AKD STOCK SMART
Weekly Review
Despite a peaceful end to the 21 day long sit-in that resulted in the Law Minister’s resignation, the market continued to reel under pressure, breaching 40k psychological bearer for the third time since Oct’17 but managed to close at 40,010pts (down 0.59%WoW, 238pts). Apart from challenges on the political front, investors chose to remain on the sidelines ahead of the MSCI rebalancing on Nov 30’17 with foreigners offloading US$39.54mn worth of equities during the week vs. net outflow of US$6.28mn in the previous week. That said, positive newsflow on the macro front (successful Eurobond/Sukuk issuance in the global market) led to some recovery towards the end of the week. Average daily trading volumes recovered to 129.91mn shares (+20.98%WoW) with volumes leaders including: 1) KEL (90.60mn shares), 2) TRG (62.15mn shares), 3) ENGRO (34.46mn shares), 4) ANL (25.51mn shares) and 5) SNGP (19.19mn shares). Key news flows impacting the market during the week included: 1) GoP raising US$2.5bn through issuance of 5-yr sukuk and 10-yr euro bond, where cut off yields were 5.625% and 6.875%, respectively, 2) Supreme Court started hearing NAB’s appeal regarding re-opening of the Hudaibiya Paper Mills case, 3) fertilizer off-take remaining strong as Rabi season kicked in, with Oct’17 urea/DAP clocking in at 375k/387k tons (+4%YoY/-19%YoY), 4) ECC approving additional sugar export quota of 1mn tons with a subsidy of PkR10.70/kg, 5) OGRA proposing a revised tariff for gas utilities where it seeks to apply the WACC based return on T&D networks (at 10.76/11.31% of their net regulated assets) instead of fixed ROA based returns previously. Performance wise, scrips leading the bourse were: 1) KEL (+5.16%WoW), 2) UBL (5.06%WoW), 3) ENGRO (3.39%WoW), 4) NBP (+2.82%) and 5) MCB (+1.75%WoW), while laggards included 1) PSMC (-5.8%WoW), 2) HASCOL (-4.69%WoW), 3) KAPCO (-4.39%WoW), 4) CHCC (-3.79%WoW) and 5) PPL (-3.38%).
Outlook
We expect market sentiments to improve going forward as the political uncertainty subsides following the end of ‘Dharna’ episode. The outcome of OPEC’s meet remains a key checkpoint for the market with the market participants widely anticipating an extension of the current arrangement. Also of key importance will be KEL’s tariff review hearing by NEPRA scheduled on Dec 05’17.
TRG Pakistan Limited is a holding company. The principal activity of the Company is to acquire, invest and manage operations relating to business process outsourcing, online customer acquisition, marketing of medicare related products, and contact center optimization services through its subsidiary, The Resource Group International Limited. It operates through four segments: call center, software and artificial intelligence business, medicare health insurance and market research. Its call center segment involves the provision of customer service support through telephone. Its Software and artificial intelligence (AI) segment provides optimized call outcomes for contact centers by pairing agents with callers based on behaviors and other related data. Its Medicare health insurance segment is engaged in marketing medicare insurance policies to senior citizens and other eligible individuals in the United States. Its market research segment provides analytical and consultation services.
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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