Pakistan Strategy: Pakistan remains in the (more crowded) EM Club
- MSCI announced its May'19 semi-annual index review today (effective Jun 3, 2019) where Pakistan retained its position in the Emerging Market Index, getting assistance from buffer and index continuity factors.
- OGDC, HBL, and MCB continue to hold their position in the EM Standard Index whereas downgrades from Small Cap Index were Fauji Cement (FCCL), Fauji Fertilizer Bin Qasim (FFBL), and International Steels (ISL) takes the total number of domestic stocks in that index to ~18
- We believe Pakistan's meagre weight in the EM index (landing below ~0.03%) is unlikely to dither foreign inflows (FIPI: +US$54.3mn since Jan'19 vs. US$2.0mn in the same period last year) where investors are capitalizing on attractive valuations for a long-term horizon, incorporating potential near term weakness in the PkR as a potential dampener.
- Pakistan market has given a deafening response to the staff level agreement between the IMF and GoP for a US$6bn EFF, shedding 2.4% in a single day. We believe investors should adopt a wait and see approach as details of final IMF agreement and Budget FY20 comes through which could have significant bearing on market performance.
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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