AKD Securities Limited

AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.

AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.

Analysts

  • Ali Asghar Poonawala

    Sr. Investment Analyst
  • Team AKD Research

    Investment Analyst
  • Umer Farooq

    Investment Analyst
  • Hamza Kamal

    Sr. Investment Analyst
  • Usman Zahid

    Director Research
  • Ailia Naeem

    Sr. Investment Analyst
  • Shahrukh Saleem

    N/A

MEBL_Natural antibodies to counter headwinds, (AKD Daily, May 29, 2020)

AKD Daily MEBL: Natural antibodies to counter headwinds Branch additions (159 branches added in the past two years), non-linkage of deposit cost to policy rate, and Govt.’s intent to tap Islamic banking resources to raise financing (PkR750bn Ijarah Sukuks targeted, PkR200bn Power Sukuk II bidding complete) should buttress MEBL’s bottom-line from steep decline in interest rates over the medium run. Smoothening of possible provisioning costs (PkR1bn general provision booked in Mar’20) in lieu of underline risks from COVID-19 and expiry of SBP relief period provide confidence on the future ...

Pakistan Fertilizer_Subsidy expected to normalize inventory, (AKD Daily, May 28, 2020)

AKD DailyAKD DailyPakistan Fertilizer: Subsidy expected to normalize inventory• As per the data released by NFDC, urea offtake for Apr’20 declined by 20/17% MoM/YoY to 242K tons. The sequential decline in numbers was witnessed industrywide (except for EFERT), in anticipation of Fertilizer subsidy announcement.• The overall urea offtake in 4MCY20 clocked in at 1.2mn tons, down 23% YoY. Staggered decline in urea prices (EFERT delayed pass-on of GIDC elimination benefit) throughout the 1QCY20 coupled with subsidy in the offing led to famers delaying fertilizer purchase.  • Urea inventory has incr...

Pakistan OMCs: Tough time to grow (AKD Daily, May 19, 2020)

Depressed volumes directly softened throughput levels, with 1QCY20 retail volumes at 3.SHEL/APL/PSO delivered throughput levels of 574/490k/523k/0mn tons, down 21%QoQ largely due to a 32%QoQ decrease in HSD, owing to players limiting product in storage to mitigate against fluctuating oil prices and COVID-19 containment restrictions put in place during the period Company-wise, HASCOL/402k ltrs/outlet, moving -17.7%/-12.6%/-17.6%/-26.0%QoQ and -39.8%/-20.9%/-17.7%/-11.7%YoY taking total average industry throughput -22.5%QoQ/-19.4%YoY to 463K lts/outlet. Sectoral demand figures indicate the has...

Pakistan Economy: SBP moving along the curve, (AKD Daily, May 18, 2020)

The MPC of the SBP delivered yet another 100bps rate cut (5.5% cumulative cut since March’20), citing improved inflation outlook following May’20 steep reduction in the Gov’t administered fuel prices (~20%) and countering COVID-19 containment spillovers by enhancing liquidity support to keep businesses afloat. This bold move from the central bank underscores two important points, namely, the economic pain of COVID-19 and resulting health challenge may be more adverse than earlier expected. Secondly and arguably of greater heft, the IMF is more accommodative than usual, seconding much-needed s...

Pakistan Economy_MPC faces a tough choice, expect 50bps rate cut , (AKD Daily, May 14, 2020)

The MPC of the SBP - scheduled to meet on Friday, 15th May 2020 – faces a dilemma, with a need to strike balance between providing immediate relief to the economy and preserving macro stability over the medium term. On one hand, the inflationary backdrop is benign (~6.8%YoY over the next six months), with corona induced decline in consumption and consequently commodity prices, along with scrapping of utility adjustments, translating into steep decline in inflation readings. This coupled with a need to kick-start the economy or at least alleviate debt servicing burden merits further easing ac...

Team AKD Research

AKD STOCK SMART

Faltering under mounting macro risks and pressured by significant headline risks, the KSE-100 index continued its FYTD tumble, slipping 7.1%WoW to close at 29,429pts, dropping below the physcological 30K mark after a span of five years. Key news flows during the week included: 1) to avoid US$30mn penalty under Take or Pay mechanism and reduce the volume of demurrages, the GoP has minimized FO and coal based power generation to ensure maximum intake of RLNG, 2) FBR announced that it will not take any adverse action against traders on the condition of provision of CNIC numbers till September 30,...

Ali Asghar Poonawala ...
  • Hamza Kamal

Pakistan Strategy_ Perfect storm of risks clouds fundamentals

Week to date decline of 6.1% cover a period of depressed price performance for stocks, with volumes and returns closely resembling FY08-09, a period of record weakness in equity market performance, highlighting the multi-faceted nature of the prevailing market sell-off We segment news reports and policy actions during the year into macro and sectoral items, while underlining the broad pressures at play on both fronts forcing investors to hunker down, refrain from building fresh positions and induce outflows from institutional investors Guiding market sentiment, these developments have broadl...

Team AKD Research

Pakistan Commodities_July’19 Signals prolonged deceleration

  Global economic growth entered a late-cycle slowdown in the outgoing month, as US China trade tensions creeped into consumer and business confidence while global trade metrics (CPB World Trade monitor slowing from Oct’18 onwards) deteriorated at their fastest pace since the Global Financial Crisis. Signaling weakness in global economic outlook, the US Fed cut its policy rate, it’s first since 2008, signaling the precautionary commencement of a new round of global monetary easing (followed recently by India, Thailand and New Zealand), while steeper inversion in US bond markets illustrate...

Team AKD Research

Pakistan Commodities: Risk of slowdown aggravates global markets

Amidst the continued easing of global economic activity, looming threats of tariffs and most leading indicators of consumer/producer confidence softening, extending volatility to global commodity markets where the TRJ Commodity index moved +3.3%MoM but remaining lower by -9.6%YoY. The most direct impact of trade tensions yet was witnessed in slowing PMI numbers from China, India, Germany, while a downturn in consumer confidence readings from the US indicate significant spillovers from a potential trade tussle between the US and Chine, where on the flipside, ASEAN nations witnessed significant...

Team AKD Research

Pakistan Commodities: Global commodities witnessing mixed trends,

Global commodities printed a mixed trend where a host of factors including slow demand growth in China and tight supply conditions in oil market contributed to the cause. Resultantly, TRJ Commodities Index remained flat with a change of -0.7%. Energy commodities were led by rising crude prices (Arab Light/Brent was up 7.0/6.4% MoM) as US State Department decided against extension waiver on imports from Iran, while Richard's Bay coal prices dipped 12.95%MoM with weak imports from China proving to be a major dampener. Amongst soft commodities, the FAO food price index climbed 1.8%MoM gaining ...

Pakistan Economy: Drastic measures make for an unruly quarter

Headline inflation continues its upward trajectory, with the upcoming Jun'19 reading expected to touch a multi-year high of 9.65%YoY vs. 9.11%YoY in the preceding month and 5.21%YoY in Jun'18. Sequentially, the consumer price index is likely to go up by 1.06%MoM. Inflationary pressures are primarily stemming from i) rising food prices (food index: up 1.77%MoM), ii) higher retail fuel prices pushed by PkR weakness (transport index: up 1.86%MoM) and iii) general price hike in certain categories (i.e. tobacco & sugar) in anticipation of FY20 budget. With macro-adjustments (i.e. both in fiscal a...

Team AKD Research

Pakistan Strategy: Another round on the IMF rollercoaster

Sticking with the trend established in previous programs, the release highlighted some structural benchmarks, namely: 1) Budget FY20 aims to limit primary deficit to 0.6% of GDP, 2) support autonomy of SBP to continue stabilization measures, 3) improve tax collections, administration and modernization of public finance management framework, and 4) long term goals of continued stability measures enacted prior to this program, accompanied by moves to maintain institutional autonomy. Confirming the much-awaited staff-level agreement, the IMF in a press release issued yesterday laid out the ‘bare...

Ali Asghar Poonawala

OMCs_1QCY18 Retail Operations Update

Transportations sector demand continues to remain firmly in the driver seat for OMC volumes, as power sector demand takes the long spiral down (secular, gradual decline in FO sales, where we expect FY19-21F sales declining at CAGR of 21%). Throughput calculations suggest an uptrend in retail volumes moved, where the industry's average quarterly volume sales per outlet stood at 828.6K ltrs/outlet (+18%QoQ/+10%YoY). Daily average throughput per retail output clocked at 9,207ltrs/day where 10.3%YoY climb drives home the growth of supply chain and storage to buttress growing retail POL volumes. HA...

Pakistan Economy: Growth remains on track

Based on provisional PBS data for 8MFY18, the GoP expects GDP growth for FY18E to settle at 5.8%YoY crossing the 11 year high-watermark for growth vs 5.4%YoY (revised upwards) in FY17A. Key catalysts for growth remain ongoing implementation of early harvest infrastructure projects under the ambit of CPEC, net energy supply growth (net generated units up 11.3%YoY for 8MFY18), and sustained credit uptick (8MFY18 private sector credit stock grew 9.9% since Jun’17, adding PkR391.3bn offtake during the period increasing 8.3%YoY). Ancillary support factors including contained law and order situation...

Pakistan Economy: Rupee depreciation is a blessing in disguise

The Rupee depreciated another 4.4% against the greenback yesterday with interbank rate ending at PkR115.5/US$ reflecting existing pressures on the external front and central bank's reserves declining to US$12.13bn (down US$1.98bn CYTD; import cover: 2.69x). With regards to the external sector, as per latest data 8MFY18 CAD surged to its highest level ever at US$10.83bn (up 50.3%YoY) vs US$7.22bn in 8MFY17. While devaluation is likely to ease off pressures on external account in the long run (weaker rupee shall restore export competitiveness apart from impeding import growth), CAD at such high ...

MEBL_Natural antibodies to counter headwinds, (AKD Daily, May 29, 2020)

AKD Daily MEBL: Natural antibodies to counter headwinds Branch additions (159 branches added in the past two years), non-linkage of deposit cost to policy rate, and Govt.’s intent to tap Islamic banking resources to raise financing (PkR750bn Ijarah Sukuks targeted, PkR200bn Power Sukuk II bidding complete) should buttress MEBL’s bottom-line from steep decline in interest rates over the medium run. Smoothening of possible provisioning costs (PkR1bn general provision booked in Mar’20) in lieu of underline risks from COVID-19 and expiry of SBP relief period provide confidence on the future ...

Pakistan Fertilizer_Subsidy expected to normalize inventory, (AKD Daily, May 28, 2020)

AKD DailyAKD DailyPakistan Fertilizer: Subsidy expected to normalize inventory• As per the data released by NFDC, urea offtake for Apr’20 declined by 20/17% MoM/YoY to 242K tons. The sequential decline in numbers was witnessed industrywide (except for EFERT), in anticipation of Fertilizer subsidy announcement.• The overall urea offtake in 4MCY20 clocked in at 1.2mn tons, down 23% YoY. Staggered decline in urea prices (EFERT delayed pass-on of GIDC elimination benefit) throughout the 1QCY20 coupled with subsidy in the offing led to famers delaying fertilizer purchase.  • Urea inventory has incr...

Pakistan OMCs: Tough time to grow (AKD Daily, May 19, 2020)

Depressed volumes directly softened throughput levels, with 1QCY20 retail volumes at 3.SHEL/APL/PSO delivered throughput levels of 574/490k/523k/0mn tons, down 21%QoQ largely due to a 32%QoQ decrease in HSD, owing to players limiting product in storage to mitigate against fluctuating oil prices and COVID-19 containment restrictions put in place during the period Company-wise, HASCOL/402k ltrs/outlet, moving -17.7%/-12.6%/-17.6%/-26.0%QoQ and -39.8%/-20.9%/-17.7%/-11.7%YoY taking total average industry throughput -22.5%QoQ/-19.4%YoY to 463K lts/outlet. Sectoral demand figures indicate the has...

Pakistan Economy: SBP moving along the curve, (AKD Daily, May 18, 2020)

The MPC of the SBP delivered yet another 100bps rate cut (5.5% cumulative cut since March’20), citing improved inflation outlook following May’20 steep reduction in the Gov’t administered fuel prices (~20%) and countering COVID-19 containment spillovers by enhancing liquidity support to keep businesses afloat. This bold move from the central bank underscores two important points, namely, the economic pain of COVID-19 and resulting health challenge may be more adverse than earlier expected. Secondly and arguably of greater heft, the IMF is more accommodative than usual, seconding much-needed s...

Pakistan Economy: MPC faces a tough choice, expect 50bps rate cut , (AKD Daily, May 14, 2020)

The MPC of the SBP - scheduled to meet on Friday, 15th May 2020 – faces a dilemma, with a need to strike balance between providing immediate relief to the economy and preserving macro stability over the medium term. On one hand, the inflationary backdrop is benign (~6.8%YoY over the next six months), with corona induced decline in consumption and consequently commodity prices, along with scrapping of utility adjustments, translating into steep decline in inflation readings. This coupled with a need to kick-start the economy or at least alleviate debt servicing burden merits further easing ac...

Pakistan Economy_MPC faces a tough choice, expect 50bps rate cut , (AKD Daily, May 14, 2020)

The MPC of the SBP - scheduled to meet on Friday, 15th May 2020 – faces a dilemma, with a need to strike balance between providing immediate relief to the economy and preserving macro stability over the medium term. On one hand, the inflationary backdrop is benign (~6.8%YoY over the next six months), with corona induced decline in consumption and consequently commodity prices, along with scrapping of utility adjustments, translating into steep decline in inflation readings. This coupled with a need to kick-start the economy or at least alleviate debt servicing burden merits further easing ac...

Pakistan Economy: Current Account gives a green light to Macro Consolidation

Latest SBP data on external account show marked improvement in the current account balance, with the country running a current account surplus of US$99mn in Oct’19 after 49months compared to CAD of US$284mn in the preceding month and US$1,280mn in Oct’18. Encouragingly, unlike the past few months where YoY deficit reduction was primarily import led, the Oct’19 improvement in current account balance was driven both by i) export growth (+10%YoY) and ii) import contraction (-21%YoY). While the current account balance improved sequentially (CA surplus of US$99mn in Oct’19 vs. CA deficit of US$...

Shahrukh Saleem

Pakistan OMCs: Much ado about margins,(AKD Daily, Nov 11, 2019)

After a delay of five months, Economic Coordination Committee (ECC) finally accorded approval to revision in OMC margins, setting them at PkR2.81/liter for MS and HSD for rest of FY20 (effective Dec’19) — increasing by 6.4%. Margin revision did not compensate OMCs for the delay where we had already incorporated margins of PkR2.77/liter for FY20 vs. now applicable weighted average margins of PkR2.74 resting lower than our estimates, pruning earnings of PSO/APL by 1.5/1% (avg. FY20-22). Though chances of passing the proposal for incorporation of exchange losses into the pricing mechanism remai...

Team AKD Research

AKD STOCK SMART, Nov 08, 2019

Index continued the momentum gained towards the end of last week and started the week on a strong footing, increasing by ~900 points in first trading session, supported by declining yields in the PIB auction held last week while additional stimulus was provided by easing tensions on the political front between government and opposition. Moreover, encouraging numbers clocked in for external account which provided further support. The enthusiasm based on aforesaid factors was carried for the whole week as index closed all 5 trading days of the week in green. KSE-100 closed the week at 35,978pts,...

Team AKD Research

Pakistan Strategy: Risk appetite, not fundamentals driving performance,

Confronting a slew of macro, peripheral and political shocks to continue its climb, the KSE-100 index has risen 4% during the last five trading sessions taking returns from Aug’16 (CYTD low) onward to 24% Isolating sectoral performance CYTD we highlight the role of side-stocks and sectoral plays in driving market performance, where further comparison to CYTD market low (Aug 16th) highlights the role played by off-board sectors (Refinery/Transport/Sugar were up 50/32/15%) favored by retail investors, where improved risk appetite played a greater role than improved fundamentals Conducive pol...

Ali Asghar Poonawala ...
  • Hamza Kamal

Pakistan Strategy: Trigger-hungry market awaits direction, (AKD Daily, Oct 01, 2019)

Reversing persistent pressures on equity benchmarks, Sept’19 ended on an upswing with the KSE-100/All index pulling back by +8.1/+6.5%MoM where impetus for returns originated from furthered expectations of monetary cycle peaking and corporate earnings announcement kept activity levels higher (KSE-100/All volumes avg, +3.9/0.4%MoM). Foreign portfolio investors remained net sellers, offloading US$3.5mn in positions during the month, with net buys centered on Fertilizers (US$2.7mn) and Oil & Gas exploration (US$0.5mn), moderated by domestic participants, with individual investor (US$6.1mn) and o...

Team AKD Research

AKD STOCK SMART,

Market remained lackluster during the week, influenced by lack of participation and no significant trigger, closing the week at 33,672pts, down 1.5%WoW. During the week, average daily turnover declined to 51mn shares, down 41% WoW while on Thursday, market witnessed second lowest volumes of 5 years (~40mn shares). Increase in fertilizer prices created some positive sentiment in the sector and brought it amongst the top performers while majority of other sectors remained dreary – in-line with the overall sentiment. Key news flows during the week included: 1) State Bank of Pakistan (SBP) receivi...

Team AKD Research

AKD STOCK SMART

Weekly Review                                 Managing to hold back gains made during the beginning of the week, the KSE-100 index closed at 34,190 pts rising 288pts ending the first week of FY20 up 0.9%WoW. Additionally, the drastic weakness in volumes (down 40.9%WoW to average 86.6mn shares) over the week was particularly indicative of investor apathy. With approval from the IMF executive board for the proposed US$~6bn EFF external financing support over the next three years (accompanied by release of US$1bn), investor sentiment see-sawed as regulatory action to curb un-registered transact...

Team AKD Research

Pakistan Strategy: FY19 closes with more questions than answers,

A mediocre June'19 brought FY20 to close on shaky ground (KSE-100/All indices slipped 19.1/18.3%YoY), showcasing the worst equity market performance in a decade, while volumes compressed and a flight to blue-chip KSE-100 mainboard plays gathered steam. 4QFY19 witnessed the KSE-100/All indices posting declines of 11.6/10.8%QoQ, their worst showing since 2QFY09 (-36/-34%QoQ for KSE-100/All) as growing uncertainty over the operational outlook for ancillary sectors furthered investor preference for mainboard stocks, as individual investor participation remained the only plus point in an otherwis...

Team AKD Research

AKD STOCK SMART

Weekly Review                                 Continuing with previous week’s trend, KSE-100 index lost another 3.5%WoW to close at 33,902pts. Apart from the regulatory tightening that has been the dominant factor hurting market performance for the past weeks, i) fiscal year-end phenomena (where historically market has remained under pressure), ii) exchange rate volatility (PkR/USD touched a high of 163.5 before closing at 159.5), and iii) revision in gas prices (up to 191%), impacted weekly performance. Concerns over tail risks have overshadowed the positives including the  US$3bn commitmen...

Team AKD Research

HBL_Attractive valuations call for accumulation

HBL's 1HCY17 earnings were down 3%YoY on spread compression, credit quality infection an higher expenses (tax and otherwise). Pick up in advances was the key highlight where materialization of CPEC investments led 11.2%YoY growth in loans. Corporate book continues to form the major chunk, however HBL is also keenly building on its consumer portfolio which while accretive to margins can lead to higher domestic NPLs. This together with continued pressure on NIMs at least until CY18F when interest rates are expected to reverse, has led us to revise down our CY17F/CY18F earnings estimates by 5%/7%...

Team AKD Research

ENGRO_1HCY17 Analyst Briefing Notes

ENGRO held its analyst briefing on Friday (Aug 18'17) to discuss its 1HCY17 earnings performance. To recall, ENGRO announced consolidated/unconsolidated NPAT of PkR3.78bn/PkR4.10bn (EPS: PkR7.21/PkR7.84) in 1HCY17, down 32%YoY/79%YoY. Key highlights of 1HCY17 consolidated result included: 1) weakening topline (down 22%YoY) due to classification of EFOODS as associates (post its partial divestment) despite 23%YoY/17% jump in EFERT/EPCL topline and 2) significantly higher effective tax rate of 64% in 2QCY17 vs. 40% in 2QCY16 on account of retrospective provisioning of ~PkR2.1bn super tax in this...

Team AKD Research

NML_Fundamentals remain intact

​Based on its continued focus on value added segment and higher expected payout from portfolio companies, NML (TP: PkR185.3/sh, upside: 23.7%) remains our preferred play in the sector. Benefitting from its garment capacity expansion, NML registered 38%YoY sales growth in garment segment in 9MFY17, where we expect this trend to continue and support topline growth (FY18F: 11%YoY) despite declining trend in non-value added sales. In addition, textile export package (FY17/FY18F incremental EPS: PkR2.35/PkR6.5/sh) and healthy payout from associated companies (FY17/FY18F: +12%/+5%YoY) are likely to ...

Team AKD Research

Budget FY18_Proposals and Implications

​The incumbent government is due to present its last federal budget on May 26'17 where we expect the government to move ahead with its growth agenda. Setting an ambitious GDP growth target of 6% in FY18F, the GoP is likely to enhance its development expenditure primarily making its case on uptick in CPEC led activity, with news flows suggesting federal PSDP allocation at PkR1,001bn vs. PkR800bn in FY17B. However, fiscal constraints will remain in play where higher tax collection is likely to be supported by increase in duties and continued penalization for non-filers. For capital market, incom...

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