foreigner buying continued during this week, clocking in at USD 4.2mn compared to a net buy of USD 3.9mn last week. Major buying was witnessed in All other sector (USD 3.2mn) and Commercial banks (USD 0.8mn). On the local front, selling was reported by Banks/DFIs (USD 4.9mn) followed by Individuals (USD 3.2mn). Average volumes arrived at 363mn shares (up by 18% WoW) while the average value traded settled at USD 59mn.
Other major news: i) MoF, FBR direct officials not to engage with media ii) US, Pakistan may hold ‘economic dialogue’, iii) FIA deputes senior officers at 10 Discos, iv) Dar, Blinken agree to boost cooperation, and v) Government plans Rs4.965 trillion bank borrowing in April-June.
Outlook and Recommendation
In the upcoming week, we expect the market to remain positive. Developments related to SOEs privatisation or EFF program with IMF will further improve market sentiment. Furthermore, the result season is expected to commence in the upcoming week, where certain scrips are anticipated to be in the limelight amid the expectation of robust results. Moreover, stocks continue to trade at attractive levels, which could further entice investors. Our preferred stocks are OGDC, MARI, MCB, UBL, MEBL, FABL, HBL, LUCK, MLCF, FCCL, FFC, HUBC, PSO and INDU. The KSE-100 is currently trading at a PER of 4.2x (2024) as compared to its 5-year average of 5.6x offering a dividend yield of ~10.3% as compared to its 5-year average of ~7.6%.
Courtesy – AHL Research