The Week in Review For the period Jun 25, 2018 – Jun 29, 2018

News This Week

Urea sales down in May

Forex reserves fall to USD16.2bn

FATF decides to keep Pakistan on 'grey list'

Profit repatriation soars 19%

Margins on petrol, diesel sales raised

International Steels emerges as biggest cold roller after kick-

starting new plant

E&P companies plan offshore drilling in January 2019

Private sector borrowing down 20%

Lucky achieves financial close for USD1bn coal power project

KSE-100 – Green despite being grey-listed

Stock Market Overview

The outgoing week started off on a negative note in anticipation of the crucial decision by FATF to place Pakistan in the grey list, consequently, the index shed 664pts on the first day of the week. However on weekly basis, the benchmark index closed in green at 41,911pts, up by 0.7%WoW. The announcement of placing Pakistan in the grey list failed to deteriorate market participation in this week as evident from ADT that increased by 6.8%WoW, however, ADTV decreased by 1.6%WoW. Foreigners continued their selling spree in this week as well with a net outflow of USD15.5mn.

EFUG, NCPL, PAKT, HASCOL and UNITY were the major gainers while CHCC, KTML, GLAXO, AGIL, and KAPCO were the major losers in

the benchmark KSE-100 this week.

REP 039 BIPL Securities Limited 5thFloor, Trade Centre, I.I. Chundrigar Road, Karachi 1

www.jamapunji.pk

Market Review

The outgoing week started off on a negative note in anticipation of the crucial decision by FATF to place Pakistan in the grey list, consequently, the index shed 664pts on the first day of the week. However on weekly basis, the benchmark index closed in green at 41,911pts, up by 0.7%WoW. The announcement of placing Pakistan in the grey list failed to deteriorate market participation in this week as evident from ADT that increased by 6.8%WoW, however, ADTV decreased by 1.6%WoW. Foreigners continued their selling spree in this week as well with a net outflow of USD15.5mn. During the week, NFDC released the latest numbers on urea offtakes that declined by 5%YoY, clocking in at 494k tons for May’18 taking the cumulative 5MCY18 volumes to 2.1mn MT, up by 29%YoY. Moreover, International Steels Limited commenced the production of its largest cold rolling mill having an annual capacity of 1.0mn MT. Additionally, the government increased the OMC margins for petrol and HSD to PKR2.64/ltr and PKR2.63/ltr, respectively. Furthermore, Lucky Electric Power Company achieved the financial close for its 660MW coal based power project that is anticipated to come online by Mar’21. On the macro front, central bank’s foreign exchange reserves decreased to USD9.7bn, down by USD602mn accredited to the official debt repayments. Also, foreign repatriation for 11MFY18 increased by 19%YoY to USD2.2bn with the highest outflow of USD329mn was witnessed in the telecommunication sector. Moreover, the private sector credit offtake for FY18 clocked in at PKR601bn in comparison to PKR748bn in SPLY, down by 20%YoY. Furthermore, as per sources, the FBR has made recoveries of USD46mn tax under the tax amnesty scheme till Jun 23, 2018 which is going to expire on Jun 30, 2018 but may be extended potentially.

Outlook This week marks the end of FY18 where the market will now begin to factor in the annual result expectations. However, economic troubles will continue to put weight on market performance.

KSE-100 – Green despite being grey-listed

Date Open High Low Close Change Vol (mn)

25-Jun-18 41,642 41,843 40,901 40,978 -1.6% 167

26-Jun-18 41,007 41,527 40,978 41,246 0.7% 180

27-Jun-18 41,281 41,817 41,246 41,718 1.1% 235

28-Jun-18 41,710 42,078 41,539 41,998 0.7% 160

29-Jun-18 41,999 42,082 41,750 41,911 -0.2% 166

2 2

3

News This Week

Economic highlights & Data points

Forex reserves fall to USD16.2bn| (The News): Pakistan’s foreign exchange reserves fell 3.3% to USD16.2bn during the week ended June 22, the central bank said on Thursday. The foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased USD602mn on weekly basis. FATF decides to keep Pakistan on 'grey list'| (The News): The Financial Action Task Force (FATF) on Thursday decided to keep Pakistan on its 'grey list'. According to details, Pakistan has fielded its interim Finance Minister Shamshad Akhtar to defend the country in Paris where the Financial Action Task Force is meeting. While pleading Pakistan's case to remove its name from FATF grey list, the minister apprised the anti-terror financing body of measures that country has taken to combat money laundering, terrorist financing and to eliminate the terrorism from its soil. Profit repatriation soars 19%| (Dawn): The outflow of profits and dividends on foreign investments from Pakistan has increased by over 19% to USD2.24bn in the 11MFY18. The State Bank of Pakistan reported on Wednesday that the outflow on foreign direct investment (FDI) rose over 26pc during July-May FY18; but the FDI decreased 1.3% during this period. The outflow of profits on foreign portfolio investment declined to USD291mn against USD346.7mn in the same period of last fiscal year. Private sector borrowing down 20%| (Dawn): The private sector credit off-take for FY18 stood at PKR601bn, down 19.65%, from PKR748bn in FY17, the State Bank of Pakistan released on Monday. The government which completed its tenure on May 31 had set the GDP target of 6%, however, with the passage of time doubts have emerged over the target. Outlook changed to negative: Moody’s affirms B3 deposit ratings of five banks| (BR): Moody's Investors Service has affirmed the long-term local-currency B3 deposit ratings of five Pakistani banks and changed the outlook to negative from stable. Moody's says that affected banks include Allied Bank Limited (ABL), Habib Bank Ltd (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Limited (UBL).

Sector and Corporate highlights

Lucky achieves financial close for USD1bn coal power project| (The News): Lucky Electric Power Company has achieved financial close for its Thar coal-based 660MW Lucky Electric Coal Power Project on Monday. International Steels emerges as biggest cold roller after kick-starting new plant| (The News): International Steels Limited has begun production from its new plant to emerge as the country’s biggest cold roller with one million tons of output capacity and to shed reliance on steel inbound shipments that account for 10% of the country’s imports. Margins on petrol, diesel sales raised| (Dawn): The government has notified increase in profit margins of Oil Marketing Companies (OMCs) and dealers by up to 10% on petrol and diesel sales effective from July 1. The regulator has been told that margin for OMCs on high-speed diesel (HSD) had been jacked up by 23 paisa to PKR2.64 per litre instead of PKR2.41. Petroleum Division also notified an increase of 9 paisa per litre for OMCs on petrol. As such, the OMC’s margin would go up to PKR2.64 per litre from PKR2.55. Urea sales down in May| (Nation): National Fertilizer Development Corporation (NFDC) released fertilizer numbers for May-2018, wherein local urea sales depicted a slight attrition of 5 percent YoY to clock-in at 494,000 tons, in-line with estimates.

4

Stock Market – Last week in pictorals

Chart 1: KSE-100 Index

Source: PSX

Chart 2: KSE Advance/Decline Ratio

Source: PSX

Chart 3: Pak Foreign Portfolio Flows (US$mn; US$=PKR115)

Source: NCCPL

Chart 4: KSE- Volumes & Values

Source: PSX

Chart 5: Price to Money Ratio

Source: NCCPL

Chart 6: Off market activity

Source: PSX

Economy Watch

Chart 7: Revenue Collection (PKRbn)

Source: SBP

Chart 8: Forex Reserves (US$mn)

Source: SBP

Chart 9: Import & Export (US$mn)

Source: SBP

Chart 10: Foreign Exchange Rate (PKR/US$)

Source: SBP

Chart 11: 6-mth T-Bill Yield (%)

Source: SBP

Chart 12: Yield Curve (%)

Source: SBP

5

Stock Market Synopsis Last week This Week %Change 1M 3M 12M

Mkt. Cap (US $ bn) 70.3 71.3 1.5% 76.6 81.2 90.6

Avg. Dly T/O (mn. shares) 170.1 181.6 6.8% 157.5 171.4 174.8

Avg. Dly T/O (US$ mn.) 61.2 60.2 -1.6% 60.0 64.9 74.5

No. of Trading Sessions 4.0 5.0 0.0 21.0 63.0 251.0

KSE 100 Index 41,637.4 41,910.9 0.7% 42,622.7 45,489.6 46,711.9

KSE ALL Share Index 30,152.3 30,582.9 1.4% 31,181.4 32,739.9 32,437.8

Chart 13: KSE-100 Active Issues (ADTO-million shares)

Source: PSX

Chart 14: KSE-100 Least Traded Issues (ADTO- shares)

Source: PSX

Chart 15: KSE-100 Top Gainer (% change)

Source: PSX

Chart 16: KSE-100 Top Losers (% change)

Source: PSX

6

Disclaimer

This research report is for information purposes only and does not constitute nor is it intended as an offer or solicitation for the purchase or sale of securities or other financial instruments. Neither the

information contained in this research report nor any future information made available with the subject matter contained herein will form the basis of any contract. Information and opinions contained

herein have been compiled or arrived at by BIPL Securities Limited from publicly available information and sources that BIPL Securities Limited believed to be reliable. Whilst every care has been taken in

preparing this research report, no research analyst, director, officer, employee, agent or adviser of any member of BIPL Securities Limited gives or makes any representation, warranty or undertaking,

whether express or implied, and accepts no responsibility or liability as to the reliability, accuracy or completeness of the information set out in this research report. Any responsibility or liability for any

information contained herein is expressly disclaimed. All information contained herein is subject to change at any time without notice. No member of BIPL Securities Limited has an obligation to update,

modify or amend this research report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or

subsequently becomes inaccurate, or if research on the subject company is withdrawn. Furthermore, past performance is not indicative of future results.

The investments and strategies discussed herein may not be suitable for all investors or any particular class of investor. Investors should make their own investment decisions using their own

independent advisors as they believe necessary and based upon their specific financial situations and investment objectives when investing. Investors should consult their independent advisors if they

have any doubts as to the applicability to their business or investment objectives of the information and the strategies discussed herein. This research report is being furnished to certain persons as

permitted by applicable law, and accordingly may not be reproduced or circulated to any other person without the prior written consent of a member of BIPL Securities Limited. This research report may

not be relied upon by any retail customers or person to whom this research report may not be provided by law. Unauthorized use or disclosure of this research report is strictly prohibited. Members of

BIPL Securities and/or their respective principals, directors, officers, and employees and their families may own, have positions or affect transactions in the securities or financial instruments referred

herein or in the investments of any issuers discussed herein, may engage in securities transactions in a manner inconsistent with the research contained in this research report and with respect to

securities or financial instruments covered by this research report, may sell to or buy from customers on a principal basis and may serve or act as director, placement agent, advisor or lender, or make a

market in, or may have been a manager or a co-manager of the most recent public offering in respect of any investments or issuers of such securities or financial instruments referenced in this research

report or may perform any other investment banking or other services for, or solicit investment banking or other business from any company mentioned in this research report. Investing in Pakistan

involves a high degree of risk and many persons, physical and legal, may be restricted from dealing in the securities market of Pakistan. Investors should perform their own due diligence before investing.

No part of the compensation of the authors of this research report was, is or will be directly or indirectly related to the specific recommendations or views contained in the research report. By accepting

this research report, you agree to be bound by the foregoing limitations.

BIPL Securities Limited and / or any of its affiliates, which operate outside Pakistan, do and seek to do business with the company(s) covered in this research document. Investors should consider this

research report as only a single factor in making their investment decision. BIPL Securities Limited prohibits research personnel from disclosing a recommendation, investment rating, or investment

thesis for review by an issuer/company prior to the publication of a research report containing such rating, recommendation or investment thesis.

BIPL Securities Limited endeavors to make all reasonable efforts to disseminate its publication to all eligible clients in a timely manner through either physical or electronic distribution such as mail, fax

and/or email. Nevertheless, not all clients may receive the material at the same time.

Disclaimers/Disclosures to US Investors

This investment research is distributed in the United States by BIPL Securities Limited (BIPLS), and in certain instances by Enclave Capital LLC (Enclave), a U.S.-registered broker-dealer, only to major U.S.

institutional investors, as defined in Rule 15a-6 promulgated under the U.S. Securities Exchange Act of 1934, as amended, and as interpreted by the staff of the U.S. Securit ies and Exchange Commission.

This investment research is not intended for use by any person or entity that is not a major U.S. institutional investor. If you have received a copy of this research and are not a major U.S. institutional

investor, you are instructed not to read, rely on or reproduce the contents hereof, and to destroy this research or return it to BIPLS or to Enclave. The analyst(s) preparing this report are employees of

BIPLS who are resident outside the United States and are not associated persons or employees of any U.S. registered broker-dealer. Therefore, the analyst(s) are not subject to Rule 2711 of the Financial

Industry Regulatory Authority (FINRA) or to Regulation AC adopted by the U.S. Securities and Exchange Commission (SEC) which among other things, restrict communications with a subject company,

public appearances and personal trading in securities by a research analyst. Any major U.S. institutional investor wishing to effect transactions in any securities referred to herein or options thereon

should do so by contacting a representative of Enclave. Enclave is a broker-dealer registered with the SEC and a member of FINRA and the Securities Investor Protection Corporation. Its address is 19

West 44th Street, Suite 1700, New York, NY 10036 and its telephone number is 646-454-8600. BIPLS is not affiliated with Enclave or any other U.S. registered broker-dealer.