Stock Smart Weekly (Apr 02, 2021)
StockSmart
Weekly Review
Weak sentiment of last week continued to cast its shadow on the stock market with KSE-100 shedding 1,221pts during the week, closing at 44,301pts, down 2.7%WoW. Intensifying COVID-19 across the country was already keeping the market jittery but a series of changes across different ministries further weakened the sentiment. One prominent change was removal of special assistant of petroleum which casted doubts over timely approval of new refinery policy hence refinery sector led the decline for the week, down 12.6%WoW followed by technology sector as rupees appreciation is expected to dent the profitability with majority of the earnings being dollar based for the companies. Even a lower than expected CPI of 9.1% against consensus expectation of 9.5% failed to provide any strength to the market. Participation during the week remained dull with average daily traded volume standing at 377.45mn shares against 462.57mn shares witnessed during last week. Major news flow during the week included i) Govt. missing deadline for first payment to IPPs, ii) Hammad Azhar being appointed Finance Minister in place of Dr Abdul Hafeez Shaikh, iii) Prime Minister Imran Khan calling for creating an enabling environment for a constructive and result-oriented dialogue in a letter written to Indian Prime Minister Narendra Modi, iv) Government raising USD2.5bn through a Eurobond issue, v) Pakistan receiving around USD500mn from International Monetary Fund (IMF) as a loan tranche under Extended Fund Facility (EFF) and, vi) CPI for Mar'21 clocking in at 9.1%. Flow wise, Foreigners remained net sellers during the week (net sell of USD4.93mn) together with Mutual Funds (net sell of USD11.40mn) and Brokers (net sell of USD5.48mn) while the selling was absorbed by Insurance (net buy of USD6.79mn) accompanied by Individuals (net buy of USD5.39mn) and Banks/DFIs (net buy of USD4.53mn). Top performers for the week were, i) SCBP (+10.3%WoW), ii) SRVI (+8.7% WoW), iii) PSMC (+7.9%WoW), iv) GATI (+7.6%WoW), and v) ENGRO (+5.8%WoW) whereas laggards were, i) TRG (-18.3%WoW), ii) ATRL (-16.1%WoW), iii) HMM (-13.2%WoW), iv) ANL (-11.8%WoW), and v) HASCOL (-11.5%WoW).
Outlook
Increasing positivity rate of COVID-19 and government's measures to counter the spread are likely to be the main determinants of market's direction in near term. However, support is expected to be provided by impressive economic indicators where inflows under RDA have surpassed expectations so far. Additional trigger can be provided by upcoming result season where sequential improvement can be expected across a number of sectors.
AKD Research
Engro Fertilizers Limited is a Pakistan-based company, which is engaged in manufacturing, purchasing and marketing of fertilizers. The Company's brands include Engro Urea, Engro NP, Engro DAP, Zingro, Engro MOP, Engro SSP and Engro Zarkhez. Engro NP is the Company's fertilizer brand with Nitrogen and Phosphorous content in equal quantity. Engro DAP primarily contains Di-Ammonium Phosphate, and is imported by Engro EXIMP and marketed by the Company. Engro DAP is marketed in approximately 50 kilogram bags. Zingro is a micronutrient fertilizer, and is imported by Engro EXIMP and marketed by the Company. Engro Zarkhez has Nitrogen, Phosphorous and Potassium, and is primarily offered for sugar cane, fruit orchards, vegetables, potato and tobacco farming. Engro Envy is primarily offered to urban market for gardens, lawns, flower beds, fruit plants and ornamental plants. The Company is a subsidiary of Engro Corporation.
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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