Strategy: Implications of US pull-out on the market
Rising Middle East tensions cascade across regional risk metrics, having a pronounced impact on global commodity, trade and political developments. Contrary to policy recommendations, President Donald Trump's decision to pull-out from the P5+1 Joint Comprehensive Plan of Action ('Iran Deal') prove to have already pushed Crude benchmarks to three-year highs. From a domestic perspective, we assess the trade relationship with Iran, including its impact on global crude markets, followed by bilateral trade in other goods, which remains negligible. To that end, we probe into imposition of sanctions from the US treasury as a major roadblock to the execution of any energy supply projects (IP gas pipeline, possible expansion of electricity imports through Tavanir). As for implications on the equity landscape, we highlight macro-economic implications, largely from pressures imposed through higher global crude prices, weighing on an already weakening current account scenario deflating investor sentiments. For the meantime, we provide sensitivities to economic variables and E&P industry profitability to crude price variations, priming investors to seek attractive returns in upstream oil, hedged, low beta IPPs, while remaining upbeat on Banks (increase pace of rate hikes) and Fertilizers (higher offtake and prices).
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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