AKD Securities Limited – Stock Smart (05-03-2021)

Karachi, March 05, 2021 (PPI-OT): Weekly Review

KSE – 100 closed at 45,837pts, down by a meagre 28pts or 0.06%WoW, after recording episodes of extreme volatility throughout the week primarily on back of political drama surrounding Senate elections. The market registered major uptick in initial half of the week owing to anticipations regarding the elections. However, the index went downhill following the news of PTI’s Minister for Finance and Revenue, Dr. Hafeez Sheikh being unsuccessful in his bid to become a senator from Islamabad, losing to the former Prime Minister Yousuf Raza Gillani, despite PTI emerging as the single largest party in Senate with 26 seats. Nevertheless, the market recovered on last trading day of the week due to positive sentiments driven by a swift move on the governments side where it vows to file a motion for ‘Vote of Confidence’ in Parliament on Saturday.

Other major news flows for the week included i) UN Secretary General and USA welcoming understanding between India and Pakistan for reducing cross-border tensions, hoping that this would pave the way for further talks between the two countries, ii) FBR surpassing 8MFY21 tax collection target by PkR13bn to cumulative tax collection of PkR2,911bn with downward revision in its tax collection target of PkR4,900bn to PkR4,700bn as part of agreement with IMF, iii) CPI recording an increase of 8.7%YoY in Feb’21, iv) exports registering a growth of 4.6%YoY to $16.3bn during 8MFY21, v) cement sales posting a growth of 14%YoY to 37.95mn tons in 8MFY21, vi) oil consumption rising 13%YoY to 12.67mn tons in 8MFY21 with Brent touching $64.45 a barrel during the week.

Flow wise, Foreigners remained net sellers during the week (net sell of US$10.66mn) together with Mutual Funds (net sell of US$9.37mn) and Companies (net sell of US$1.42mn) which was mainly absorbed by Insurance Companies (net buy of US$8.40mn) and Banks (net buy of US$7.98mn). Top performers for the week were, i) SNGP (+11.4%WoW), ii) KAPCO (+10.5%WoW), iii) ANL (+10.5%WoW), iv) INIL (+7.6%WoW), and v) GATI (+7.1%WoW) whereas laggards were, i) FML (-10.1%WoW), ii) STJT (-8.4%WoW), iii) HMM (-7.9%WoW), iv) SFL (-7.2%WoW), and v) PSX (-6.6%WoW).

Outlook

The market sentiments in the next week will be driven by outcome of ‘Vote of Confidence’ in Parliament that will provide much needed stability on the political front. Major corporate result announcements in the upcoming week include GLAXO, HASCOL and IGIL. With Senate chairman’s election scheduled on 12th Mar’21, the market is likely to remain volatile over the next week.

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