Stock Smart Weekly (Oct 22, 2021)
StockSmart
Weekly Review
In a shorter than usual week, market remained volatile where the start of the week witnessed across the board selling as investors became jittery on the news that IMF talks remained inconclusive. However, once a clarification was published that negotiations are still going on, market took a sigh of relief on second day of the week and increased 1.9% in a day. The same momentum was carried into third trading day however on the fourth day, news flow regarding IMF discussions again caused jitters and a sell-off was witnessed. KSE-100 closed the week at 45,578pts, up 1.69%WoW. Commercial Banks remained amongst major performers for the week as increasing inflation and depreciating exchange rate infused expectations of a rate hike. To note, yields of 3M T-Bill increased by 40bps in the latest auction. Increasing oil prices on the back of global energy crunch instilled fuel into oil and gas exploration sector with the sector posting an increase of 2.1% during the week. One of the major beneficiaries of depreciating exchange rate is the textile sector and the same resulted in sector posting a positive return of 2.7% for the week. Foreigners remained on the selling side during the week, posting a net sell of USD12.8mn; major part of this selling was absorbed by insurance with a net buy of USD6.49mn. Avg. daily traded volume during the week decreased by 10.5%WoW to 306mn shares. Other news flow during the week included: i) Government announcing a countrywide uniform increase in base electricity tariff, ii) Large-Scale Manufacturing (LSM) posting a growth of 12.74%YoY in Aug’21,, iii) Pakistan's current account deficit narrowing to USD1.1bn in Sep’21, and iv) Government planning to issue a Panda bond by March 2022. Stock wise gainers were, i) AICL (+13.6%WoW), ii) UBL (+9.8%WoW), iii) KOHC (+9.8%WoW), iv) EPCL (+9.0%WoW), and v) HBL (+9.0%WoW), while laggards were, MTL (down 18.8%WoW), JDWS (down 9.2%WoW), GHGL(down 8.1%WoW), HCAR (down 7.8%WoW), and v) KAPCO (down 7.7%WoW).
Outlook
Market is going to watch a number of events closely where ongoing negotiations with IMF remain paramount and an agreement there will prove to be a significant stimulus for the market. However, political arena is also heating up with opposition parties staging protest across the country. Even though protests in their current form will largely be a non-event from stock market’s vantage, any escalation in tensions can weigh heavily over the market. Lastly, notification of DG ISI’s appointment is still awaited which again will be a significant trigger for the market, in our view.
AKD Research
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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