EUR 12.20 For Business Accounts Only

AKD STOCK SMART

Despite oil rising to its 40-month high of ~US$73/bbl, the KSE-100 could not sustain the amnesty scheme-led rally, slipping -565.76pts (-1.21%WoW) to close at 46,071.86pts on the back of: 1) FATF/IMF raising concerns over the Tax-amnesty scheme aimed at bringing offshore assets back to Pakistan, 2) ADB becoming skeptical over Pakistan’s growth outlook in FY19 due to Balance of Payment constraints and 3) SC ordering silicosis centers to be set up at all cement factories across the country, leading to pressure on the cement sector. Average daily traded volumes for the week depressed to 247mn shares (-4.59%WoW) where main activity was witnessed in 1) KEL (95.67mn shares), 2) EPCL (75.49mn shares), 3) LOTCHEM (52.21mn shares), 4) FFL (47.68mn shares) and 5) AGL (44.3mn shares). Major news highlights during the week include: 1) power sector receivables crossing PkR805bn (+10.27%FYTD) for Jan 31’18 vs. PkR750bn of Jun 30’17, 2) Federal Cabinet ratifying the decision of Cabinet Committee on Privatization (CCoP) for issuance of National Security Certificate for sale of KES Power’s 66.4% shares in KEL, 3) exports/imports for Mar’18 rising 24%/5%, narrowing trade deficit 5%YoY to US$3.04bn for the month, 4) remittances growing 3.5% for 9MFY18 to US$14.6bn and 5) gov’t required to pay US$3.3bn in debt servicing by Jun’18, further weakening the Forex reserves. Outperformers of the AKD universe during the week included: 1) FFC (3.47%WoW), 2) KEL (2.89%WoW), 3) FFBL (2.04%WoW) , 4) PPL (0.90%WoW) and 5) EFERT (0.88%WoW) while the laggards were: 1) KAPCO (-8.07%WoW), 2) FCCL (-5.19%WoW), 3) DGKC (-4.65%WoW), 4) HBL (-4.48%WoW) and 5) CHCC (-4.37%WoW). Foreigners seemed to take advantage of the recent PkR/USD devaluations with consecutive third week of net inflows, flowing -in US$17.45mn for the week vs. US$3.62mn in the previous week.

 

Outlook

Investors look forward to upcoming results season starting next week (POL, NRL, ATRL, APL, BAHL, UBL, etc.) with special focus on companies that are to benefit from the PkR devaluation (E&Ps, Power and Textiles from our coverage Universe). That said, any pre-budget proposals can also direct the sentiments of market- players accordingly.