Stock Smart Weekly (Jun 26, 2020)
StockSmart
Weekly Review
KSE-100 made a turn for the better, closing 1.5% higher WoW at 33,939 points. Major events during the week included fresh inflow of US$1.725mn during the outgoing week, stabilizing the local currency. At the end of the week, the SBP cut the policy rate by a further 100bps to 7% to spur economic growth. The latest move took cumulative easing to 625bps CYTD. Important economic data points released during the week included: (i) FDI, which declined 53%YoY in May’20 due to COVID-19 and, (ii) current account, whereby Pakistan posted a surplus of US$13mn in May’20, against US$350mn deficit in Apr’20. In PIB auction, GoP raised funds below the target of Rs140bn, despite increasing returns on the PIBs (30-40bps). Other major news flow included: (i) Pakistan considering amendment in foreign exchange laws within three months for compliance with FATF conditions by Oct’20, (ii) Govt aiming for 4-4.5pc growth over next three years, while (iii) GDP growth rate may remain lower than -0.4pc in FY20, (iv) ENI divesting its upstream business in Pakistan, (v) Urea rates likely to increase by Rs200/bag, with gas price in the offing, (vi) Elengy seeking developers for its second onshore LNG terminal, (vii) Remdesivir exempted from duty, advance tax, and (viii) Govt deciding to extend fiscal incentives Oxygen-manufacturing companies. KSE-100 average traded volumes during the week declined 22.7%WoW to 177mn shares. Stocks which generated large volumes included: 1) TRG (59.96mn shares), 2) UNITY (50.6mn shares), 3) MLCF (39.6mn shares) and 4) HUMNL (32.8mn shares). Major gainers from KSE-100 were: 1) SHEL (+15.1%WoW), 2) DAWH (+11.7%WoW), 3) FATIMA (+10.7%WoW) and 4) FFC (+8.5%WoW), whereas laggards dragging the index lower were: 1) AGP (-7.6%WoW), 2) BAFL (-5.5%WoW), 3) PTC (-4.6%WoW), and 4) PMPK (-4.3%WoW).
Outlook
Inflation number expected in the next week may more or less remain a neutral event for the market (AKD Research expectation: 8.12%), with SBP riding ahead of the curve. Finance Bill 2020 will be tabled in National Assembly on Sunday, where potential changes based on Senate’s recommendations may drive the market sentiment.
AKD Research
Bank Alfalah Limited is a holding company. The Company's segments include Retail banking, including loans, deposits, trading activity, wealth management and other banking transactions with its retail and middle market customers; Corporate banking, which includes loans, deposits, project financing, trade financing, investment banking and other banking activities with its corporate and public sector customers; Treasury, including liquidity management activities carried out through borrowing, lending and money market operations; Consumer banking, including constitutes consumer financing activities with individual customers; Islamic banking, pertaining to its full scale Islamic Banking operations; International operations, which includes amounts related to its overseas operations, namely, commercial banking activities in Bangladesh and Afghanistan, and wholesale banking activities in the Kingdom of Bahrain, and Others, including merchant banking related activities.
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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