Expect the market to trade in a range amid the risk of interest rate hikes by 50-100 bps in the upcoming monetary policy by the end of November. Rising inflation and soaring current account deficit have opened up space for further rate hikes earlier than anticipated, keeping banks in the limelight.

Moreover, the government plans to end subsidised gas to industry, which will affect Fertilizer, Textile, Power and General Industries, which have installed Captive Power Plants (major cement). We would advise accumulation in Banks (UBl, HBl, BAFL), Tech (TRG, AVN), Textile (NML, ILP), Power (KAPCO), Chemicals (EPCL) and Autos (GHNI).

While commenting on the economic news in the media, the experts pointed out that Govt decided to increase wheat support prices to motivate farmers – a Positive development.

Discos’ domestic consumers, KE (Negative)

Govt to generate up to PKR250-300bn through Petroleum Levy (Neutral)

Weekly inflation up 0.67% due to rise in food prices (Negative)

Govt to end supply of subsidised gas to industry (Negative)

MoC to submit new textile and apparel policy to ECC (Neutral)

Pakistan receives new LNG bids at historic high rates (Negative)

Courtesy – Intermarket Securities Limited.