Stock Smart Weekly (Jan 22, 2021)
Weekly Review
KSE-100 remained volatile throughout the week, consolidating at 45,868pts after gaining 1,433pts or 3% month-to-date. Lackluster news on macro levels led to profit taking during the outgoing week, offsetting the result season driven exuberance. Major news included: (1) hike in Discos’ unified base tariff by PkR1.95/KWh vs. proposal of PkR3.34/KWh; Rs200bn impact calculated, indicating towards inflationary uptrend in upcoming months (2) decision to disconnect gas supply to captive power plants from Feb 01st and Mar 01st for industries and export oriented industries, respectively, encouraging industries to shift towards grid electricity (3) SBP kept policy rate unchanged at 7%, where MPC giving forward guidance commented monetary policy settings to remain unchanged in the near term as economy heads towards recovery phase, with inflation in FY21 expected to remain between 7% to 9% and, (4) a decline in FDI by 29% in 1HFY21. On sectoral basis, major highlights included: (1) six more IPPs including Lalpir, Pakgen, Engro, and Saif installed under 1994 and 2002 power policy initialed the Master Agreement (2) Pakistan approves Sinopharm and Astrazeneca corona vaccine for emergency use and, (3) POL products’ prices hiked - PkR3.20/litre for petrol and PkR2.95/litre for HSD. Average volumes declined 25%WoW to 509.81mn shares. Amongst major sectors, textiles led the pack with a gain of 6.8%WoW followed by Vanaspati & allied industries (+4.6%WoW) and technology (+3.2%WoW) whereas E&Ps (-2.4%WoW) and refineries (-3.6%) remained laggards. Top performers during the week were, i) SHFA (+12.6%WoW), ii) FCEPL (+11.2%WoW), iii) TRG (+10.8%WoW), iv) ICI (+10.6%WoW), and KTML (+7.9%WoW) whereas laggards were, i) FML (down 6.4%WoW), ii) GATM (down 6.2%WoW), iii) SHEL (down 5.8%WoW), and iv) BNWM (down 5.0%WoW).
Outlook
The market may carry forward the optimism of delay in interest rate upcycle towards the next week, where SBP’s forward guidance should provide comfort to the investors. Result season is expected to commence from the next week in full swing with major earnings announcement include FFBL, Attock Group (ACPL, APL, ATRL), HCAR, FFC and LUCK. Meanwhile, $2b cash facility from UAE and Saudia Arabia is expected to expire on 24th Jan’21, where a rollover (or lack of it) may also influence market sentiment.
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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