The year 2015 likely to be an action- packed year where we expect that CY15 would remain volatile for equity market. We anticipate Pakistan equity market to touch 37,100 points in CY15; thereby providing 15.5% ($14%) estimated gains. On the positive side we might see pre-announcement rally, receiving IMF payments, releasing of coalition support fund and improving country rating by international credit rating agencies. While law & order situation, lower revenue growth and higher fiscal deficit would restrict the gains. We expect global market and particularly crude oil prices would also drive the market on the other side but any downward trend in global equity market would dent the local market and sentiments.

 
Offshore investors & earning growth likely key triggers
We anticipate main triggers for the market would be foreign investments in equity market and earning growth of 11%. As we said that it would be a volatile year, likely rise in interest rate by Federal Reserve is likely to invite selling in global equity markets in 2QCY15.

Top Picks of 2015
By analyzing towards 2015, Pakistan Stock market is trading at a leading P/E multiple of 8.5. We believe investor would prefer selective stocks and re-rating of multiples would be on the cards. Furthermore dividend paying stocks would be in limelight due to lower interest rate scenario. Our top picks include LUCK, DGKC, MLCF, NML, HUBC, APL, ENGRO & UBL. However, Pak Elektron Limited (PAEL) is not included in AZEE Universe but improving fundaments warrants attention for investors.

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