AKD Securities Limited – AKD Daily (October 03, 2022)

Karachi, October 03, 2022 (PPI-OT): Pakistan Market: Index remains steadfast

Marred by the political and economic uncertainty, the benchmark KSE-100 index shed ~2.9%MoM during Sep’22 to close at 41,128 points level. Consequently, the index has yielded negative returns in 4 out of last 5 months, which took the overall index performance during 1QFY23 to ~1%, while the overall index performance during CYTD stands at -7.8%.

The average daily volumes in the all share index clocked in at 254.8mn shares whereas the volume in the index clocked in at 93.6mn shares which means that majority of the participation continues to remain concentrated in the side items while the investors continue to shun the blue-chip stocks.

Changes atop finance ministry, where Ishaq Dar replaced the outgoing Miftah Ismail has instilled a new found confidence in the market which has not only seen the currency making a sharp rebound, while at the same time the market participation has also improved and the index has gained 500 points in the last week of the month.

Inflation reading during the outgoing month of Sept’22 surprised the street consensus on the lower side, clocking in at 23.2% as opposed to average estimates of ~26%. The market is likely to take this development positively and we may see index posting a sharp performance in the coming days.

Market direction will remain contingent on the developments on the economic and political front, consequently, a rapid appreciation in currency and positive news-flows related to fund flow after the arrival of new finance minister may keep market performance buoyant. AKD’s universe currently trades at the forward PER of 4.3x.