Report
Team AKD Research
EUR 12.98 For Business Accounts Only

Stock Smart Weekly (Dec 20, 2019)

StockSmart                       

Weekly Review                                

The market started off on a strong note with the KSE-100 index gaining 728pts (or +1.8% from Friday close) on Monday, with the rally driven by mainboard stocks particularly the E&P sector (+4.6%WoW). However, profit-taking and negative news flow on the political front dented market sentiments with the benchmark index closing flat at 40,833pts (down 0.2%WoW). OGRA’s proposal for a hike in gas prices (+31.6%) for general industries additionally impacted the market performance. Amongst listed space, the highest rate hike (+136%) was proposed for the Fertilizer sector (on feed), which led the sector to close 1.3%WoW lower. Avg. daily volumes improved 8%WoW to 297.4mn shares during the week. Amongst major positive news flows which were largely ignored by the investors included, i) Pakistan reportedly requesting the Saudi Arabia and the UAE to convert the US$5bn deposits into long term loan, ii) IMF approving US$452mn second tranche to Pakistan, iii) CAD balance returning to normalization (US$319mn in Nov’19, down 73%YoY), iv) ECC approving OGDC and PPL to participate in the bidding round for an offshore block in Abu Dhabi, and v) SBP confident of attracting foreign inflows in longer-tenor securities. Flows wise, foreigners were net buyers (US$3.1mn) along with Insurance (US$8.7mn) and Companies (US$5.4mn) whereas Banks (net sell US$5.5mn) and Mutual Funds and Others (c. net sell US$12.1mn) were at the forefront in churning their equity exposure (possibly due to year-end realignment).  Within AKD Universe, top performers were i) PPL (+7.7%WoW), ii) CHCC (+6.2%WoW), iii) OGDC (+6.1%WoW), iv) MEBL (+5.3%WoW), and v) NCL (+5.0%WoW), while laggards were, i) FFBL (down 10.9%WoW), ii) ASTL (down 7.9%WoW), iii) FCCL (down 7.4%WoW), iv) PAEL (down 6.7%WoW), and v) KEL (6.4%WoW).

 

Outlook

Following a measured response from the DG ISPR, the week end closing in green is a sign of easing political temperature. We see further moderation in the upcoming week, thus expect the market sentiment to improve considerably. Moreover, year-end window dressing from the local AMCs could provide additional support to the market. That said, market participation may remain weak due to the Christmas season, a phenomenon usually witness in the last week of the year. Our preference remains tilted towards E&Ps, Banks, and selected Power.

 

AKD Research 

Underlying
Fauji Fertilizer Bin Qasim Ltd.

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.

Provider
AKD Securities Limited
AKD Securities Limited

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.

Analysts
Team AKD Research

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