AKD STOCK SMART
Weekly Review
Lack of coherent policy direction to address the macro-economic woes continued to weigh on market performance, with KSE-100 index closing the week 0.6%WoW lower at 40,999pts. Also, NEPRA’s proposal to increase the electricity tariffs (which ECC later deferred until next week) dampened the market sentiment. Average daily trading volume slumped 19.9%WoW to 124mn shares during the week, where stocks leading the volume board were: 1) UNITY (43.8mn), 2) DCR (42.5mn), 3) TRG (36.5mn), 4) KEL (28.6mn) and 5) LOTCHEM (26.8mn). Wider news flows impacting the market during the week were: 1) FX reserves of the SBP continued to plunge to reach at US$9.04bn (down 3.1%WoW) - a level last seen before US$2bn was loaned out by China, 2) Pakistan and Russia signed a ‘memorandum of understanding’ on implementing US$10bn offshore gas pipeline project, 3) The government of Saudi Arabia signed grant agreement with Pakistan to finance three infrastructure and energy projects under the umbrella of CPEC, 4) International ratings agency Fitch estimated a slowdown in Pakistan’s GDP growth to 4.7%YoY in FY19 owing to external imbalance and monetary tightening, and 5) SBP highlighted that the factors such as external sector pressures, fiscal vulnerabilities, buildup of price pressure and volatile commodity market pose potential risk to financial stability. Performance leaders during the week were: 1) PIOC (3.2%WoW), 2) HBL (3.2%WoW), 3) POL (3.2%WoW), 3) PSMC (2.1%WoW), 4) NBP (2.0%WoW). On the flipside, laggards were: 1) ASTL (-8.9%WoW), 2) INDU (-6.3%WoW), 3) APL (-5.7%WoW), 4) DGKC (-4.4%WoW) and MLCF (-4.4%WoW). Foreigners continued to offload their stakes in domestic equities, with net outflow of US$9.43mn during the week.
Outlook
Delay in arranging sufficient financing inflows in the backdrop of sharp drawdown in country’s FX reserves (on average SBP reserves declining by US$297mn per week) is likely to keep the market sentiment under pressure. However, MPC is scheduled to announce MPS over the weekend where an aggressive stance should likely to keep the market heavy-weight banking sector in the limelight. Key results during the next week include LOADS, BYCO, NCL and SEARL.
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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