Pakistan Strategy: Trigger-hungry market awaits direction, (AKD Daily, Oct 01, 2019)
- Reversing persistent pressures on equity benchmarks, Sept’19 ended on an upswing with the KSE-100/All index pulling back by +8.1/+6.5%MoM where impetus for returns originated from furthered expectations of monetary cycle peaking and corporate earnings announcement kept activity levels higher (KSE-100/All volumes avg, +3.9/0.4%MoM).
- Foreign portfolio investors remained net sellers, offloading US$3.5mn in positions during the month, with net buys centered on Fertilizers (US$2.7mn) and Oil & Gas exploration (US$0.5mn), moderated by domestic participants, with individual investor (US$6.1mn) and other organizations (i.e. provident/pension funds, societies and trusts, US$13.3mn) furthering buying interest.
- October remains an exciting month for market participants, with external factor and investors beginning to align portfolios (before the end-of-year period) signified by the KSE-100 index being in the black, 8 times out of 10, while extraneous developments tend to make the month a water-shed moment for sentiments). Under these factors, we do not rule out possibility of this year’s market performance having a ‘left-tail skew’.
- With market expected to be jittery in the near-term, we advocate for longer-term positions to investors where our preferred sectors are Banks (HBL, UBL and BAFL on valuations with credit risks not yet visible), HUBC (Earnings growth and dividend yield) and NML (Diversified income, tilt towards value-added products, capacity expansions). That said, a key catalyst to near-term market performance would be the fund flow from ‘Mutual Funds & Others’ given potentially peaking of the interest rate cycle.
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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