AKD STOCK SMART, Jul 06, 2018
StockSmart
Weekly Review
During a week where accountability court reserved its verdict on Avenfield reference case and finally ended with severe punishments & hefty fines on Nawaz and family, investors chose to remain on the sidelines with volumes sliding down by 39.1%WoW to 110.65mn shares, while the benchmark KSE-100 index closed at 40,284pts on Friday, down 3.88%WoW. Concentrated interest was witnessed in K-Electric (KEL) as the regulator announced revised tariff, albeit giving a meagre PkR0.047/KwH raise (under O&M expenses) over the previous one, where the scrip gathered volumes of 79.37mn shares. The list of volume leaders was followed by 2) PAEL (32.21mn shares), 3) UNITY (19.65mn shares), 4) BOP (19.32mn shares) and 5) TRG (17.25mn shares). Other key news impacting the market included: 1) extension in tax amnesty scheme till Jul 31’18, with latest reports claiming collection of PkR100bn so far, 2) China reportedly lending US$1bn to support Pakistan’s forex reserves, with SBP reserves reported at US$9.79bn, 3) GoP raising MS and HSD prices by PkR7.54/14/liter to PkR99.50/119.31/liter, 4) Fitch warning gov’t authorities about the deteriorating economic situation, specifically forex reserves, and revising growth assumption for FY19 to 5.0% from 5.5% previously and 5) inflation for Jun’18 spiking up to 5.2%YoY, averaging at 3.92%YoY for FY18. Amongst the AKD universe, KAPCO remained the only scrip closing the week in green, up 1.21%WoW, while losers included :1) ASTL (-13.31%WoW), 2) CHCC (-11.74%WoW), 3) MLCF (-8.04%WoW), 4) EFOODS (-6.85%WoW) and 5) NML (-6.56%WoW). Foreign selling continued for another week with outflow of US$8.73mn as against US$15.52mn during the previous week.
Outlook
Post accountability court’s verdict on Avenfield reference case, reaction from various political factions (most importantly PML-N) will be of utmost interest for market participants, especially as general elections draw near. However, a relief rally cannot be ruled out as discounted valuations could entice investors’ interest post clarity over the said case, although economic concerns still loom around. In this regard, we recommend accumulation of fundamentally strong blue-chip stocks.
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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