Markets expect a rate cut of 100bps, could potentially stimulate positive market sentiment.

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PSX’s outlook

Ongoing discussions with the IMF focus on securing the SBA’s second tranche. On successful conclusion, Pakistan will receive the third tranche of the SBA, totaling USD 1.1 bn. Additionally, the energy minister has emphasized the importance of addressing the energy circular debt, with efforts to expedite its resolution underway; any favorable progress in this regard would uplift market sentiment. Moreover, the upcoming MPC meeting scheduled for 18th Mar’24, where we expect a rate cut of 100bps, could potentially stimulate positive market sentiment.

 

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 5.9x offering a dividend yield of ~10.5% as compared to its 5-year average of ~7.7%.

 
 

Courtesy – AHL Research

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