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BREXIT Tsunami hit the shores..............!!!!!

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#1
ahmedkhan

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    Britain has voted to leave the European Union, with the Leave campaign securing around 51.8 per cent of the vote. David Cameron, who will address the nation shortly, is now facing calls to resign as Prime Minister. While England voted overwhelmingly for Brexit, Scotland and Northern Ireland backed Remain. Statements are expected to be made by Sinn Fein and the SNP later today calling for a breakaway from the Union. London backed Remain but the turnout was lower than expected because of bad weather. The pound crashed to the lowest level since 1985 as sterling fell below $1.35. Complacency about a Brexit outcome will come clear this morning, as out of hours trading suggests that the FTSE 100 will drop by 8.8pc, or by some 560 points. The fall would be the third worst in history if stocks ended the day down as sharply.


    #2
    ishaq333

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    View Postahmedkhan, on 24 June 2016 - 11:27 AM, said:


    Britain has voted to leave the European Union, with the Leave campaign securing around 51.8 per cent of the vote.
    David Cameron, who will address the nation shortly, is now facing calls to resign as Prime Minister.
    While England voted overwhelmingly for Brexit, Scotland and Northern Ireland backed Remain. Statements are expected to be made by Sinn Fein and the SNP later today calling for a breakaway from the Union. London backed Remain but the turnout was lower than expected because of bad weather.
    The pound crashed to the lowest level since 1985 as sterling fell below $1.35. Complacency about a Brexit outcome will come clear this morning, as out of hours trading suggests that the FTSE 100 will drop by 8.8pc, or by some 560 points. The fall would be the third worst in history if stocks ended the day down as sharply.
    Kya lagta hai yahan sy market recover hojaye gi ya or dip lygi??????????????

    #3
    ahmedkhan

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    This kind of disasters are once in a life time and is definitely comparable to the economic crisis in 2009. But there is an opportunity in disguise to accumulate GEMS that you might not get at normal levels. Items with Goora holding will be worst hit as they will take away profit before it is gone. Overall all our market participants locally should not be afraid much once goora is out and market should recover as there is more opportunities for us as an exporter as UK will be standing in same queue as us now!!!!!

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    Kashif79

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    Both GATM and NML hit lower caps. The sentiment is that textile exports will take a hit. Not sure if this is knee-jerk reaction or backed by economics. Other shares like pharma, power and fertilizer should recover more easily.

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    ahmedkhan

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    AKD Daily

    Brexit: Keep calm and carry on!
    Accentuating concerns on global economic growth, the UK's historic decision to leave EU after 43 yrs of membership has triggered volatility in global financial and currency markets. In this regard, US$ has strengthened by 3.2% today while GBP and EUR have lost ~8% and ~3%, respectively. While bearing no direct implication on the local market, we feel indirect concerns on currency/commodity movements can keep select sectors (Oil, Textiles, Autos) under pressure. Driven primarily by risk-aversion sentiment, oil is already down by 6.4% while Yen vs. US$ has gained 4.9% subsequent to the referendum's outcome. Following the development, KSE-100 index has touched an intraday low of 1,392points tracking global equities. That said, while concerns in the form of a potential pull-out by foreign investors remain, we believe favorable local macros relative to the EM will restrict the downside. In this case, we advise investors to rebalance portfolios by focusing on stocks with attractive dividend yields such as PTC (14.6%), KAPCO (10.7%), HUBC ( 8.4%), UBL (7.6%) and FFC (6.9%).


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    ishaq333

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    Foundation Research

    Unexpected Brexit and its impact on Pakistan
    Event


    ; The British have unexpectedly opted to exit EU following today’s referendum. We believe the situation would heighten volatility in global currencies (at least in the near term) and thus, inducing risk-averse behavior by the global equity managers. Following suit of global financial markets, KSE100 plunged by 3.7% (1412pts) but subsequently recovered 597pts to close at 37,423pts.
    ; However, much would depend on the exit terms that would follow (Article 50 negotiations with a 2 year limit).


    Impact on Pakistan
    ; Direct implication of Brexit would be limited on Pakistan recovery story which primarily resides on domestic reform process pilloried on infrastructure investment, energy reforms and increased taxation base.


    ; There would be undoubtedly be a period of volatility as situation evolves in Europe (Netherlands/France/Germany may be next) that is to exert pressure on Pound and Euro and re-create the scenario of competitive currency devaluation that was recently seen last year. This may force risk-averse behavior and direct flows away from equity markets (particularly Emerging markets).

    ; However, there are many themes which are to positively effect Pakistan’s equity market which include
    o No rate hike anywhere in the world: Given current situation the global central banks would opt for accommodation and easing. Contrary to earlier expectation of rate hike based on hawkish fed stance. This should allow free flow of liquidity to equity markets and thus dilute the impact of currency volatility.
    o –ve for commodities and thus positively effecting Pakistan’s external and fiscal account: Uncertainty in Europe would curtail the recovery in the international oil prices (down 6% in a day) which would be boon rather than bane for Pakistan economic story.
    o Curtailed inflation and no rate hike in Pakistan: The global deflationary trend should reduce the inflation expectation and thus, prolong the prevailing lean interest rate scenario.
    o Loss of export to Europe but opportunity to focus on value addition: Weakness in Europe should adversely affect our exports (Europe constitute ~30%), but our exports are primarily basic in nature. Hence, we believe the export attrition should be minimal that would be more than compensated by lower import bill.
    Sectoral Impact


    ; As per our calculation, the event is negative ~22% of mkt cap while is neutral for the remaining 78%.

    ; –ve for textile (reduced export to Europe) and banks (lean interest rates to prolong)

    ; -ve for autos given Yen appreciation which is usually considered as a safe heaven.
    ; Non-event for E&P and OMCs given our conservative oil price assumption.
    ; Non-event for Fertilizers, Cements, Powers, Steel, Pharma and others.

    Edited by Mansoor, 24 June 2016 - 04:14 PM.
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