Stock Smart Weekly (May 06, 2021)
StockSmart
Weekly Review
Reversing the trend witnessed in the previous week, KSE-100 index gained 2.1%WoW to close at 45,175pts amid dull participation (avg. volumes stood at 241.4mn shares vs. 331.2mn shares in the previous week) ahead of long week holidays with major activity tilted towards mainboards (KSE-100/KSE-All volumes improving to 78.0% in the current week vs. 62.5% in the previous week). Diminishing severity of COVID cases (positivity rate <10%) and reiteration of pro-growth policies by the new Finance Minister improved market confidence. Other major news flows during the week were, i) EU Parliament to review trade ties with Pakistan, ii) ECC approved payment of PkR90bn as first installment to IPPs, iii) Consultation process expedited for early termination/buyout of 11 oil-fired power plants, iv) local cement sales registered growth of 24.3%YoY in Apr’21, v) FBR surpassed revenue collection target by Rs34bn to stand at PkR384bn in Apr’21, vi) Inflation edged up to 11.1%YoY from 9.1YoY in March – in line with expectations, and vii) Cabinet approve certain amendments to meet FATF conditions. Amongst mainboards, sector performance was led by expectation of release of first tranche of circular debt payment in May’21 (Power sector: +3.8%WoW and OMCs: +2.8%WoW) while laggard was Textiles (down 1.2%WoW as EU reviews trade terms with Pakistan). Overall, sector chart was topped by Paper and Board (+5.2%WoW), followed by Vanaspati segment (+4.3%WoW) while Glass & Ceramics was down most by 1.2%WoW. Flow wise, we witnessed slower activity by foreigners (net sell: US$1.04mn) whereas, on the local side, Insurance companies and Banks were on the selling side, cumulatively squaring positions of US$6.4mn which was absorbed by continuation of buying spree by ‘Other organizations’ (net buy: US$7.55mn). Scrip wise, top performers were, i) UNITY (+16.0%WoW), ii) BAFL (+9.5%WoW), iii) KAPCO (+6.7%WoW), iv) PKGS (+6.5%WoW), and v) SYS (+6.1%WoW), while laggards were, i) FML (down 9.3%WoW), ii) GATI (down 5.1%WoW), iii) AGIL (down 4.1%WoW), iv) ARPL (down 3.1%WoW), and v) ATLH (down 2.9%WoW).
Outlook
With the result season taking back seat and market resuming after a long week holidays, i) the resultant trend of COVID cases, ii) MSCI announcement (possible inclusion of TRG or MEBL in place of PKGS in MSCI small-cap would be the key watch), and iii) news flows concerning FY22 budget would drive market performance in the near term. We continue to advocate for stocks that fall on structural theme including Cements, Steel and Construction-allied, Power and select-OMCs (PSO).
AKD Research
Archroma Pakistan Limited (ARPL), formerly Clariant Pakistan Limited, is a Pakistan-based color and specialty chemicals company. The Company is engaged in the manufacture and sale of chemicals, dyestuffs and emulsions. It also acts as an indenting agent. The Company's segments include Textile, Emulsions and Paper. The Company's products include Advanced Denim, Drimaren, Foron, NanoSphere, coldblack, Nuva N, Nylosan, Direct dyes, Mowilith, Mowicoll, Cartaseal, Cartacol, Appretan, Emucryl, Printofix, Dye fixatives, defoamers, Crosslinkers, fluorochemicals and barrier additives, Optical brightening agents, quenching agents, wet and dry strength resins, rheology modifiers, shading dyes and pigments, and sulfur dyes. The Company offers services to a range of markets, including paints, adhesives, printing and writing, coated paper, transportation, packaging and board, construction, carpet, newsprint, automotive, sports, nonwovens and specialties, tissue and toweling, and others.
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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