Stock Smart Weekly (Jan 29, 2021)
StockSmart
Weekly Review
KSE-100 gained 1.13%WoW on the back of earning season commencing in full swing with major stocks reporting beats to expectations, aiding momentum throughout the week and closed on 46,386pts. Buoyed by positive sentiments, the daily traded volume on Friday was recorded at ~1.12bn surpassing the high-water mark last witnessed during Sep’20 reflecting broad-based participation with mutual funds turning net buyers. However, delays in approving textile policy and status quo on OMCs margins revision triggered negative sentiments which resulted in sectoral profit taking. Key news flows for the week consisted of i) Chinese company Sinopharm was given the go-ahead to start distributing vaccines from the next week while Russian vaccine Sputnik V has been granted authorization by DRAP, ii) despite clearing the negotiation stage, notification of supportive measures in the textile policy 2020-25 are awaited, iii) for the period of 5MFY21, domestic debt servicing increased by 38%YoY to PKR921bn compared to PKR666bn in 5MFY20, iv) per unit tariff of SSGC consumers as notified by OGRA, rose to PKR44/mmbtu, to meet PKR14.3bn shortfall in its estimated revenue requirement (ERR), which included a shortfall of PKR51bn from last year, and vi) IMF projected GDP Growth of 1.5% for Pakistan for FY 2021 incorporating COVID-19 spillovers, and 4% for FY 2022. Amongst major sectors, refinery led the pack with a gain of (+10.8%WoW) followed by vanaspati & allied industries (+10.0%WoW), technology (+8.3%WoW) and cement (+6.4%WoW). Flow wise, Foreigners remained net sellers during the week (US$9.14mn net outflow) together with Banks (net sell of US$3.49mn) which was mainly absorbed by Companies (net buy of US$8.09mn) and Individuals (net buy of US$8.66mn). Top performers during the week were, i) TRG (+19.0%WoW), ii) FCCL (+16.0%WoW), iii) CHCC (+15.3%WoW), iv) ANL (+14.7%WoW), and AGP (+14.4%WoW) whereas laggards were, i) APL (down 9.5%WoW), ii) HMB (down 6.8%WoW), iii) STLJ (down 6.5% WoW), and iv) JLICL (down 5.8%WoW).
Outlook
Earning’s season and positive market expectation will continue to ramp up market activity in the coming week. Moreover, commencement of Covid-19 vaccinations (Sinopharm) in the coming week should bolster investor confidence. Major earnings announcement in the upcoming week include INIL, BAFL, AGP and PRL.
AKD Research
Co. is engaged in the manufacturing and marketing of cement and clinker.
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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