Pakistan Market_May’17 Review & Outlook
As eventful as it was, the market gained 2.6%MoM in May'17 in anticipation of a populist budget while gearing up for Pakistan's formal inclusion in the MSCI EM index. The gains however were limited (the market lost 4% since presentation of Budget FY18) where, contrary to expectations, fiscal prudence superceded election year populist measures in Budget FY18. Also, unexpected tax restructuring on the stock market induced further volatility (flat 15% CGT regardless of holding period, enhancement of tax on dividend to 15%). On the other hand, transition to MSCI EM index triggered a sell-off with KSE-100 index losing 1.7%, just a day before formal inclusion of Pakistan in MSCI EM (Jun 1'17). In this regard, profit taking was evident in MSCI EM stocks with traded value recorded at US$508.7mn, touching its decade high. Going forward, foreign activity is likely to guide market sentiments in the short term with the market seeing increased volatility until complete re-balancing of portfolios. However, we expect key themes like: 1) materialization of CPEC projects, 2) healthy corporate earnings growth (12% next year), 3) interest rate reversal and 4) depreciative pressures on the PkR to take center stage until general elections next year.
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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