In the last trading session we witnessed strong sell of pressure – though going forward we are expecting pressure likely to continue..
We believe that market will face pressure with respect to ongoing political turbulence will deter the investors/traders sentiments and market will likely to perform sluggish. On the other hand rising Covid_19 cases and partial lockdown in different cities fueling the concerns over govt. strategies to curb this pressure.
As per IMF demand Govt. has showed clear intentions to make State Bank of Pakistan (SBP) – Autonomous body which will be free from any political influence and make rational & sound decision within the capacity of international practices. However, oppositions took this matter on a negative note and start chanting that this would have a most serious negative impact on overall economy. Therefore, we are viewing that market will also get some heat from this stance of opposition and may investors pull-out money to avoid any capital loss from this fear.
Furthermore, IMF also required to withdraw corporate tax exemptions from several corporates to generate a tax cashflows going forward – as per media sources nearly PkR 70 – 140bn cashflows generation. In addition to that, Govt. also giving free hand to state enterprises from ministries influences to make them work efficiency without any pressure.
Economic front will remain same and there would not be any hefty change likely to happen – the predictive trend of Pakistan Equity Market would be bearish to neutral, though we suggest you to “Sell on Strength” would be viable decision.