After over a month of unexpected political events and increasing political uncertainty, the dust finally seems to have settled. Amid opening of the Supreme Court at midnight, national capital being placed on red alert, Election Commission called up into action, resignations from Attorney General & NA Speaker, the much awaited voting on the No-confidence motion against the Premier tabled by the Joint Opposition finally took place in the National Assembly on April 10th, 2022. Resultantly, the sitting PM was ousted as 174 of the (~51% of total 342 MP’s) Members of Parliament voted in favor of Imran Khan ceasing to hold office.

Settling political uncertainty and tightening economic measures bode well for the local bourse, in our view. Recent political noise had put the KSE-100 performance in jeopardy and investors on the sidelines, however, now we expect a return in trading volumes and greater investor participation. That said, we opine in the short run cyclicals (Cements, Steel & Autos) and low market cap stocks will outperform the broader index however, for a longer investment horizon we maintain our liking for low P/E, high dividend yielding stocks in the Banks, E&P’s, Fertilizers and Textiles space.

Courtesy – BMA Capital Management Ltd.