Pakistan Strategy_Oct'21 market review and outlook, (AKD Daily, Nov 01, 2021)
AKD Daily
Pakistan Strategy_Oct’21 market review and outlook
- KSE-100 index returned 2.9%MoM during the month of Oct’21 while the US$ adjusted return during the month clocked in at 2.3% as PkR depreciated by 0.6%MoM against the Greenback. Resolution of civil-military relationship, announcement of Saudi support package and increasing likelihood of an agreement between IMF and authorities to revive the plan were the key triggers.
- Flow wise, Foreigners continue to exit Pakistan’s traditional sectors with a net sell of US$31mn where Commercial Banks and Fertilizers saw the highest net outflow of US$25.3mn and US$23.3mn respectively.
- KSE-100 index profitability grew by 21%YoY during the quarter where the key outperformers turned out to be engineering sector (profitability up by 352%YoY) and Textiles (profitability up by 163%YoY). Other honorable mentions include Autos (NPAT up by 130%) and Cements (NPAT up by 33%YoY).
- KSE-100 index has returned –2.4%FYTD, but may be primed to post a strong rally going forward. Things are finally looking up after rapid PkR depreciation halted by Saudi support package, building expectations about IMF and authorities reaching consensus regarding the revival of US$6.2bn program and ease off in coal prices. We advocate building positions in Banks (potential DR hike), Cements (coal prices coming off and increasing cement prices), Textiles (attractive valuations) and Fertilizers (FFBL on possible reclassification in Islamic index).
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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