Pakistan Economy: PkR losing ground on BoP weakness
Interest rate hike in the confluence with an unexpected currency adjustment took toll on the market with the KSE-100 index losing 1.5% in market capitalization. Economic concerns pertaining to the escalating external imbalance and consequent slippage in FX reserves, rising fiscal deficit and buildup of inflationary pressures have come to the fore reinforcing the view of imminent entry into another IMF program. The recent round of devaluation marks the fourth currency adjustment in the last eight months where we expect further volatility until IMF program (base case PkR/US$ parity at 133 by Jun'19). In this backdrop, we expect currency devaluation to emerge as a key investment theme benefitting exporting (Textiles and IT) and dollar hedged (IPPs, E&Ps) sectors. As an extended advantage, Commercial Banks should also stand to benefit from consequent increase in interest rates while Cements, Fertilizer, Pharmaceuticals and Autos are expected to suffer on higher input costs. Our preferred plays include MCB, HBL, OGDC, NML, HUBC and LUCK.
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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