Pakistan Strategy :Economic Reality : Better than it seems
Economic Reality — Better than it seems
Cue the naysayers – the below numbers speak all, not myth or fiction, but pure quantifiable data. The PTI’s performance contrasts favorably with both its predecessors the PML-N and the PPP, yet faces the unique situation of relentless criticism. The government has caught itself juggling different aspects, where finding the sweet spot between austerity and growth remains a key challenge. Economic uncertainty, delays in legislation and flip flops on decision making are some of PTI’s biggest challenges and have manifested in an economic slowdown with demand subsiding. The country’s benchmark index, a barometer of economic performance, has suffered as a consequence with the KSE-100 down 13% since Aug’18 and participation at record low levels. The key question remains whether the steps undertaken are enough or more needs to be done. We believe in the former where the worst may potentially be behind. An IMF program entry, albeit delayed, may serve as the catalyst with Budget’20 holding further sway while pace of currency and interest rate adjustments may begin to wane. From market’s vantage, while near term outlook appears tricky, we believe staggered buying in lieu of pent up valuations (P/E: 7.9x, P/B: 1.19x, D/Y: 7.7%) ala a buy and hold strategy should be adopted, keeping in view a two year horizon. Our preferred plays tread towards the Banking and Energy sectors where top picks include MCB, MEBL, HUBC and OGDC.
(Detailed report to be released soon)
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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