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EUR 9.32 For Business Accounts Only

Pakistan Strategy_Sep'21- Uncertainty kept PSX under pressure, (AKD Daily, Oct 01, 2021)

AKD Daily

Pakistan Strategy: Sep’21 - Uncertainty kept PSX under pressure

  • KSE-100 index remained under pressure during Sep’21 on the back of i) setbacks on the foreign policy front, ii) ensuing weakness in macro indicators and iii) tightened price controls by the authorities, resulting in a decline of 5.3%MoM to close at 44,899pts - the largest monthly decline since Mar’20. With FYTD return standing at –ve 5.2%, CYTD return for the KSE-100 now stands at a paltry 2.6%.
  • Flow wise, Foreigners continue to exit Pakistan’s traditional sectors with a net sell of US$45.0mn where Commercial Banks witnessed the highest net outflow at US$41.6mn while Techs recorded an inflow of US$7.8mn.
  • Moving forward, market direction will likely be dictated by developments on the IMF front and possible improvement in macro indicators following corrective measures taken by the authorities. While latest shift in market activity towards mainboards (KSE-100/KSE-ALL: 50.6% in the past one week vs. CYTD avg. 41.3%) signals move towards value stocks from growth stocks.
  • We continue to advocate for building positions in thematic plays such as, Banks (particularly midcaps), Cements (despite coal price movement, players with financial strength should be preferred), Steel, Construction-Allied while currency devaluation further improves earnings outlook for Textiles. Techs should continue to be accumulated given the sector’s hedge against macro tailwinds in our view.

AKD Research

Underlying
National Bank of Pakistan

National Bank of Pakistan (the Bank) is a Pakistan-based commercial bank. The Bank provides commercial banking services, including commercial loans, investment advisory, asset management, global remittances, agency services, forex, leasing, modarba, underwriting, brokerage, and other banking and financial services. The Bank offers retail products, which include saving deposits, current deposits, housing finance, personal loans and agricultural loans; transaction banking services, which include cash management, trade finance and services, and remittance management; Corporate Finance services, which include deposits, structured corporate finance, capital advisory, investment advisory and trade finance; Treasury services, which include forex and financial derivatives, and government to person (G2P) services, which include pension payments, tax and fee collection, and other payments. The Bank serves its customers in over 20 countries.

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
Hamza Kamal

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