Autos: Weak JpY to fatten margins, (AKD Daily, Sep 26, 2017)
Having weakened 1.94% during the month of September'17 and averaging 110.9JpY/US$ for 3QCY17, a weak Yen continues to suppress costs for automotive OEMs. Despite this, possible shelving of Punjab Orange cab scheme and lackluster earnings due to tepid margins on new offerings have cemented Auto industry weakness, with PSMC/INDU losing -42/-2%FYTD. Even though current JpY averages match levels we have assumed in our forecasts (110.94JpY/US$ average for FY18E), we highlight heightened geopolitical tensions in the Korean peninsula and possible elections in Japan as furthering weakness in the Yen. News reports reveal relatively subdued picture on new entrants, with current OEMs expected to lay out plans for fending off market share accordingly. Barring any substantial initiatives mitigating increased competition, and emphasizing relative value in the space we maintain our BUY calls on INDU and PSMC.
Pak Suzuki Motor is engaged in assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, and 4X4 vehicles. Co.'s product models include Baleno, Margalla, Mehran, Kyber, Ravi Pickup, Bolan Van and Potohar Jeep.
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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