Many institutional investors are worried about the lack of volumes in KSE 100, however as far as levels are concerned I think they are very attractive for small investor who can accumulate many cheap stocks. Volumes is a problem of large investors and not small investors.
As market is hovering around 13,500-13600 level, there are many stocks availabe with attractive dividend yield. I would like to briefly discuss just two of them, HUBCO and KAPCO.
HUBCO:
Price: 37
Dividend: 5
Dividend yield: 13.5%
Target Price: 45
Upside: 22%
Total Return: 35%
KAPCO:
Price: 42
Dividend: 6
Dividend yield: 14.28%
Target Price: 54
Upside: 28%
Total Return: 32%
As you can see how attractive the dividend yield is. So even if because of some unexpected reasons on the political or economical front the share prices of HUBCO and KAPCO do not appreciate you can still get a decent cash return of 13%-14%. In a country of power shortage what can be more good than investing in power companies.
As I have described in my last few posts, market levels are not that important at this moment of time, what is more important is that you invest in right shares. Besides these two shares I am also recommending following shares as well:
1. Attock Refinery (ATRL)
2. Pakistan State Oil (PSO)
3. Attock Petroleum (APL)
4. Engro
5. Fauji Fertilizer (FFC)
6. Pakistan Petroleum (PPL)
Good Luck with your investments!
