Report
Team AKD Research
EUR 13.87 For Business Accounts Only

AKD STOCK SMART, Jan 31, 2020

StockSmart                       

Weekly Review                                

Weak earning reads and MPC’s decision to hold interest rates have triggered risk-off sentiment, with benchmark KSE-100 index losing 2.35%WoW to close the week at 41,631pts (down 1,002pts). Market participation remained weak, with an average daily volume of 188.14mn shares (flattish WoW), where i) MLCF (78.7mn shares), ii) HASCOL (76.15 mn shares), ii) UNITY (55.18mn shares), iv) AVN (43.63mn shares) and v) BOP (42.18mn shares) were key volume generators. Sector wise, upstream oil stocks (E&Ps: down 4.7%WoW) took a beating on declining oil prices and the gov’t announcement of partial stake sale in OGDC & PPL. Cement sector corrected 1.7%WoW on pricing concerns following new capacity additions & industry’s failure to reach a consensus on pricing. Other major news flows impacting the market during the week included i) the gov’t notifying the reduction in GIDC from PkR405 per bag to PkR5 per bag, ii) the ECC deferring the MoE’s proposal of gas price hike (up to 15%,) while proposing changes to minimize the burden on domestic consumers, iii) the gov’t raising PkR590bn via auction of treasury bills while maintaining cut-off yields for 3M/6M/12M bills at 13.43%/13.29%/13.13%, and iv) FX reserves held by the SBP increasing by US$184mn to US$11.91bn during the week ended Jan 24’20. Within AKD Universe, MCB (-6.13%WoW), NML (-5.15%WoW), UBL (-5.01%WoW), POL (-4.99%WoW), PPL (-4.92%WoW) & OGDC (4.0%WoW) were major underperformers while HASCOL (+12.31%WoW), PSMC (+2.75%WoW), NCL (+2.66%WoW and INDU (+2.65%WoW) were major gainers.

 

Outlook

With result season in full swing, near term market performance will largely be guided by earning reads. MCB, EPCL, ABL & MFL are some of the major corporates scheduled to announce their earnings next week. From a macro vantage, the market will be keenly watching developments pertaining to the second IMF review under EFF, inflation reading for Jan’20 (AKD Research expects 9yr high reading of 13.60%YoY), and FBR’s tax collection. News flow suggests weak tax collection for the month of January (monthly shortfall of ~PkR100bn). Over the medium term, market performance should track the progress on the reform agenda. 

Underlying
Hascol Petroleum

Hascol Petroleum Ltd. Hascol Petroleum Limited is a Pakistan-based company, which is engaged in procurement, storage and marketing of petroleum and related products. The Company is involved in the sale of petroleum products, such as fuel oil, high speed diesel, gasoline, Jet A-1, liquefied petroleum gas (LPG) and lubricants. The Company offers products, such as Tiger Super, Rocket Diesel and Furnace Oil. The Company offers Fuchs Lubricants products, which include corrosion preventives, quenching oils, industrial lubricants, open gear lubricants, greases, automotive oil and metal working fluids. The Company also markets LPG as an automotive fuel through its retail network. The Company is engaged in owning, leasing and renting oil storage facilities, as well as importing petroleum products. The Company has storage facilities at Machike, Shikarpur and Daulatpur. The Company sells its product to dealers, government agencies and autonomous bodies, independent power project and other corporate customers.

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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