Report
Team AKD Research
EUR 13.39 For Business Accounts Only

AKD STOCK SMART, Mar 20, 2020

StockSmart                       

Weekly Review                                

KSE-100 started the week with a massive selloff and increased concerns over growing cases of COVID-19 around the world. Commodities also witnessed a slide on the back of decreasing demand projections whereas ongoing tussle between global oil players also took a toll on oil prices. That said, slight rebound was witnessed towards tail-end of the week as investors went after cheap valuations. Consequently, KSE-100 closed the week at 30,667pts, down 14.5%WoW. Foreign investors continued with the selling, in-line with the global sell-off, as net FIPI outflow stood at US$19.6mn for the week taking c. MTD outflow to US$59.3mn. Major news flow driving market sentiment included: i) State Bank of Pakistan (SBP) reducing its policy rate by 75bps to 12.5% while announcing two new measures to provide subsidized credit to industry to help meet challenges posed by the growing pandemic, ii) Moody’s Investor Service decreasing its forecast for Pakistan growth rate to 2.5% for the current fiscal year owing to Covid-19, iii) Petroleum Division initiating a process of consultation to consider reduction in allowable UFG benchmarks along with reduction in return on assets and rationalization of transmission and distribution costs, iv) Pakistan’s current account deficit (CAD) shrinking by 71.0% to US$2.84bn during 8MFY20 compared to US$9.82bn in the corresponding period last year, and v) Government considering an “economic emergency bailout package” within a week to address the likely short-to-medium term liquidity crunch to various sectors of the economy. KSE-100 average traded volumes during the week was down 9.5%WoW to stand at 239.2mn shares with stocks generating large volumes during the week included: i) BOP (122.3mn shares), ii) KEL (79.1mn shares), iii) MLCF (67.4mn shares), and iv) UNITY (57.7mn shares). Laggards amongst our coverage universe were: i) PIOC (down 32.2%WoW), ii) NML (down 32.2%WoW), iii) NCL (down 29.8%WoW), iv) CHCC (down 27.2%WoW), and v) PAEL (down 26.9%WoW).

 

Outlook

Going forward, market is going to be dominated by how the situation regarding COVID-19 evolves particularly after Pakistan witnessed first three deaths during the outgoing week. On the other hand, increase uncertainty over international commodity prices, particularly oil, can keep the market jittery. The only respite can appear from the economic package government is mulling however any disappoint on that front can put market under severe pressure.

AKD Research 

Underlying
Cherat Cement Co.

Co. is engaged in the manufacturing and marketing of cement and clinker.

Provider
AKD Securities Limited
AKD Securities Limited

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.

Analysts
Team AKD Research

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