Pakistan Market - The Prancing Horse!, (AKD Daily, Jan 02, 2020)
Pakistan Market - The Prancing Horse!
Time to go all in as Pakistan’s perceived macro de-risking and entailing euphoria is carried through to another year. Our CY20 index target comes in at 53,600 - a bonanza year for equities with the KSE-100 racking up another 32% gain. Thematically, Pakistan’s investment case hinges around three factors, i) the economic reform process being undertaken, ii) monetary easing likely to be initiated in CY20 (AKD estimate: 150bps) and iii) undemanding valuations (P/E: 6.6x, D/Y: 7.4%; earnings growth: 22%YoY). A key check point, however, remains the FATF plenary session in Feb’20 where Pakistan is largely expected to remain in the grey list. Of particular importance will be Pakistan’s international successes in CY20 where role in US troop withdrawal may open diplomatic and financial corridors, while the country will also look towards materialization of investment flows from Saudia (US$7bn) and China (CPEC Phase II). From a global context, Pakistan’s current situation remarkably mirrors that of Brazil in 2016 and Egypt in 2017, with indices of both countries staging spectacular rebounds amid economic reforms. Flow based investment may remain the mantra as ample liquidity seeps through to equities with major investor categories barring Individuals playing catch-up, reinstating the sentiment that defined the latter part of CY19. While bullish over a broad spectrum, preferred plays include Banks (UBL, HBL, BAFL, BOP), Power (HUBC), E&Ps (OGDC, PPL), Cyclicals ala Cements (LUCK, KOHC) and Textiles (NML).
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Habib Bank Limited is engaged in commercial banking and asset management related services in Pakistan and overseas. The Bank's segments include Branch Banking, which consists of loans, deposits and other banking services to agriculture, consumer, small and medium-sized enterprise (SME), and commercial customers; Corporate Banking, which consists of lending for project finance, trade finance and working capital to corporate customers and it also provides investment banking services, including services provided in connection with mergers and acquisitions; Treasury, which consists of trading, fixed income, equity, derivatives and foreign exchange businesses, and it also includes credit, lending and funding activities with professional market counterparties; International Banking, which is engaged in monitoring and reporting purposes and consists of its operations outside of Pakistan, and Head Office/Others. It operates in Pakistan; Europe, Middle East and America, and Asia and Africa.
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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