Notwithstanding the positives for oil explorers, the surge in international oil prices will hurt overall investor sentiment given oil imports are about 7% of Pakistan’s GDP. The Cement sector could be affected in particular given headwinds from development expenditure cuts and sharply higher coal prices. A lot of bad is in the price with forward P/E at 5x but no harm being cautious for now. Oil explorers such as POL, OGDC, PPL look good here, as do HBL and GATM. We would watch for any dips in likes of MEBL, UBL, EFERT, ENGRO, ILP, LUCK, SYS before adding.

Courtesy – IMS Research