PSX: Market Review for the week

The KSE-100 index staged rally for the week, climbing 3.7% WoW, a rise of 1,444 points, and managed to breach the psychological barrier of 40k index points ending at 40,732 index points. This rally was mainly supported by: (i) upgrade in outlook for Pakistan from negative to stable by Moody’s investor services, (ii) a USD431mn WoW increase in Forex reserves held by SBP, and (iii) OPEC agreeing on greater than expected production cuts.

On the other hand, headline inflation was noted at 12.67%, above market consensus, owing to supply shock led price hike in perishable food items. However, weekly inflation depicted a decline that eased off concerns on continuity of the same trend. Market participation, resultantly, shored up during the week as evident by 34% and 31% WoW rise in ADTO and ADTV to 465mn shares and USD104mn, respectively.

Foreign investors were net buyers during the outgoing week (four days), accumulating positions worth USD1.4mn. Most of this was concentrated in fertilizers (USD6.9mn) and OMCs (USD2.2mn). On the flip side, foreign investors sold shares (net basis) worth USD3.6mn in the oil & gas exploration sector. Amongst domestic investors, individuals (USD18.5mn) and mutual funds (USD2.6mn) remained the most active buyers on net basis whereas banks took benefit of reviving sentiments and net sold equities worth USD19.4mn.


As macro indicators churn up favorable outlook, we expect the euphoria to continue with increasing focus towards value picks. Further, absence of noise on the political front and muted developments on the international front are expected to keep investor’s interest alive. We highlight our preference for value and growth scrips in the market with our top picks OGDC, PPL, MCB, BAFL, MEBL, FFC, LUCK, NML, LOTCHEM, and HUBC. (Courtesy: BMA Capital Management Ltd.

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