AHL Research expects the KSE-100 index to remain positive in the coming week. The Prime Minister has written a letter to roll over a USD 2bn loan to the UAE, which is scheduled to mature in the upcoming week. A successful rollover is expected to enhance Pakistan’s foreign reserve position and is expected to instil confidence among investors. Moreover, the scrips are trading at attractive valuations, and are expected to further boost positive sentiment at the index.

Our preferred stocks are OGDC, PPL, MARI, MCB, UBL, MEBL, FABL, HBL LUCK, MLCF, FCCL, FFC, HUBC, PSO and INDU. The KSE-100 is currently trading at a PER of 4.4x (2024) as compared to its 5-year average of 5.9x offering a dividend yield of ~10.3% as compared to its 5-year average of ~6.0%.

AKD Research while looking ahead, said that the upcoming election will continue to be in the limelight, and clarity on political uncertainties is expected to drive the market upward. Conversely, while any election delay may cause short-term market jitters, it is anticipated to eventually sustain its bullish momentum.

We advise clients to view any market fluctuations as opportunities to accumulate stocks of fundamentally strong companies, particularly those with high dividend yields. Overall, the energy and cement sectors are expected to remain in focus, given the anticipated amendments in the E&P policy and the decline in international coal prices to a 5-month low at US$96/ton.