AKD STOCK SMART
Weekly Review
The market performance during the outgoing week remained under pressure, where KSE-100 index troughed at 36,579 points mid-week, lowest level since PTI’s government came to power. The market rumor of a potential price war in cement sector led to a further drag on the market performance. Meanwhile, a delegation led by Finance Minister Asad Umar reached Washington for crucial discussions on an IMF program, on 8th April’2019. The discussions are expected to last till 15th April, which will be followed by official announcement of amnesty scheme. The government, which has yet to take stringent steps on the fiscal side, is expecting to raise PkR120-150bn from the Amnesty scheme. The newsflow during the week included: 1) Pakistan, IMF at odds over PkR5.4tn tax collection target vs. 4.0tn collected in FY18, 2) IMF’s forecast for Pakistan’s GDP growth rate to remain at 2.5% till 2024, and fiscal deficit to peak at 8.7% of GDP in FY20, without reforms, 3) government mulling over a gas price hike of 20-42%, effective Jul’19 to reduce losses incurred by gas companies in the outgoing financial year, 4) trade deficit declining by by 14% in 9MFY19 due to sharp currency devaluation since Dec’18, despite 5) flattish exports during 9MFY19, posting an especially bad performance during Mar’19 (down 11% YoY), and lastly 6) autos sales, which remained flattish at 160K units during 9MFY19, with cars of 800cc and below did exceptionally well due to removal of non-filer ban in Mar’19. Top performers during the week included HUBC (+5.77%), PSO (+4.62%) and NBP (+4.06%), while CHCC (-16.4%), PIOC (-15.6%) and MLCF (-14.1%) remained the worst performers. Average daily turnover increased 25% WoW to 148mn shares, led by 1) KEL (57.98mn shares), 2) WTL (50.63mn shares), 3) MLCF (47mn shares), 4) FCCL (46.28mn shares) and 5) BOP (42.95mn shares).
Outlook
The market during upcoming week is expected to be dominated by further newsflow regarding development on IMF program, announcement of another Amnesty scheme and submission of FATF’s third implementation report on 15th April. The result season has started on a weak note, with APL posting below expected results, and will continue to hold sway over market performance
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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