Stock Smart Weekly (Apr 28, 2022)
StockSmart
Weekly Review
Following the last week’s 1,049pts sell off, the market recovered 520pts on the first trading session this week on the back positive development with IMF. According to their spoke person, the IMF delegation is expected to visit Pakistan in May. In addition to this, the length of the program is also expected to increase till Jun’23 with additional US$2bn financing arrangement, taking the total program size to US$8bn. The upward movement, however, was short lived as the returns got trimmed in upcoming sessions when KIBOR reached 14-yr high to 14.1% and T-Bill yields reaching ~15%, hitting a 22-yr high. As a result, the benchmark KSE 100 index posted net decline of 304pts to close in at 45,249pts (-0.67%WoW). On the flipside, ADT witnessed a growth of 25.6%WoW. Other news flow during the week included; i) Current Account Deficit swelling to US$13bn in 9MFY22, ii) IT exports increasing 29.3%YoY to US$1.9bn, iii) Miftah Ismail holding talks with key global investors, iv) portfolio allocations to six cabinet members, and v) 9MFY22 fiscal deficit widening to ~PkR2.6trn (4% of GDP). In addition to this, the technical level talks with IMF have also started under which the stress will be placed on the curtailment of CAD and other prior actions based on the latest data available. Sector wise, the highest gainers were Cable & Electrical Goods (+22.4%WoW) and Vanaspati & Allied Industries (+1.2%WoW). Close-end Mutual Funds declined the most (-14.0%WoW), followed by Synthetic & Rayon, down 5.3%WoW). Stock wise, top performers were; i) LOTCHEM (+20.7%WoW), ii) NESTLE (+4.6%WoW), iii) BAFL (+3.0%WoW), iv) ABOT (+2.9%WoW), and v) BAHL (+2.2%WoW), while laggards were, i) DCL (-13.6%WoW), ii) KTML (-8.4%WoW), iii) MUGHAL (-7.3%WoW), iv) PTC (-7.1%WoW), and v) FFBL (-7.0%WoW). Volume leaders during the week were; i) HUMNL (96.59mn), ii) WTL (88.22mn), iii) TELE (66.46mn), iv) PRL (61.52mn), v) PAEL (47.47mn). Flow wise, Insurance companies emerged as the net sellers offloading US$6.71mn, followed by Mutual Funds (US$4.87mn) and Banks & DFIs (US$2.93mn). On the flipside, Foreign investors have accumulated shares worth US$3.17mn during the week. Similarly, Individuals and Companies remained on the buying side, with a net buy of US$5.78mn and US$2.98mn, respectively.
Outlook
After the downward correction faced by the market this week, we expect it to remain jittery in the near term. As the country settles into the new regime, economic policies are set to change, hence causing uncertainty in the market until things become clearer. News from IMF is bound to dictate market sentiments in the near term, with tough conditions being laid out for the country in the ongoing review. We continue to advise investors to accumulate on fundamental scrips with a long-term focus, and prefer the Refineries, Fertilizers and Chemicals sectors.
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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