| Fund Name | AUM | No of Funds | Market Outlook for future |
| NBP Fund Management Limited | 170 bn | 43 | Positive |
| ABL Asset Management Limited | 77 bn | 30 | Positive |
| UBL Fund Managers Limited | 117 bn | 38 | Positive |
| Al Meezan Investment management limited | 161 bn | 33 | Positive |
| National Investment Trust limited | 89 bn | 15 | Positive |
Summary:
At present, the economy is facing unprecedented uncertainty. The ongoing Ukraine-Russia conflict has resulted in substantial increase in global commodity prices adversely affecting a net commodity importer country like Pakistan. The ongoing political tensions have taken a fresh turn with voting on the no confidence motion against the Prime Minister. Further, amid political chaos, talks with the IMF on the seventh review have been suspended. The Supreme Court ruling on the current political impasse will be critical for outlook on markets and economy.
However, with the benchmark KSE-100 index trading at a P/E of 4.9x, valuations already capture much of the aforesaid risks. For patient investors, potential catalysts should eventually unlock enormous value in the stock market.
While near term volatility cannot be ruled out, the fund managers of these companies continue to maintain a long term positive outlook on the equity market.
UBL Fund Managers Limited review:
The stock market exhibited considerable volatility during the month as rising domestic political uncertainty and macroeconomic concerns dampened foreign investor sentiments while extremely attractive valuations evoked domestic investor interest. The ongoing Ukraine-Russia conflict has resulted in substantial increase in global commodity prices adversely affecting a net commodity importer country like Pakistan. Going forward, we expect inflationary pressures to remain strong over the next few months due to elevated global commodity prices, a weakening rupee and expected sizable increase in administered local fuel and utility prices.
However, with the benchmark KSE-100 index trading at a P/E of 4.9x, valuations already capture much of the aforesaid risks. For patient investors, potential catalysts should eventually unlock enormous value in the stock market. We recommend our investors to invest in our equity funds as per their risk appetite and return expectations.
For instance, our UBL Asset Allocation Fund (UAAF) offers an appropriate strategy for investors with low to moderate risk tolerance. For those with higher risk tolerance and return expectations, we have UBL Stock Advantage Fund which offers pure exposure to the domestic equity market.
NBP Fund Management Limited Review:
Due to the Russia and Ukraine war, both the local and global equity markets were affected. Prices of several commodities were at record high levels because Russia was the major commodity supplier and the world scrambled to arrange for alternative supplies. Secondly, the rising political noise further increased uncertainty as several lawmakers decided to withdraw their support from PM Imran Khan.
During the month of March, Technology, chemicals, Fertilisers, Food and Personal care, Power Generation and Distribution, sectors outperformed the market. On the contrary, Auto assemblers , Cable and Electrical Goods , Engineering, Glass and Ceramics, Oil and Gas Exploration, Paper and Board and Refinery sectors lagged behind.
Although the economic outlook remains challenging due to the PKR devaluation, ongoing political uncertainty, and further monetary tightening, the current stock market valuations more than compensate for the risks highlighted. With the conclusion of Dec-21 results, listed corporate space has posted a record set of profitability, where cumulative profits are estimated to have grown by around 48% on a yearly basis. Therefore, we continue to look favourably towards the market in terms of return, whereby we expect the market to provide around 15-20% return.
ABL Asset Management Limited review:
During the month of March’22, politics remained the centre of attention as the vote of no confidence against the PM remained the highlight. Russia – Ukraine war continued as the world kept on increasing sanctions on Russia. Crude oil prices did taper off however still traded above the $100 mark throughout the month. PKR USD exchange rate kept creeping upwards and closed at 183.54 at month end. Core inflation measured as non-food non-energy surged by 8.9% in urban areas against 10.3% increase in rural areas.
Going ahead, inflation is expected to remain elevated due to higher prices of energy products in the international market backed by PKR devaluation against the US dollar.
The stock market increased by a meager 468 points (~1.05% MoM) and closed the month at 44,929 points. Average traded volume and value decreased by 14.29% MoM to 83mn and 10.83% MoM to USD 25mn, respectively. Although the month of March was a quite happening month loaded with a lot of foreign and local events, the KSE-100 index managed to remain range bound without any major impact.
Al Meezan Investment management limited review:
The market remained largely on the negative side during most part of the month due to submission of no confidence vote in National Assembly and resignation of Punjab CM.
Inflation rate came largely in line with market expectations. For the 9MFY22, CPI is up by 10.8% compared to 8.3% in the same period last year. The government has given a temporary relief by reducing petrol and diesel prices as well as power tariff.
Due to further rupee devaluation, tough measures to address structural flaws are needed to be taken, which will occur as soon as political uncertainty ends, which the market will take as a positive sign. Nonetheless, under the current elevated commodity cycle, Pakistan’s economy is expected to remain under pressure in the short term while the market P/E remains at an extremely attractive level of 4.6x compared to its long-term average P/E of 8.3x.
While near term volatility cannot be ruled out, we continue to maintain a long term positive outlook on the equity market. We encourage investors to enhance their long-term exposures to the equities at these levels.
National Investment Trust limited review:
The KMI-30 index managed to post a positive return for the month with selective buying in value stocks. Commodity prices also eased during the month after a significant increase, with coal falling to USD259/ton and WTI to USD101/bbl respectively, assisting the market's recovery. However, Political noise coupled with further deterioration in PKR against USD kept investors cautious. Monthly Average volumes continued their declining trend and stood at 205 million shares during the month, down 9% on a MoM basis.
Geopolitical turmoil vis a-vis the war in Ukraine continued to force foreign investors to exit equities markets globally, resulting in net outflow of USD 23.32 million during the month.
Political situation in the country coupled with macroeconomic indicators will determine the future course of the market. International geopolitical situation and commodities prices will also continue to have a bearing on the market.
