PSX still, Banking, Energy, and Fertilizer sectors present opportunities for accumulation – market advice for next week

AKD Research forecasts that PSX is poised to sustain a positive trajectory, although it can face deceleration in the bull rally. Our optimistic outlook finds support in robust Foreign Direct Investments (FDIs) and active market participation. Furthermore, upcoming elections hold pivotal significance, and their successful conclusion could further elevate investor confidence. We advise investors to retain long-term positions in companies with solid fundamentals while exercising prudence in dealing with fundamentally weak entities through a timely profit-taking approach. Moreover, companies with robust dividend yields, particularly in the Banking, Energy, and Fertilizer sectors, present opportunities for accumulation.

Simultaneously, AHL Research anticipates a sustained positive momentum in the forthcoming week. We also observe that stocks persist in trade at enticing valuations, potentially as an additional attraction for investors. 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) compared to its 5-year average of 5.9x, offering a dividend yield of ~10.1% compared to its 5-year average of ~6.0%.

Last week, PSX saw foreigner buying continue, clocking in at USD 13.1mn compared to a net buy of USD 9.6mn. Major buying was witnessed in All Other Sectors (USD 3.1mn) and Cement (USD 3.0mn). On the local front, selling was reported by Insurance Companies (USD 5.65mn) followed by Broker proprietary (USD 3.71mn). Average volumes arrived at 1,253mn shares (up by 22% WoW), while the average value traded settled at USD 107mn (down 10% WoW).

Other major news: i) ECP to announce polls schedule on Sunday, ii) Investors rush to buy long -term T -bills, iii) Crucial PC (Amendment) Ordinance promulgated, iv PTCL acknowledges Telenor Pakistan for $400mn and v) Rs302.63bn authorized for projects under PSDP.



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