Pakistan Strategy: FY19 closes with more questions than answers,
- A mediocre June'19 brought FY20 to close on shaky ground (KSE-100/All indices slipped 19.1/18.3%YoY), showcasing the worst equity market performance in a decade, while volumes compressed and a flight to blue-chip KSE-100 mainboard plays gathered steam.
- 4QFY19 witnessed the KSE-100/All indices posting declines of 11.6/10.8%QoQ, their worst showing since 2QFY09 (-36/-34%QoQ for KSE-100/All) as growing uncertainty over the operational outlook for ancillary sectors furthered investor preference for mainboard stocks, as individual investor participation remained the only plus point in an otherwise strained flows picture.
- Negotiations concerning medium term external support with the IMF, passing of a strict Budget FY20, FATF plenary consultations, and MSCI reviews achieved a conclusive note (arguably kicking the can downhill) where new sources of macro risk emerged (PkR's unabated decline vs. US$)
- Despite mounting challenges and inflationary pressures necessitating further monetary tightening, the case for period gains is hard to rule out. Our scale of preference is tilted towards MCB, MEBL, and BAHL (as we like to balance interest rate exposure to provisioning risks), OGDC and PPL (exchange rate hedge, PPL to also benefit from improved liquidity in energy chain), and HUBC, NPL, NCPL, PSO.
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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