Stock Smart Weekly (Jun 25, 2021)
StockSmart
Weekly Review
KSE-100 remained range bound during the outgoing week as investors remained jittery regarding the FATF Plenary meeting which took place from 21st Jun’21 to 25th Jun’21 while uneasiness regarding ongoing talks with IMF continues to play on investors’ mind. KSE-100 closed the week at 47,603pts, down 1.3%WoW. Automobile Assemblers turned out to be among the outperformers, increasing by 0.28%WoW, led by PSMC as the stock rallied in anticipation of tax incentives offered to cars under 850cc being extended to cars under 1000cc as well. Cable and Electrical Goods also stood among the outperformers, increasing by 1.19%WoW as ongoing summer season is expected to uplift sales of the sector. Food and Personal Care products sector increased by 3.07%WoW as government took back the proposal to increase GST on dairy products. On other hand, Cement sector declined by 3.56%WoW as coal prices continue to increase, mounting pressure over margins. Major newsflow during the week included i) Prime Minister Imran Khan categorically stating that Pakistan would ‘absolutely not’ allow any bases and use of its territory for any sort of action inside Afghanistan, ii) Saudi Arabia agreeing to restart oil aid to Pakistan worth at least US$1.5bn annually in July, iii) Pakistan’s trade deficit during the first 11 months (July-May) of the current fiscal year 2020-21 reaching US$27.463bn as compared to US$21.065bn for 11MFY20, iv) Sui Southern Gas Company (SSGC) announcing that gas supply to non-export industries has been stopped, followed by 50% cut in supply to captive power plants, and v) Finance Minister Tarin saying that IMF has shown flexibility on demands. Average daily traded volume wise leaders included i) SILK (415.73mn shares), ii) WTL (387.96mn shares), iii) BYCO (153.07mn shares), iv) HUMNL (137.21mn shares), and v) TPL (130.44mn shares). Flow wise, individuals remained the major buyers with a net buy of USD13.7mn followed by Banks/DFI (net buy +USD12.9mn) while insurance stood on the other side with a net sell of USD12.8mn followed by mutual funds (net sell of USD7.35mn).
Outlook
Ongoing discussions with IMF regarding continuation of program and approval of Budget FY22 will continue to create noise for the market while FATF maintaining Pakistan on grey list will not have any significant bearing on the performance, in our view. Budget FY22 still remains to be passed from parliament and news items regarding Budget will continue to affect sector specific performance. Moreover, focus will also shift towards upcoming result season where we expect margin suppression for cyclical plays on the back of increased raw material costs however surprises could arise from players maintaining large (i.e. low cost) inventory.
AKD Research
Worldcall Telecom Limited is engaged in providing wireless local loop (WLL) and long distance international (LDI) services in Pakistan, and re-broadcasting international/national satellite/terrestrial wireless and cable television and radio signals, as well as interactive communication and to establish, maintain and operate the licensed telephony services. The Company's products/services include data, entertainment, voice and long distance international. The Company's data services include WorldCall Wireless Broadband and WorldCall Cable Broadband. The Company's entertainment services include WorldCall Digital television (TV), WorldCall Cable TV and WorldCall Video on Demand. The Company's voice service provides WorldCall Wireless Phone, which offers hassle-free wireless communication. The Company's LDI service provides voice and data solutions for national and international markets catering both to wholesale and retail segments.
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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