Report
Team AKD Research
EUR 13.86 For Business Accounts Only

Stock Smart Weekly (Aug 27, 2021)

StockSmart                       

Weekly Review                                

KSE-100 remained under pressure during the week, apart from Monday, where the benchmark index crossed the much anticipated barrier of 48,000pts to close at 48,112pts (+512ptsDoD) but the weak sentiment of the market coupled with incessant PkR/USD depreciation (+0.9%WoW), geopolitical tensions in the region and uncertainty over talks with IMF continued to derail investor confidence during the rest of the week. The index, therefore, could not sustain the massive selling occurred during week and cumulatively loss 463pts (-0.97%WoW) to close at 47,137pts. Despite receiving US$2.7bn inflow under IMF’s SDR allocation (conditional, to be directed to COVID vaccine procurement), the surging import bill payments due to constant currency deprecation kept the market sentiment negative. Participation during the week remained strong with average daily traded volume standing at 384.1mn shares against 265.7mn shares witnessed during last week. Sector-wise, DAP price increased by PkR400/bag to PkR6,300 vs. landed cost of international DAP at PkR6,700/bag. Other major news flow during the week included i) Amid rising imports, the country posted a current account deficit of US$773mn in the 1MFY22 against a surplus of US$583mn in 1MFY21, ii) Pakistan’s energy sector circular debt reached PkR2.28tn in FY21 against PkR 2.15tn in FY20, showing a growth of +6.04%YoY in its flow, iii) IMF chief thanked Pakistan for helping in evacuation of fund staff and their families from Afghanistan after its takeover by Taliban, iv) CCoE approved power generation capacity expansion plan, v) Pakistan’s textile and clothing exports posted double-digit growth in 1MFY22 increasing by 15.61%YoY to US$1.41bn compared to US$1.27bn in 1MFY21, and vi) Pakistan’s overall budget deficit has risen to a staggering PkR3.4tn, equivalent to 7.1% of GDP, in FY21. Top performers of the market included i) PSEL (+14.6%WoW), ii) GSKCH (+10.9%WoW), iii) SYS (+10.4%WoW), iv) MEBL (+8.5%WoW), and v) ARPL (+8.2%WoW). Meanwhile laggards included: i) JLICL (-14.7%WoW), ii) SRVI (-13.4%WoW), iii) GADT (-11.1%WoW), iv) ANL (-10.1%WoW), and v) HGFA (-7.8%WoW). Top volume leaders included WTL (144.3mn), GGL (103.6mn), HUMNL (85mn), ANL (80.3mn) and BOP (75.8mn). Flow wise, other organization remained the major buyers with (net buy of USD3.49mn) followed by Mutual Funds (net buy of USD2.27mn) while Insurance Companies stood on the other side with (net sell of USD2.38mn) followed by Banks and DFI (net sell of USD1.52mn). 

Outlook

The market performance is likely to remain range-bound amid the political turmoil in Afghanistan, and uncertainty surrounding IMF review (likely to commence from Sep’21). However, from sectoral perspective, currency devaluation bodes well for Textiles and E&Ps while for import driven sectors like cement and steel, their ability to pass on cost further will be tested. Moreover, flow based movement on account of MSCI Review in Sep’21 will also impact market sentiment. For the upcoming week major results include, KOHC, HUBC and PSMC.

AKD Research 

Underlying
Meezan Bank Ltd.

Meezan Bank Limited is an Islamic commercial bank. The Bank is engaged in corporate, commercial, consumer, investment and retail banking activities. It offers a range of Islamic banking products and services through a retail banking network of over 550 branches in approximately 140 cities to its corporate, commercial and small and medium-sized enterprise (SME) customers based on their financial requirements. It provides personal banking, business banking, premium banking and branchless banking. The Bank also offers Meezan Rupee Current Account, Karobari Munafa Account, Meezan Rupee Savings Account, Meezan Business Plus Account, Meezan Bachat Account, Meezan Kids Club Account, Meezan Teens Club Account, Meezan Asaan Current Account, Meezan Kafalah, Certificates of Islamic Investment, Meezan Amdan Certificate and Dollar Mudarabah Certificate. It has assets in agriculture, food, forestry and fishing; cement, and others. The Bank operates only in Pakistan.

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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