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AKD STOCK SMART

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Weekly Review                                

Losing 854pts in the first two trading sessions, the market staged a strong recovery in the following three sessions, as the investors regained confidence amid gov’t guidance to address the external woes. Also, gov’t intent to rationalize the taxation regime for the capital market has been greeted with a great optimism, improving the market sentiment. In this backdrop, KSE-100 gained 912ptsWoW to close the week at 38,430pts(2.4%). In tandem, market activity improved particularly in the last three trading sessions, with avg. daily trading volume clocking in at 199mn shares (up 6%WoW). Key news flows impacting the market included: i) FM Asad Umer announcing that the IMF team will visit Pakistan on Nov 07’18 to negotiate potential bailout, ii)  FBR notifying the regulatory duty on 570 imported items ranging from electronic items, woven fabrics, ceramic items, paper, bars/rods, and iron products, iii) Federal cabinet delaying hike in consumer power tariff while announcing uninterrupted gas supply to five zero-rated export sectors, iv) Credit rating agency, Moody’s, terming IMF financing facility as a credit positive for Pakistan, an imperative to address macroeconomic imbalance and restore confidence in the economy, and v) SBP slashing estimates of GDP growth to 4.5-5% in FY19 (vs. GOP target of 6.2%) considering tough macroeconomic backdrop (i.e. monetary tightening & currency devaluation). Performance wise, scrips leading the board in AKD Universe included: i) INDU (+21.99%WoW), ii) DGKC (+14.52%WoW), iii) FCCL (+13.55%WoW), iv) EFOODS (+13.18%WoW), and v) MLCF (+13.09%WoW), while laggards included: i) MCB (-4.18%WoW), ii) HBL (-3.24%WoW), iii) KAPCO (-2.38%WoW), and iv) FFC (-1.24%WoW). Foreigners continued to offload their equity stakes in domestic equities during the week, with the net outflow of US$19.13mn.

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