Power: IMF's prescription for power sector remains unused
The IMF in its latest country report continued to drive home the need for structural reforms around the power chain, particularly highlighting: 1) the persistence of circular debt accretion through 1HFY17, 2) IPOs of DISCOs and privatizations of public entities to curtail losses with private sector induced corporate governance and, 3) the need for improving the mechanism for passing on input cost adjustments to end consumers. Building on the said measures, the Fund foresees direct improvement in the short run (elimination of power deficit of 6GW and a boost in construction) with long run impacts to flow in the form of lower costs, better linkages and broader economic rebound. All this is possible with sufficient steps on the GoP's part in the form of better corporate governance and provision of an adequate platform for the development of private sector, with a tilt to raising export competitiveness. In light of the said investment outlook, HUBC remains our best pick with strong foothold in a variety of power projects. We arrive at a TP of PkR142.7/sh, which offers an upside of 23.2% with FY18F D/Y of 9.5%, BUY!
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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