AKD STOCK SMART, Feb 07, 2020
Weekly Review
Rattled by higher than expected inflation read for Jan’19 prompting wider risk-off sentiments (as expectations of monetary easing get delayed) the benchmark KSE-100 index slipped 3.6%WoW to close at 40,144. Dreary volumes characterized performance, with average daily turnover receding 10.9%WoW to 167.6mn shares, as the beginning of earnings season failed to encourage participation. Key news flows driving sentiment included: 1) Pakistani authorities are undergoing a “very tough” second quarterly review with visiting staff of the IMF as the country’s fiscal deficit breached 2.3% of GDP in the first half of 2019-20 despite a tight control on the GoP’s expenditure, 2) FBR's domestic tax collection stood at PkR1,341bn during 1HFY20 against PkR1,066bn in the corresponding period of last fiscal year, reflecting an increase of 27%YoY, 3) GoP is expecting foreign investment in treasury bills could rise to US$5bn by FY20 end, while the country having attracted US$2.9bn foreign investment in T-bills (including US$25.5m in Pakistan Investment Bonds) in 7MFY20, 4)Moody’s Investors Service on Thursday maintained its forecast for stable outlook of five leading Pakistani banks over the next 12-18 months, and 5) Cement exports sharply rose 39.5%YoY to 0.808 million tons in January as rupee depreciation encouraged exporters to increase foreign exchange revenue, but local sales increased around ~6%YoY to 3.265 million tons during the month. From the AKD Universe coverage cluster, FFC (+0.5%MoM) managed to deliver gains, while laggard included DGKC (-10.9%YoY), HASCOL (-10.5%MoM), CHCC (-10.3%MoM), FFBL (-9.5%MoM) and MLCF (-8.0%MoM). Volume leaders during the week included: 1) BOP (58.3mn shares), 2) HASCOL (50.4mn shares), 3) MLCF (44.5mn shares) and 4) UNITY (37.3mn shares).
Outlook
With earnings season in full swing firms reporting over the coming week include CHCC, NETSOL, BAFL, DGKC, NML and LOTCHEM, where lackluster expectations for Cements are likely to constrain participation while a beat by Chemicals and Banks could drive volumes. From a medium term vantage, macro news flows, particularly surrounding any fiscal adjustments (read mini-budget) could sway sentiments drastically, as the IMFs second review is expected to conclude during the coming week.
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
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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