June 9, 2021 (MLN): Potential investors extract clues to gauge the Stock Market Outlook on the basis of the economic indicators’ performance as the equity market is fairly responsive to these moves.
In other words, previous macroeconomic happenings largely paint the market outlook and help investors to make decisions for the future.
To recall, the fiscal year 2021 started on a depressing note as investors were figuring the way out of the unstable situation of Covid-19. But later on, government’s measures for providing relief to the business sector and improvement in several economic indicators boosted up the confidence of investors.
Therefore, it is pertinent to mention that moving towards a new year, investors must keep both the highs and lows- a wild ride of FY21 in their mind.
With regards to this, JS Global conducted a webinar yesterday to present the “Stock Market Monthly Outlook” which noted the following:
Given the target of petroleum levy for the FY22 and international rising oil prices will likely continue the pressure on inflation numbers which will ultimately fuel the selling pressure across the local bourse.
Meanwhile, the inconclusive talks between Pakistan and the IMF have left the investors in an uncertain situation. In addition, the surging prices in the international commodity market will likely hit the margins of local companies in the bourse.
During the previous months, the market witnessed positive sentiments on the back of resumed economic activities after lifting the lockdown situation. However, the spread of new Delta Variant will likely take the economy towards widespread lockdowns which would keep the market consolidated.
Nonetheless, the economy has witnessed a significant improvement in several economic indicators which led to a growth of 3.9%.
With respect to the power sector, the IPPs will likely announce healthy dividends in a month to come. Given the performance of the banking sector for the past few months, there is a huge room for improvement and the sector might post good numbers.
No doubt OMCs performed well in the previous months however, the stance of JS Global is neutral for this sector given the global hike in prices. In addition, companies operating under the segment of fertilizer will remain in consolidation.
LUCK, ADAMJEE and ENGRO will remain in the limelight in upcoming days/months.
All in all, the market is quite attractive for the potential investors in the long term given the business-friendly policies specially the incentives provided under the newly announced budget for FY22.
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