Pakistan Strategy: Fear & Loathing' in November'18
- Troubling macro backdrop stifled investor sentiment, pulling the benchmark KSE-100 index down 2.8%MoM, to close at 40,496pts, marking a period of consistent softness in equity markets (-0.5%/-3.4% CYTD/FYTD).
- Absence of concrete developments with regards to arranging external finances (bi-lateral or with the IMF), coupled with PkR weakness (resulting inflationary pressures), MSCI rebalancing and rising cost of borrowing (425bps hike CYTD) rattled investors
- The shaky end to Nov'18 brings macros back to center stage, where the 150bps hike (higher than consensus of 100bps) coupled with PkR volatility (touching 143 but closing at 139.05 vs the US$ on Friday) will impose fundamental economic indicators (SPI, CPI, trade figures, credit offtake) on all aspects of capital markets.
- Somewhat encouraging are recent policy shifts which aid the GoP in mending fences with the IMF, as the pace at which macro-adjustments are to be made was the major point of contention in reaching the staff-level agreement, where we expect monetary tightening to continue (150bps hike during CY19) albeit at a slower pace.
- Dampeners aside, upsides over the medium term are likely to be event-driven in nature, with positive developments on foreign funding (oil funding arrangement with UAE, Chinese 'investments' materializing), IMF negotiations and GoP policy plan implementation (energy sector payment, tax reforms) could stymie bearish sentiment.
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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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