Pakistan Strategy: ETFs – an idea whose time has come, (AKD Daily, Sep 28, 2020)
AKD Daily
Pakistan Strategy: ETFs – an idea whose time has come
- Notable improvements in market liquidity furthered by a slew of macro/structural developments (drastic easing, limit on investments in savings schemes, Roshan digital account) have brought market mechanics back in focus, with the launch of Exchange Traded Funds (two already operational with another two launched today) the latest arrow in the quiver of PSX investment vehicles on offer for investors seeking equity exposure.
- Amongst the two operational ETFs, NIT ETF (NITG-ETF) provides exposure across all major sectors with Banks and E&Ps occupying c. 60.6% weight while UBL ETF (UBLP-ETF) does not include Oil companies and have greater representation of Banks and Fertilizers.
- With heavy weight sectors remaining largely ignored in the current rally, capital upside remains on the horizon which should translate into performance of NITG-ETF, in our view (W. Upside: 27.2%/ W.DY: 7.1%). The diversification benefit in an ETF further eliminates the systematic risks prevalent in individual stock investments.
- While ETFs are still in nascent stages in Pakistan, attracting low trading activity with avg. volumes since inception of 41K and 18K in case of NITPG and UBLP respectively, we believe it offers an appealing solution to expatriates/local individual investors willing to take exposure on Pakistan Market with benefits of liquidity and costs.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.