AKD STOCK SMART, Feb 1, 2019
Weekly Review
KSE-100 index witnessed dull sessions in the last week of Jan’19, with monetary announcement of 25bps hike pulling-up KSE-100 index (+0.8% on Friday) to close at 41,112.7pts (+2.1%WoW). Budget developments continue to favorably impact the auto sector, where PSMC/INDU gained 27.6%/3.1%WoW on abolishment of ban on non-filers in the below 1300CC segment. Other major news flow during the week were, i) IMF related developments where Finance Minister hinted on the fund softening stance, ii) Cabinet approving issuance of “Pakistan Banao Certificate” to raise US$500mn and iii) Power division allowed to raise PkR200bn to reduce circular debt. Foreigners continue to find market attractive with weekly inflow of US$12.3mn, with activity concentrated in Banks (US$7.68mn), E&P (US$1.65mn), and Cements (US$1.28mn). On the flipside, mutual funds opted for profit taking disposing off US$5.33mn, followed by Banks, US$2.99mn. Average volumes for the week stood at 174.84mn vs. 168.46mn in the previous week. Major upward movers in AKD universe are, i) PSMC (+27.6%), ii) HASCOL (+11.4%), iii) ASTL (+8.36%), iv) EFOODS (+7.43%), and v) PSO (+5.77%), whereas laggards are, i) FFBL (-5.65%), ii) FATIMA (-1.42%), iii) POL (-0.46%), iv) FFC (-0.38%), and v) NBP (-0.25%).
Outlook
The recent monetary policy announcement indicates continuation of monetary tightening but in a gradual pace. Further, we do not rule out another round of exchange rate adjustment. In this backdrop, we advise investors to take positions in thematic exposure in Banks, E&P, selected power and textile plays. We expect volatility to be the central theme in the short run in the market until clarity emerges on the IMF and advice investors to take longer investment horizon and build positions on dip.
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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