Pakistan Strategy_CY21 ends with a whimper - CY22 dependent on IMF, (AKD Daily, Jan 03, 2022)
AKD Daily
Pakistan Strategy: CY21 ends with a whimper - CY22 dependent on IMF
- Friday finally brought down curtains on a disappointing CY21 where the index performance clearly fell short of the expectations, closing at 44,596 points level, returning ~3%on a YoY basis. For Dec’21 alone, the market returned –ve 1.1%MoM over uncertainty on tabling of “mini-budget” and SBP-amendment bill in order to revive the IMF program.
- Strong corporate profitability growth during CY21 largely remained unappreciated in the market as the factors such as i) COVID-19 rebound, ii) commodity prices boom, iii) dormant IMF program and iv) interest rate hikes dented investor sentiments.
- Average volumes throughout CY21 stood at 475mn shares, as opposed to 329mn shares over SPLY. Foreigners’ net sell stood at US$359mn during CY21, on top of CY20’s net sell of US$571.5mn. Consequently, the foreign ownership of PSX has contracted to 15% in CY21 as opposed to 20% in CY18.
- Market direction going forward will be determined by GoP’s ability to strike a deal with IMF in order to revive the dormant US$6.0bn EFF program. Delay in revival of the same will keep the market performance jittery and we may see some selling pressure in the market. Volumes are also likely to remain low as the investors may adopt a wait-and-see approach.
AKD Research
Pakistan Stock Exchange Limited is a Pakistan-based company, which is engaged in conducting, regulating and controlling the trade or business of buying, selling and dealing in shares, scripts, participation term certificates, modarba certificates, stocks, bonds, debentures stock, government papers, loans, and any other instruments and securities of similar nature, including, but not limited to, special national fund bonds, bearer national fund bonds, foreign exchange bearer certificates and documents of similar nature, issued by the Government of Pakistan or any other agency authorized by the Government of Pakistan. It provides a digitized marketplace where investors can buy and sell listed companies' common stocks and other securities. It facilitates capital formation, serving a range of participants, including individual and institutional investors, the trading community and listed companies. Its trading products include equities and cash settled futures.
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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