AKD STOCK SMART, Jan 17, 2020
StockSmart
Weekly Review
The KSE-100 remained range-bound during the week, closing at 43,168pts (flattish WoW) after having crossed its 17 month high last week. Despite Fitch forecasting a stable outlook for Pakistan, the cautionary tone kept the investors on a sideline. Additionally, sector wise developments including a massive spike in coal prices and dismal auto sales data kept cement and auto sectors under pressure. Preliminary data for inflation in Jan’20 also contributed to the lackluster week, which suggested monthly inflation to touch 9 year high in the outgoing month. A significant jump in foreign investments in T-bills in a single trading session also failed to spark any enthusiasm on the last day of the week. Other major news impacting the market direction included: (i) remittances during Dec’19 increasing 19.89% YoY and 15%MoM to US$2.01bn, (ii) foreign direct investment (FDI) jumping 68.3% to $1.34bn during 1HFY20, (iii) Goods transporters calling off strike after talks with Sindh, federal govts with an agreement on implementation of axle load regime, and (iv) Passenger car sales plunging 38% in Dec’19 for a 9th consecutive month with no sign of an immediate recovery. Within AKD Universe, top performers were i) PSMC (+6.6%WoW), ii) MEBL (+4.4%WoW), iii) HMB (+4.3%WoW), iv) BOP (+4.3%WoW), and v) CHCC (+3.6%WoW), while laggards were, i) FFBL (down 3.8%WoW), ii) KEL (down 3.2%WoW) and, iii) HASCOL (down 3.2%WoW).
Outlook
The market performance win the upcoming week will be defined by the result season, where results of cyclical sectors will continue to remain weak, albeit banks and fertilizer sectors are expected to post an uptick in sequential earnings, based on preliminary calculations. Although weak economic activity and an improving external account position merit some easing action, the MPC of the central bank (scheduled to meet later this month) with its singular focus on inflation will likely not move the needle in the upcoming MPS. The market will also continue to keenly watch any developments on FATF side, where Pakistan has submitted its first report for review
AKD Research
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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