Pakistan Strategy: Bad case of buy on rumors, sell on news, (AKD Daily, Feb 04, 2020)
Pakistan Strategy: Bad case of buy on rumors, sell on news
- Hastened expectations of economic revival and premature monetary easing pushed the benchmark index to a 19month high (43,219 on 13th Jan) during the first half of the month, paring back considerable gains over the second half (receding 3.8% from peak), closing up 2.2%MoM (+0.2%MoM for KSE-All) continuing a five month climb
- Average volumes followed a similar trend with KSE100/All volumes moving -13.3/-20.4%MoM where average traded value in the ready counter fell 20%MoM (US$59.8mn), while investors remained glued to mainboard scrips (KSE-100 share of ready volume averaged 68.8% vs. 63.2/70.6% in Dec’19/7MFY20)
- Inflows emanated from Banks (US$13.6mn), Mutual Funds (US$5.3mn) and FPI (US$2.8mn) while Individuals (US$22.7mn), and other organizations (US$4.2mn) were net sellers during the month, while TTM KSE-100 index volumes surpassed 28.3bn shares, its highest point in over 2yrs
- Sectors driving the index higher during the month were Banks (+5%MoM/+12%FYTD), Cements (+8%MoM/+16%FYTD), OMCs (+9%MoM/+19%FYTD), while a bifurcation of sector performance shows slips in E&Ps, Power and Fertz driving profit taking during the month
- Foreseeing significant risks to market performance, we advise investors to pursue profit-taking at attractive levels whereas staggered buying is advised in corrective mode. Positions should be build up in Banks (monetary easing cycle potentially delayed, strong results), and Textiles and IT (benefitting from Govt.’s intent on incentivizing export sectors).
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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