Pakistan Strategy_Exploring amendments to Finance Bill 2020, (AKD Daily, Jun 30, 2020)
AKD Daily
Pakistan Strategy: Exploring amendments to Finance Bill 2020
- In a relatively smooth legislative process (18 sessions from 5th June onwards), the Finance Bill 2020 passed the lower House (with 160 votes vs. 119 votes against), with thirty key amendments under the domain of income, sales and FED levies.
- We assess sectoral moves since the Budget speech highlighting the relatively muted response from market forces following the unveiling of key measures, while major sectors (energy chain in particular) were largely absent from Budgetary policy.
- Covering major amendments, we highlight significant relief provided to Cement sector with FED levy reduction of 0.25/kg (PkR1.5/kg passed vs. PkR1.75/Kg proposed) while increased demand has helped players in passing on the impact of increase in toll rates.
- Lastly, we sort sectoral performances highlighting the prevalence of selling activity amongst high weightage sectors during the budget announcement to adoption period, while top performing sectors during the period hold little sway (top ten hold ~14% weight vs. ~39% for bottom ten laggards) and are largely pairing back CYTD declines.
- Broadly, wider stability enacted by market participants confirms our take on the budget being far from a “Comeback Cure” while reiterating a buy on dips approach highlighting potential for performance in E&Ps (OGDC and POL on renewed OPEC+ cut compliance), Cements (MLCF & LUCK) and Banks (MEBL, UBL).
AKD Research
Lucky Cement is a cement manufacturing and distribution company which is based in Pakistan. Co. is engaged in the manufacture and sale of Ordinary Portland, Sulphate Resistant, and Slag Cement. Co.'s brand names included Lucky Cement, Lucky Star, Lucky Gold, Chairman, and Lucky Sulphate Resistant Cement. Co. maintains production facilities in Pezu (Production capacity: 13,000 tons per day) as well as in Karachi (Production capacity: 8,000 tons per day). In addition, Co. is engaged in developing export markets for bulk loose cement from Pakistan to the Gulf Countries, African Markets, and Far East Region including Nepal & Sri Lanka.
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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