Pakistan Strategy: Mirage of risks cloud sentiment
- Rounding out an active week filled with a range of macro reads (positive on CAD improvements), coupled with the additional breathing space provided by FATF plenary (delaying any action by four months) and earnings announcements (broadly in-line with expectations), investor sentiments remain geared to pricing increased volatility
- In terms of external developments, the FATF plenary has kept Pakistan in the Grey List for an extended period up to Feb, 2020, (in-line with our expectations) proclaiming a stern warning of blacklisting if it fails to comply on 27 action plans.
- Macro indicators both on the external and domestic front show a marked improvement , with CAD for Sept’19 narrowing 80%YoY and overall budget balance shrinking to 1.1% of GDP vs. 1.9% of GDP a year earlier.
- Investors must navigate a tight-rope with upsides largely limited to individual sectors and contingent on lenient GoP policy actions, whereas dampeners in the form of the FATF’s receptiveness to stated compliance reforms are to remain in the limelight. Amidst major “headline risks” an improving macro-backdrop holds long term positive for market performance (smooth sailing through IMF EFF review). We re-iterate our liking for selected Banks (MEBL, UBL), Oil & Gas (PSO, PPL, OGDC) and HUBC with any downward momentum opening lucrative entry points, in our view.
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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