As 2023 approaches, it’s crucial to stay informed about potential investment opportunities in the Pakistan Stock Exchange (PSX). Despite the volatility of the market, savvy investors can still find profitable options. In this blog post, we’ll be discussing the top KSE100 stocks to invest in 2023 and how to navigate the market.
KSE 100 Index Target for 2023
Our projection for the KSE 100 index target in 2023 is at 47,640 points. This projection is based on an earnings growth rate of 12% and a dividend yield of 8%. Given the economic and political volatility in the market, we do not anticipate a re-rating of the index.
Top Five Stocks to Invest in 2023
Here are the top five stocks to consider for investment in 2023:
- Mari Petroleum (MARI) – Target price of PKR 2,658 per share with an upside of 87%. The company is expanding its exploration activities to enhance overall production flows, and it is largely insulated from the circular debt and offers a hedge against currency and oil prices.
- Meezan Bank (MEBL) – Target price of PKR 167 per share with an upside of 87%. The bank is expected to deliver strong financial performance and stability amidst the growing Islamic Banking Industry. It will continue to record higher returns in the future with an increase in interest rates.
- Attock Refinery (ATRL) – Target price of PKR 313 per share with an upside of 113%. The approval of a long-awaited refinery policy would be a key trigger for the company. Its focus on higher-margin products keeps it protected from a potential decrease in demand.
- The Hub Power (HUBC) – Target price of PKR 120 per share with an upside of 103%. The stock offers a long-term, profitable growth story. It generates revenue through multiple sources, including electricity production, coal mining, and energy exploration. The company has a strong market position and a wide customer base across Pakistan.
- Fauji Fertilizer (FFC) – Target price of PKR 135 per share with an upside of 35%. This stock provides protection against negative economic effects, steady cash flow, a strong return on investment through dividends, and income from various subsidiaries.
Risks and Opportunities in the PSX
While the PSX presents many opportunities, it’s essential to be aware of potential risks as well. One of the biggest risks in the PSX is the volatility of the economic and political landscape in Pakistan. As a result, the market may be bearish in the first half of 2023, with other asset classes taking precedence. However, as the economic cycle turns in the second half of 2023, equities may rerate.
Themes to look out for in 2023 include:
- Investing in the refinery sector, specifically Attock Refinery as our top pick;
- Investing in banks with strong asset quality and well-positioned loan book such as Meezan Bank;
- Investing in energy companies that benefit from USD-linked revenues such as MARI and HUBC;
- Considering building positions in companies that have recently announced buybacks such as ENGRO, LUCK, and BAFL.
Conclusion
In conclusion, with the right knowledge and analysis, you can make a lot of money with stocks. But remember, this is not just a game – make sure to do your research and follow our advice. If you have any questions about investing in 2023, feel free to contact us at info@kasb.com or get in touch with our customer support team through our live chat service at UAN 021-111-115-272.
