Pakistan Autos: Low rates a key push for autos, (AKD Daily, Jul 13, 2020)
AKD Daily
Pakistan Autos: Low rates a key push for autos
- With auto sales for major segments teetering well below 5yr lows and cost inflation led price hikes continuing to cramp marginal propensity led organic demand growth, we highlight the gradual upliftment afforded to industry sales form rock-bottom interest rates.
- Taking note of concessionary auto finance schemes on offer by major lenders, we highlight the historic sales numbers/applications seen during such schemes (HBL’s Sept’16 CarLoan scheme in particular) and how these translate to advances growth for Banks.
- Drawing loose parallels with the last round of monetary easing where significant caveats exist (much more gradual easing, 20 months from peak to bottom vs. 3 months for CY20 easing cycle), we highlight the positive feedback loop for auto financing, with a pickup in auto financing evident after ~3months post easing of rates
- On balance, we remain upbeat on INDU’s ability to preserve margins, where the CYTD hike of ~8% are the largest amongst the three major OEMs (both CYTD and YoY), while Yaris seems to have been well-received (despite COVID-19 shutdowns), where cash flow improvements and healthy order book (from new model launch sales jump) lead our list of catalyst underpinning fundamentals.
AKD Research
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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