Upbeat economic data offers upside potential at PSX this December

December 3, 2020 (MLN): Following the global markets, Pakistan Stock Market rallied in November on three effective COVID-19 vaccine announcements, setting the stage for a more rapid economic recovery next year.

With the ambition to make investors know its stance of the capital market for December, JS Global held a webinar today on ‘Market Monthly Outlook’ wherein its research analysts discussed the upside and downside risks to stocks.

Many of the sectors which have been hit hard due to lockdown amid pandemic- Auto, Cement, Steel - have shown much recovery or gains on the back of encouraging economic climate and lower international crude oil prices. 

Over the past several months, the KSE-100 index has been trading in a range of 38k to 42k. It is expected that any sharp jump can break the established range.

As per JS Global research analyst, there are high- upside opportunities available for investors in Cement, Steel, Auto, Banks, and some selected refineries.

Talking about the outlook of refineries, JS Global believes that the exchange and inventory losses will be reduced going forward as the environment is helpful for the growth of refineries wherein National Refinery Limited (NRL) has been suggested a compelling growth stock on the board.

The other growth stocks to buy are Bank Al Habib and United Bank Limited (UBL), according to JS Global Capital while Cherat Cement was also the pick.

Moreover, it is expected that IMF conditionality will have a positive impact on the financial market.

While the capital market has maintained several positive elements, in view of JS Global, there is increased uncertainty regarding the resurgence of COVID-19 cases, raising risks as the reimposition of lockdown may reverse the long-term positives. In addition, the efficacy of the vaccine after the rollout is something where all eyes are on.

Further, the markets are expected to look for another risk regarding Pakistan Democratic Movement (PDM) rallies.

JS Global apprised that solution of the monster of Circular Debt will be the biggest positive trigger for the capital markets.

The global political risks due to Iran-Israel tension cannot be ignored, JS Global concluded.

Copyright Mettis Link News