AKD STOCK SMART
StockSmart
Weekly Review
Having lost 911.5pts in the first 4 trading days, Shahbaz Sharif’s arrest by NAB in the Ashiana Housing case on Friday afternoon came as a final nail in the coffin (hard blow to investor sentiments), with KSE-100 index losing another 860.8pts to close the week at 39,226pts, down 4.32%WoW. Deferment of electricity rate hike and lack of direction on potential entry in to the IMF program kept trading activity suppressed, shrinking average trading volumes to 113.5mn shares as compared with 124.4mn shares in the previous week. Stocks garnering highest volumes included 1) UNITY (46.02mn), 2) BOP (40.42mn), 3) TRG (32.55mn), 4) FFL (22.28mn) and 5) DOL (20.63mn) reflecting investor interest in side stocks. More importantly, banking sector scrips failed to attract volumes despite a 100bps interest rate hike by SBP in its last monetary policy. Other news flows during the week were: 1) IMF stressing upon more stringent measures including further currency devaluation, interest rate hikes, revenue collection measures and reforms in the PSEs during its article IV consultations with Pakistani authorities, 2) Saudi Arabia’s increasing interest to invest in Pakistan with an MoU signed for the establishment of 500kbpd oil refinery at Gwadar in partnership with PSO, 3) GoP once again imposing a ban on purchase of automobiles and property by non-filers, 4) OGRA notifying hike in gas rates by ~30-40% for different industrial consumers effective Sep 27’18 and 5) a sharp drop of US$627mn in SBP reserves due to external debt financing. Except for HASCOL (+0.05%WoW), no other stock in our coverage universe closed the week in green where losers included: 1) DGKC (-11.67%WoW), 2) MLCF (-10.89%WoW), 3) ASTL (-9.92%WoW), 4) INDU (-9.29%WoW) and 5) PSO (-7.8%WoW). Foreigners dumped US$8.42mn worth of equities in the outgoing week, marking its 23rd week of outflows.
Outlook
While medium term triggers are centered around policy initiatives to be taken by the GoP, key macro events to look for in the upcoming week include 1) development over NAB proceedings in the Ashiana Housing scheme as various statements hint towards more high profile arrests to follow up and 2) possible clarity over external financing as Finance Minister Asad Umer is expected to attend IMF/World Bank’s annual meeting in Bali. Factoring these, overall index performance can remain under pressure, however, news flows suggesting GoP extending subsidy to the fertilizer sector post gas rate hike should incite interest in the sector.
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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