AKD Securities Limited Equity Research – Daily Report

Karachi, November 01, 2018 (PPI-OT): Pakistan Market: Oct’18 Green shoots of recovery

KSE-100 Index reprieved in Oct’18, posting a gain of 1.6%MoM to close at 41649.36pts after falling for two consecutive months. Successful diplomacy by PM in Saudi Arabia that resulted in Saudis approving US$6bn package was the sentiment changer with a similar package expected to be announced by China.

Short term performance is dependent on the package from China and happenings in the domestic politics where any upward rally could be short-lived as we approach IMF. Hence, we advise investors to book profits and switch to fundamental themes. That said, prospects are bright over the longer term as entry into an IMF program would bring stability on the macroeconomic front.

Foreigners continued to be the net sellers in Oct’18, disposing off US$86.3mn worth of equities in line with EM market sell-off (Cumulative CY18TD sell-off: US$408.7mn). Major selling was witnessed in Commercial Banks (US$44.2mn, the 6th continuous month of selling).

Despite the disappointing results, sector performance was led by Cements and Commercial Banks, fuelled by cheaper valuation. Oil and Gas and Automobile sector retreated amid lower oil prices and concerns over margin erosion respectively.

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AKD Securities Limited Equity Research – Daily Report

Karachi, November 01, 2018 (PPI-OT): Pakistan Market: Oct’18 Green shoots of recovery

KSE-100 Index reprieved in Oct’18, posting a gain of 1.6%MoM to close at 41649.36pts after falling for two consecutive months. Successful diplomacy by PM in Saudi Arabia that resulted in Saudis approving US$6bn package was the sentiment changer with a similar package expected to be announced by China.

Short term performance is dependent on the package from China and happenings in the domestic politics where any upward rally could be short-lived as we approach IMF. Hence, we advise investors to book profits and switch to fundamental themes. That said, prospects are bright over the longer term as entry into an IMF program would bring stability on the macroeconomic front.

Foreigners continued to be the net sellers in Oct’18, disposing off US$86.3mn worth of equities in line with EM market sell-off (Cumulative CY18TD sell-off: US$408.7mn). Major selling was witnessed in Commercial Banks (US$44.2mn, the 6th continuous month of selling).

Despite the disappointing results, sector performance was led by Cements and Commercial Banks, fuelled by cheaper valuation. Oil and Gas and Automobile sector retreated amid lower oil prices and concerns over margin erosion respectively.

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