Pakistan Strategy: Gearing up for a 'happening' Ramadan
- Continuing to deal with macro weaknesses, solidified during results announcements prevalent over the month, the KSE-100 index shed 1,570pts in the process, closing at 36,784pts down 4.1%MoM.
- Amidst a federal cabinet shuffle where FM Asad Umer was replaced by Dr. Hafeez Sheikh who continued the current leg of IMF negotiations, while the introduction of the Asset Declaration Amnesty Scheme stalled.
- Volumes trended higher (KSE-100/All volumes average volumes +38/+33%MoM), typical of results season. Flows show selling being dominated by Mutual Funds (cumulative US$27.5mn outflow) moderated somewhat by US$16.1/13.5mn in buying from Companies/Banks, while FPI were net buyers (US$3.6mn)
- Sector-wise performance indicates investors pricing increased risk, where 30 of the KSE-100's 35 sectors weakened during the month, led by Pharmaceuticals (-20%MoM, on adverse regulatory actions), Cement (-10% on potential pricing indiscipline) and Energy chain constituents (OMCs/Power/E&Ps fell -8/-8/-6%MoM).
- Listless trading in May is furthered by Ramadan's reduced trading hours furthering the "sell in May and go away" phenomenon, negated to a great degree by possible entry into an IMF program, Budget FY20 and the bi-annual MSCI index review. We advocate building positions in macro-hedge plays showcasing relative resilience (OGDC, HUBC, MCB, MEBL) and event-based themes steeped in cheap valuations (PSO, LUCK).
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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