*Chase Securities* *What You Should Know Today* *07th February, 2025* *Key Headlines* 1. FTA (Phase-II); Pakistan, China agree to deepen trade liberalization 2. Pakistan’s total foreign exchange reserves exceed $16b 3. LNG deal with Qatar to be renegotiated 4. First half of 2025, closure likely for Telenor’s PTCL acquisition 5. PM orders swift privatisation of govt depts 6. Oil set for third straight weekly drop on tariff fears *Market Outlook: An Opportunity, Not a Bloodbath* While some may describe the recent market decline as a "bloodbath," a broader perspective suggests otherwise. The market has corrected 7% from its recent high, which is a normal pullback in any bullish cycle. However, certain blue-chip stocks have declined between 10% and 20%, presenting attractive entry points. Despite this correction, the broader economic outlook remains strong, with stable FX reserves, a current account surplus, low single-digit inflation, abundant market liquidity, and encouraging corporate earnings. Additionally, while interest rates have yet to bottom out, the upcoming MSCI review next week could serve as another catalyst. Such corrections have occurred multiple times in previous rallies and do not change the market’s overall direction. Among key sectors, E&P, OMC, and gas utilities have seen a meaningful correction, yet their long-term fundamentals remain intact. The circular debt situation is improving, the Reko Diq transaction remains on track, and the government continues to push for energy sector reforms. As a result, OGDC and PPL are now trading at 4x-4.25x P/E, while PSO is at 4.3x P/E, despite material improvements in their cash flows and circular debt positions. Similarly, the auto and auto parts sector is expected to remain in focus this year. New model launches by major automakers and a recovery in auto sales from their bottom levels will keep investor interest high. Our detailed report on LOADS Limited, published yesterday, highlights the company as a strong proxy for the auto sector, given its role as a key parts supplier to leading automakers. Overall, the recent correction should be viewed as an opportunity to build positions, rather than a cause for concern. With strong macroeconomic indicators, attractive stock valuations, and upcoming market triggers, the market outlook remains positive. *Top Picks* OGDC, PPL, PSO, UBL, MEBL, BAFL, FFC, FATIMA, CHCC, MLCF, DGKC, SAZEW, GHNI, ATLH, AGTL, INDU, ISL, ASL, PSX, LOADS, COLG, GCIL, PAKT, IMAGE, SPEL, HUMNL, TGL, GHGL *Important Board Meetings Today* EFERT, STCL, SNBL, SPEL, Meezan Funds- Corporate Results ASTL- Other Matters *Corporate Briefing* N/A *Start of Ex-Price today* N/A *Last Day of Entitlement* BWHL- 60% Dividend