April Review

The market ended a two month drought with a 2.4pc increase in the KSE100 up 1146pts to close at 49301. Average turnover was almost level with last month at 240mln shares while value traded was Rs12.9bln. The market retracted sharply from a weak performance during the start of the month to close strongly in the wake of the Panama Verdict, which did little to clear up the political impasse. 

Earnings season did not provide an impetus to further rally, with the 50000 level, breached briefly after announcement of Panama verdict. Overcoming this level still presents significant challenges.

The Auto sector significantly outperformed the market this month with INDU, PSMC and HCAR putting in 29, 43 and 23pc gains. PAEL, EPCL, SSGC and HASCOL rose, 28, 16, 20 and 25pc respectively. 

The fertilizer sector got a beating this month with major scrips declining by around 6pc. PRL declined by 10pc making it the worst performer among actively traded issues.

Outflow during the month picked up to USD 36mln up from 22.8mln last month. 

With the budget round the corner and political temperature rising in the aftermath of the Panama verdict, we expect the market to look for support at lower levels, with support coming in from the May inclusion of Pakistan in MSCI EM.