AKD Securities Limited – AKD Daily (03-05-2021)

Karachi, May 03, 2021 (PPI-OT): Pakistan Strategy Apr’21 – Intensifying COVID keeping market jittery

KSE-100 index continued to move downhill in Apr’21 to close at 44,262pts, down 0.7%MoM – marking the third consecutive month of negative performance. Surging COVID cases (double digit positivity rates and +100 daily deaths) and associated measures by Govt. dented investor confidence during the month.

Flow wise, foreigners continue to remain net seller with an outflow of US$17.0mn, taking cumulative net sell CYTD to US$33.4mn. On the local side, companies and mutual funds were on the selling side with net sell of US$12.7mn and US$4.4mn, respectively. On the other side of the spectrum, major buying activity emanated from ‘Other organizations’ with a net buy of US$20.5mn followed by Individuals with a net buy of US$7.0mn.

Market is likely to remain volatile in the short term with attention likely to be centered around, i) COVID third wave and consequent business disruptions, and ii) budget related news flow.

We advocate for sectors that fall on structural theme metrics where our preferred sectors are Cements, Steel, and Construction-Allied on construction theme, and Power and select-OMCs (PSO) on possible circular debt clearance.

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