The Executive Board Meeting of IMF is expected to be held in Dec’23, in which approval of 1st review will pave the way for the disbursement of USD 700mn. Moreover, monetary policy announcement by the State Bank of Pakistan (SBP) is scheduled on 12th Dec’23. Both these events will notably impact the market’s momentum, deciding the market’s diRection.

The YoY headline inflation rate for Nov’23 is projected to be 28.2%, indicating an increase from the previous month, Oct’23, which reported a YoY increase of 26.9%. In the future, except for a potential spike in Dec’23 attributed to the base effect, the overall trend in inflation is anticipated to move downward. However, some risk factors to our projections include i) volatility in food and energy prices, ii) the prospect of another gas tariff adjustment in Jan’23, although of a lower magnitude and iii) the potential depreciation of the PKR against the USD.

The KSE-100 is currently trading at a PER of 4.1x (2024) compared to its 5-year average of 5.6x, offering a dividend yield of ~11.0% compared to its 5-year average of ~7.8%.

Our preferred stocks are OGDC, PPL, MARI, MCB, UBL, MEBL, LUCK, MLCF, ENGRO, FFC, HUBC, and INDU.

 Courtesy – AHL Research