Pakistan Banks: 1QCY17F Result Previews
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AKD Banking Universe has shed 7% CYTD struggling on account of lower for longer interest rate environment with reversal expectations now pushed forward to end CY17. Banking spreads remain at their multi-yr lows while yield on investment continues to fall as high yielding PIBs mature (2nd round of maturity in 2HCY17), exerting pressure on NIMs. The upcoming result season is likely to reflect the same where we expect earnings deceleration of 11%YoY in AKD Banking Universe. While asset quality metrics can see improvement, capital gains utilization particularly from equities is expected to remain on the lower side (KSE-100 index lost 0.5%CYTD). With 1QCY17F earnings expectations remaining unexciting, we feel the upcoming MSCI EM inclusion (expected in May'17) is likely to catalyze price performance for the sector. In this backdrop, we look favorably towards potential entrants like HBL, UBL and MCB making the cut.
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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