AKD STOCK SMART
Weekly Review
With the commencement of its plenary meeting, FATF episode once again came into play with varying news flows setting market direction accordingly in the outgoing week. Losing 659pts on Monday ahead of plenary meeting, the benchmark KSE-100 index staged recovery on emerging clarity over Pakistan’s status in the FATF’s watch-list (being placed only in grey list, later confirmed by FO), with index closing the week at 41,911pts (up 0.66%WoW). Trading activity at the bourse marginally improved during the week, with avg. daily turnover increasing to 181.58mn shares (up 6%WoW). Key news flows impacting the market during the week included: 1) GoP notifying increase in profit margins of Oil Marketing Companies (OMCs) and dealers for HSD (+PkR0.26/liter) and MoGAS (+0.09/liter), 2) GoP reportedly raising PkR36bn in tax revenue under the amnesty program for undeclared local and foreign assets, 3) Gas utilities demanding an increase in their average prescribed prices for FY19 by PkR357/109/mmbtu (SNGP/SSGC) based on their revenue requirements, however, consumer gas prices will officially be hiked post gov’t notification, 4) Pakistan’s foreign exchange reserves falling 3.30%WoW to US$16.243bn during the week ended Jun 22’18 and 5). Performance wise, HASCOL (+9.31%WoW), KEL (+6.77%WoW), ASTL (6.64%WoW) and ABL (5.23%WoW) were major gainers in our AKD Universe, while laggards included: 1) CHCC (-7.40%WoW), 2) KAPCO (-5.74%WoW), 3) APL (-2.40%WoW and 4) PSMC (-2.36%WoW). Foreigners continued to offload equity stakes during the week, with net outflow of US$15.52mn compared to net outflow of US$24.53mn in the previous week.
Outlook
Post FATF’s official announcement (expected by Saturday 30th), we expect investors to once again shift focus towards more dominant economic (interest rate hikes, further devaluation prospects) and political (Accountability Court’s deadline to decide on the corruption references against Sharif family, 2018 National Polls) themes. Moreover, with start of new fiscal year, portfolio rebalancing by local funds could swing momentum accordingly.
AKD Research
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.
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