stocksmart pakistan weekly...

AKD Research [email protected]

Weekly Review

Benchmark index continued its bull run into the 2nd week post announcement of caretaker setup, closing at 43,948pts, up 2.41%WoW. Investor interest was spread across the sectors, with Banks, Oil & Gas & Cements rallying 4.1/1.6/2.8%. More specifically, both the gas utili-ties (SNGP & SSGC) gained 12.3/6.9%WoW as OGRA announced revised tariff regime (applicable from FY19). Under the revised formula, return on assets is now linked to a mar-ket based WACC calculation (resulting in 17.43% RoA for both the utilities in their bundled form), in turn providing clarity to investors over their future outlook. Volumes returned over perceived political calmness despite shorter Ramadan days, averaging 183.79mn vs. 119.05mn in the preceding week, up by 54%WoW where 1) BOP (153.87mn shares), 2) PAEL (55.58mn shares), 3) TRG (30.23mn shares), 4) PIBTL (29.57mn shares) and 5) SSGC (26.52mn shares) remained the volume leaders. Other key news flows impacting the market included: 1) Supreme Court suspending a Lahore High Court (LHC) judgment that annulled the new nomination papers, paving the way for timely election. 2) headline inflation for May’18 ticking up to 4.2%YoY as the impact of petroleum price hike and rupee depreciation became more visible, 3) World Bank revising down Pakistan’s GDP growth to 5% against officially envisaged target of 6.2% for FY19, citing adverse impact of tighter policies, and 4) Petroleum products sales reaching 2.45mn tons in May’18, up 31%MoM/1%YoY. Perfor-mance leaders in the AKD universe were: 1) UBL (+7.91%WoW), 2) HBL (+7.54%WoW), 3) BAFL (+6.28%WoW), 4) LUCK (+6.16%WoW) and 5) FATIMA (+5.11%WoW) while laggards included: 1) KEL (-3.01%WoW), 2) INDU (-2.66%WoW), 3) PSMC (-1.56%WoW), 4) NCL (-1.13%WoW) and 5) KAPCO (-0.49%WoW). Foreigners continued with their selling spree, offloading US$29.55mn worth of securities vs. US$17.45mn last week.

StockSmart

AKD Equity Research / Pakistan

Pakistan Weekly Update

Important disclosures including investment banking relationships and analyst certification at end of this report. AKD Securities does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision.

Important disclosures

Copyright©2018 AKD Securities Limited. All rights reserved. The information provided on this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject AKD Securities or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this document constitutes a solicitation or offer by AKD Securities or its affiliates to buy or sell any securities or provide any investment advice or service. AKD Securities does not warrant the accuracy of the information provided herein.

www.akdsecurities.net

AKD Securities

TREC Holder & Registered Broker

Pakistan Stock Exchange

REP-108

Find AKD research on Bloomberg

(AKDS<GO>), firstcall.com and Reuters Knowledge

Accountability court’s decision in graft references case (due on Jun 9’18) against the former PM Nawaz Sharif will be the most looked after event in the upcoming week. Although ac-countability court judge has asked for another extension in the due date, any decision against the former PM can dampen sentiments. Moreover, Pakistan will be submitting its action plan next week for a review by the FATF in its plenary meeting, scheduled to take place in France from June 24 to June 29. Developments on these fronts can keep investor interest at bay.

7 June 2018

Outlook

Index & Volume Chart

Source: PSX & AKD Research

Universe Gainers & Losers

43,268

43,703

44,144 43,948

42,800

43,000

43,200

43,400

43,600

43,800

44,000

44,200

44,400

-

50,000

100,000

150,000

200,000

250,000

4-Jun 5-Jun 6-Jun 7-Jun

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Top- 5 Volume Le a de rs

Symbol Volume (mn)

BOP : 153.87

PAEL : 55.58

TRG : 30.23

PIBTL : 29.57

SSGC : 26.52


Indices KSE-100 KSE-30

This w eek 43,948 21,664

Last w eek 42,913 20,991

Change 2.41% 3.21%

Indices KMI-30 Allshare

This w eek 74,495 31,872

Last w eek 73,051 31,401

Change 1.98% 1.50%

Mkt Cap. PkRbn US$bn

This w eek 9,037 78.17

Last w eek 8,908 77.05

Change 1.45% 1.45%

Avg. Daily Turnover ('mn shares)

This w eek 183.79

Last w eek 119.05

Change 54.39%

35,000

37,000

39,000

41,000

43,000

45,000

47,000

49,000

51,000

0

100

200

300

400

500

600

Jun-

17

Jul-1

7

Sep

-17

Oct

-17

No

v-1

7

Jan

-18

Feb

-18

Ap

r-1

8

May

-18

(Index)(share mn)

Volume (LHS) KSE-100 Index

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

UB

L

HBL

BA

FL

LUC

K

FATI

MA

KA

PCO

NC

L

PSM

C

IND

U

KEL

AKD Securities Limited

7 June 2018

StockSmart


This Week’s Daily Reports

2

Jun 06, 2018

PAEL: Multipliers come in all shapes & forms, (AKD Daily, Jun 07, 2018)

We initiate coverage on Pak Elektron Ltd (PAEL PA) with a Buy rating having a Dec'18 TP of

PkR51.70/sh. Rising consumer durable spending propagated by rapid urbanization and fa-

vorable demographics are slated to amplify White Goods purchases while distribution fo-

cused commercial energy CAPEX push power equipment demand. Both undergo upswings

from existing but undisciplined infrastructure and consumer durable consumption patterns

maintaining a long-term demand sweet-spot for PAEL. That said, we also highlight medium-

term competitive pressures in the appliance segment and public-sector governance risks as

weighing on earnings. Grounded in these, sturdy demand is forecasted with a 5-yr gross

sales forward CAGR of 19.5% (vs. ~16% during CY12-17A). However, passing-on the high

cost of directly imported materials (66% of total COGS) remains challenging in an environ-

ment where the currency is under pressure, translating into CY18-22F average GM of 27.4%

vs. 30.4% during CY14-17A. Resulting NPAT growth (5-yr forward CAGR of 12.7%) postures

for re-rating as the stock currently trades at a CY18/19F P/E of 6.3/5.1x and PEG ratio of

~0.26x. At current price level, the stock provides upside of 34.2%.

ASTL: Regulatory protection is here to stay, Maintain Buy, (AKD Daily, Jun 06, 2018)

Steel sector lost out 10.4% since commerce division on Mar 22'18 moved a proposal seeking

tariff rationalization on 515 items, including withdrawal of regulatory duty on certain steel

products in FY19 budget. Though no specific announcement was made regarding the said

proposal in the budget, market participants remained apprehensive due to lack of clarity in

this regard. In the latest development, the gov't issued amended statutory order (SRO #

640 (I) 2018), maintaining existing duty structure (in line with our earlier assertion, see our

report titled 'RD reduction is more bark than bite'). With regulatory protection being the key

especially in the backdrop of an ongoing expansionary cycle, we view clarity with regards to

regulatory regime as a positive that can potentially catalyze price performance in the sector

from hereon. Additionally, we revised down our FY18F/FY19F earnings estimate for ASTL by

3%/10% adjusting for 1) recent budgetary measures (continuation of super tax, additional

sales tax levy on electricity consumption), and 2) lower than expected utilization post late

commissioning of Dhabeji plant. Our revised Dec'18 TP of PkR135/sh (previously PkR138/sh)

offers 60% upside, Buy!

OMCs: Old habits die hard, (AKD Daily, Jun 05, 2018)

Seemingly touted as a last resort, consistently high power demand shortfalls in the face of

delayed on-boarding of new capacity meant reliance on FO, raising demand for the fuel by

+132%MoM/-1%YoY to 0.86mn tonnes, near historical averages. Consequently, total indus-

try sales for May'18 reached 2.45mn tonnes +31%MoM/+1%YoY where ex-FO total industry

sales were +7%YoY. Retail segments remained strong, with MOGAS/HSD sales at -2%/+15%

MoM and +4%/+2%YoY. Cumulative 11MFY18 volumes stood at 22.5mn tonnes was lower

by -4%YoY (+4% ex-FO sales), where growth in HSD (+9%YoY at 8.38mn tonnes) and MOGAS

(+9%YoY at 6.74mn tonnes already exceeding FY17 total) failed to bridge the gap left over

from FO's decline (-21%YoY, decline of ~1.7mn tonnes). Market shares during the period for

PSO/HASCOL/APL were 51.0/12.0/8.6% vs. 55.0/8.6/7.9% during 11MFY17.

Pakistan Cement: May'18 Dispatches Review, (AKD Daily, Jun 04, 2018)

After posting record high dispatches in previous months (reached a monthly peak of 4.65mn

tons in Mar'18), cement dispatches growth came into the red zone for the first time in FY18

owing to seasonal slowdown on arrival of Ramadan in May this year. As per provisional

statistics, total dispatches during May'18 declined by 13.8%MoM/1.5%YoY to 3.65mn tons,

primarily led by 14.0%MoM/4.5%YoY fall in domestic dispatches to 3.25mn tons. Exports on

the other hand, continue to recover, going up 32.2%YoY to 0.409mn tons in May'18. On a

cumulative basis, total dispatches growth reached 13.5%YoY in 11MFY18, significantly high-Source: PSX & AKD Research

Jun 05, 2018

Jun 07, 2018

Jun 04, 2018

44,060

44,093

44,126

44,159

44,192

44,225

44,258

44,291

44,324

44,357

9:1

5

9:3

8

10:0

2

10:2

6

10:4

9

11:1

3

11:3

6

12:0

0

43,600

43,677

43,754

43,831

43,908

43,985

44,062

44,139

44,216

9:1

4

9:3

8

10:0

2

10:2

5

10:4

9

11:1

2

11:3

6

11:5

9

12:2

3

12:4

7

13:1

0

13:3

4

13:5

7

43,100

43,177

43,254

43,331

43,408

43,485

43,562

43,639

43,716

43,793

9:1

4

9:3

9

10:0

4

10:2

9

10:5

3

11:1

8

11:4

3

12:0

8

12:3

2

12:5

7

13:2

2

13:4

7

42,700

42,766

42,832

42,898

42,964

43,030

43,096

43,162

43,228

43,294

9:1

4

9:3

9

10:0

4

10:2

9

10:5

3

11:1

8

11:4

3

12:0

7

12:3

2

12:5

7

13:2

1

13:4

6


7 June 2018

StockSmart


This Week’s Daily Reports

3

er than the 5.8%YoY growth witnessed in 11MFY17, primarily led by domestic demand

growth of 15.2%YoY. With the elections drawing close, we anticipate total dispatches to

remain on the higher side (despite seasonal slowdown in the month of Ramadan and eid

holidays) for the remainder of the year. We derive our thesis from: 1) strong PSDP and pro-

vincial spending in upcoming month ahead of national polls (32% unutilized federal PSDP at

the end of May'18) and 2) impressive growth in private sector credit related to construction

activity (+22.3%YoY in Apr'18). While risk of pricing indiscipline prevails with each expan-

sions (particularly for South players) coupled with higher coal prices, we believe recent ce-

ment price recovery (+PkR55/bag in North since Feb'18), offer attractive entry points espe-

cially when the sector has corrected 11.5% since May’18 . While maintaining our preference

for the sector (particularly North players), our top picks include well diversified, energy effi-

cient companies like LUCK (TP: PkR849/sh), MLCF (TP: PkR108/sh), PIOC (TP: PkR109/sh)

and DGKC (TP: PkR198/sh) in our Cement Universe.


7 June 2018

StockSmart


4

Commodities

International Major Currencies

Source: Bloomberg

Source: Bloomberg

Major World Indices’ Performance

Source: Bloomberg

TRJ-CRB Index

Source: Bloomberg

PkR/US$ Trend

Source: Bloomberg

Regional Valuations (2018)

Source: Bloomberg & AKD Universe

165

168

171

174

177

180

183

186

189

192

195

198

201

204

207

210

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-17

Nov-

17

Dec-

17

Jan-1

8

Feb

-18

Mar-

18

Apr-

18

May-

18

Jun-1

8

103.0

104.4

105.8

107.2

108.6

110.0

111.4

112.8

114.2

115.6

117.0

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-17

Nov-

17

Dec-

17

Jan-1

8

Feb

-18

Apr-

18

May-

18

Jun-1

8

SPOT Units 7-Jun-18 1-Jun-18 WoW CYTD

TRJ-CRB Points 199.0134 201.7099 -1.34% 2.66%

Nymex (WTI) US$/bbl. 64.91 65.81 -1.37% 7.43%

ICE Brent US$/bbl. 75.09 76.21 -1.47% 12.38%

N. Gas Henry Hub US$/Mmbtu 2.8409 2.93 -3.04% -19.74%

Cotton USd/Pound 97.5 100.7 -3.18% 8.82%

Gold US$/Tr.Oz 1298.41 1293.73 0.36% -0.36%

Sliver US$/Tr.Oz 16.741 16.41 2.02% -1.17%

Copper US$/MT 7211.25 6882.75 4.77% 0.06%

Platinum US$/Oz 906.74 904.15 0.29% -2.55%

Coal US$/MT 104.65 104.4 0.24% 9.93%

SPOT 7-Jun-18 1-Jun-18 Chg +/- WoW CYTD

Dollar Index 93.287 94.156 -0.869 -0.92% 1.26%

USD/PkR 115.619 115.615 0.004 0.00% 4.68%

USD/JPY 109.950 109.540 0.410 0.37% -2.43%

EUR/USD 1.182 1.166 0.016 1.40% -1.52%

GBP/USD 1.346 1.335 0.011 0.85% -0.39%

AUD/USD 0.765 0.757 0.008 1.10% -2.01%

NZD/USD 0.705 0.698 0.007 0.97% -0.68%

CHF/USD 0.981 0.988 -0.007 -0.73% 0.69%

CAD/USD 1.296 1.295 0.001 0.05% 3.07%

USD/KRW 1,069 1,075 -5.900 -0.55% -0.14%

CNY/USD 6.393 6.420 -0.027 -0.43% -1.75%

Country Bloomberg Code 7-Jun-18 1-Jun-18 WoW CYTD

Pakistan KSE100 Index 43,948 42,913 2.41% 8.6%

Srilanka CSEALL Index 6,365 6,401 -0.56% -0.1%

Thailand SET Index 1,736 1,720 0.91% -1.0%

Indonesia JCI Index 6,107 5,984 2.06% -3.9%

Malaysia FBMKLCI Index 1,786 1,756 1.68% -0.6%

Philippines PCOMP Index 7,803 7,630 2.27% -8.8%

Vietnam VNINDEX Index 1,037 993 4.41% 5.3%

Hong Kong HSI Index 31,513 30,493 3.34% 5.3%

Singapore FSSTI Index 3,473 3,428 1.33% 2.1%

Brazil IBX Index 31,351 31,825 -1.49% -0.8%

Russia RTSSTD Index 15,398 15,235 1.07% 12.6%

India SENSEX Index 35,540 35,227 0.89% 4.4%

S&P SPX Index 2,772 2,735 1.38% 3.7%

DJIA INDU Index 25,146 24,635 2.07% 1.7%

UK UKX Index 7,706 7,702 0.05% 0.2%

Germany DAX Index 12,856 12,724 1.03% -0.5%

Qatar DSM Index 9,258 8,881 4.26% 8.6%

Abu Dhabi ADSMI Index 4,657 4,605 1.13% 5.9%

Dubai DFMGI Index 3,037 2,964 2.47% -9.9%

Kuwait KWSEIDX Index 6,633 6,633 0.00% 3.5%

Oman MSM30 Index 4,597 4,607 -0.22% -8.9%

Saudi Arabia SASEIDX Index 8,319 8,161 1.93% 15.0%

MSCI EM MXEF Index 1,150 1,130 1.77% -0.7%

MSCI FM MXFM Index 595 577 3.00% -6.7%

EPS Growth PE(x)

Pakistan 15.96% 8.42

Indonesia 8.88% 14.56

Malaysia 11.61% 14.14

Philippines 6.71% 15.19

Vitenam 12.24% 15.84

India 20.88% 15.62

China 13.52% 10.74

% ROE Divd Yld

Pakistan 15.9% 6.10

Indonesia 15.28 2.41

Malaysia 10.39 3.57

Philippines 11.88 1.78

Vitenam 17.99 1.31

India 15.48 1.60

China 12.20 2.69

5


7 June 2018

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

Earnings Yield vs. T-Bill (12M) Differential

KSE-100 vs. MSCI-EM & MSCI-FM

-30%

-20%

-10%

0%

10%

20%

30%

Jun

-17

Jul-

17

Au

g-1

7

Se

p-1

7

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Fe

b-1

8

Mar

-18

May

-18

Jun

-18

KSE100 MSCI EM

MSCI FM

(12,814)

(8,718)

(7,651)

(365)

(14,000)

(12,000)

(10,000)

(8,000)

(6,000)

(4,000)

(2,000)

-

4-Jun-18 5-Jun-18 6-Jun-18 7-Jun-18

(US$'000)

-1.70

-1.30

-0.90

-0.50

-0.10

0.30

0.70

1.10

Jun

-17

Jul-

17

Au

g-17

Au

g-17

Sep

-17

Oct

-17

No

v-17

Dec

-17

Jan-

18

Feb

-18

Mar

-18

Ap

r-18

May

-18

Jun

-18

(%)

Ind., 4.93

Co., 6.99

Bank/DFI, 4.53

NBFC, 0.60

M.Funds, 4.11

Ins, 17.95

Others, (3.74)

Prop. Trading , (5.83) (10.00)

(5.00)

-

5.00

10.00

15.00

20.00

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

Jun-1

7

Jun-1

7

Jul-1

7

Aug-1

7

Aug-1

7

Sep-1

7

Sep-1

7

Oct

-17

Nov-1

7

Nov-1

7

Dec-1

7

Jan-1

8

Jan-1

8

Feb

-18

Feb

-18

Ma

r-1

8

Apr-

18

Apr-

18

Ma

y-18

Jun-1

8

-32%

-27%

-22%

-17%

-12%

-7%

-2%

3%

8%

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

May

-18

Jun

-18

KSE-All Share Index AKD Universe

6

AKD Securities Limited StockSmart


Market PER Chart 2018

Source: AKD Research

Market P/BVS Chart 2018



7 June 2018

Jul-0

7

Apr

-08

Jan-

09

Nov

-09

Aug

-10

May

-11

Mar

-12

Dec

-12

Sep-

13

Jul-1

4

Apr

-15

Jan-

16

Nov

-16

Aug

-17

Jun-

18

14.0

10.5

7.0

3.5

(x)

Jul-0

7

Apr

-08

Jan-

09

Nov

-09

Aug

-10

May

-11

Mar

-12

Dec

-12

Sep-

13

Jul-1

4

Apr

-15

Jan-

16

Nov

-16

Aug

-17

Jun-

18

2.5

2.0

1.5

1.0

(x)

AKD Universe Valuations

7-Jun-18 2015 2016 2017 2018F 2019F 2020F

EPS (PkR) 7.15 7.27 6.69 7.65 8.43 10.39

EPS chg (%) (0.88) 1.78 (7.96) 14.26 10.25 23.21

EPS chg (%) ex-E&P 19.34 18.73 (16.60) 11.76 11.00 32.76

Book Value per Share (PkR) 37.20 40.90 44.51 48.48 52.81 58.39

Payout (%) 51.63 49.86 50.20 52.33 51.39 44.54

Valuations

Price to Earnings (x) 9.22 9.06 9.84 8.61 7.81 6.34

PER (ex-E&P) (x) 9.06 7.63 9.15 8.19 7.38 5.56

Price to Book (x) 1.77 1.61 1.48 1.36 1.25 1.13

Price to CF (x) 13.23 10.52 12.80 8.89 9.20 7.87

Earnings Yield (%) 10.85 11.04 10.16 11.61 12.80 15.77

Dividend Yield (%) 5.60 5.50 5.10 6.07 6.58 7.02

EV / EBITDA (x) 6.32 6.73 6.87 6.68 5.94 5.67

Profitability

Return on Equity (%) 19.21 17.79 15.04 15.78 15.97 17.80

Return on Assets (%) 3.96 3.66 2.95 3.12 3.17 3.60

Chg in Sales (%) (8.10) (13.51) 17.52 10.30 11.19 8.86

Gross Margin (%) 28.71 33.02 35.23 35.64 35.45 35.26

Operating Margin (%) 19.51 21.84 25.04 25.62 25.59 25.42

Net Margin (%) 13.47 15.85 12.42 12.86 12.75 14.43

7



AKD Universe Active Coverage Cluster’s Valuations

7 June 2018

Source: AKD Research UR Under Review

Stock Symbol Price TP Stance EPS(PkR) PE(x) PB(x) DY(%)

(PkR) (PkR) 17 18F 19F 17 18F 19F 17 18F 19F 17 18F 19F

Automobile and Parts

Indus Motors INDU 1,518.55 2,191.48 Buy 165.41 188.74 199.71 9.18 8.05 7.60 3.83 3.25 2.80 7.57 7.77 8.23

Pak Suzuki Motors PSMC 449.85 610.01 Buy 46.49 44.38 59.03 9.68 10.14 7.62 1.25 1.17 1.06 4.13 4.00 5.34

Cements

DG Khan Cement DGKC 131.30 198.00 Buy 18.20 21.33 21.17 7.21 6.16 6.20 0.77 0.69 0.65 5.71 6.47 6.47

Lucky Cement LUCK 579.15 849.00 Buy 42.34 38.98 40.68 13.68 14.86 14.24 2.35 2.26 2.03 2.07 2.07 2.24

Maple Leaf Cement Factory MLCF 64.76 107.00 Buy 8.05 7.09 7.58 8.05 9.13 8.55 1.62 1.23 1.02 5.15 9.41 9.41

Fauji Cement Company Ltd. FCCL 25.49 39.00 Buy 1.89 2.59 3.22 13.46 9.85 7.91 1.79 1.70 1.60 3.53 7.85 9.81

Pioneer Cement Limited PIOC 51.34 109.00 Buy 12.84 9.04 10.54 4.00 5.68 4.87 0.95 0.89 0.82 10.71 9.74 11.69

Cherat Cement Co Limited CHCC 114.14 140.00 Buy 11.08 10.71 12.79 10.30 10.65 8.93 1.93 1.77 1.57 2.35 3.50 4.38

Gharibwal Cement Ltd GWLC 22.25 58.00 Buy 5.71 4.07 4.49 3.90 5.47 4.96 0.78 0.75 0.72 13.48 14.61 12.36

Cable & Electrical Goods

Pak Elektron Limited PAEL 39.78 51.70 Buy 6.65 6.08 7.57 5.98 6.25 5.02 0.73 0.65 0.61 6.79 6.32 7.89

Engineering

Amreli Steels Ltd. ASTL 82.12 135.00 Buy 3.62 4.68 11.88 22.71 17.55 6.91 2.19 1.94 1.57 2.44 2.44 6.09

Fertilizers

Engro Corporation ENGRO 309.86 348.84 Accumulate 20.47 21.56 27.91 15.14 14.37 11.10 1.96 1.93 1.86 6.78 6.45 7.10

Engro Fertilizers Limited EFERT 74.61 87.75 Accumulate 8.35 9.40 10.25 8.93 7.94 7.28 2.35 2.28 2.21 11.39 11.34 12.37

Fauji Fert. Bin Qasim Ltd. FFBL 39.22 48.10 Accumulate 2.03 2.60 2.79 19.28 15.08 14.05 2.73 2.52 2.35 2.17 5.31 5.69

Fauji Fertilizer Company FFC 97.82 96.86 Neutral 6.97 7.66 8.34 14.03 12.77 11.73 4.28 4.14 4.00 7.16 7.05 7.67

Fatima Fertilizer FATIMA 30.02 45.11 Buy 5.06 5.44 6.00 5.93 5.52 5.00 1.16 1.07 0.99 - 12.68 13.99

Food Producers

Engro Foods Limited EFOODS 97.53 84.20 Reduce 0.75 1.19 1.22 130.36 81.68 79.74 4.04 3.82 3.58 - - -

Oil & Gas

Oil & Gas Development Co. OGDC 162.36 192.00 Accumulate 14.83 18.23 18.25 10.94 8.91 8.90 1.35 1.23 1.13 3.70 4.00 4.00

Pak Oilfields POL 680.30 718.17 Accumulate 40.46 52.00 58.47 16.81 13.08 11.63 5.11 4.85 4.47 5.88 6.47 7.28

Pakistan Petroleum PPL 216.11 258.00 Accumulate 18.10 21.08 25.84 11.94 10.25 8.36 1.97 1.77 1.59 4.16 4.63 5.32

Hascol Petroleum HASCOL 314.63 317.69 Neutral 13.61 17.46 22.39 23.12 18.02 14.05 6.16 5.32 4.60 2.78 3.58 5.01

Attock Petroleum APL 609.60 724.84 Accumulate 63.89 73.88 80.18 9.54 8.25 7.60 3.10 2.97 2.83 6.97 10.66 11.48

Pakistan State Oil PSO 320.03 399.08 Buy 55.90 53.54 58.22 5.72 5.98 5.50 1.01 0.94 0.87 6.51 8.44 9.37

Power

Hub Power Co. HUBC 96.26 142.70 Buy 11.20 12.42 12.37 8.60 7.75 7.78 3.63 3.56 3.68 7.79 11.43 11.17

K-Electric Co. KEL 5.80 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 58.71 64.38 Accumulate 10.73 11.09 10.79 5.47 5.30 5.44 1.59 1.52 1.47 15.41 16.18 15.76

Fixed Line Telecommunication

Pakistan Telecommunication PTC 11.80 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Personal Goods

Nishat Mills NML 148.65 169.10 Accumulate 12.12 15.48 18.09 12.26 9.60 8.22 0.59 0.57 0.54 3.36 4.71 5.55

Nishat Chunian Ltd. NCL 49.88 57.15 Accumulate 6.75 5.48 7.60 7.39 9.11 6.56 1.00 0.95 0.86 5.51 4.51 6.01

Banks

Allied Bank Limited ABL 100.01 96.50 Neutral 11.95 13.01 14.62 8.37 7.69 6.84 1.07 1.01 0.94 7.00 8.00 9.00

Bank AlFalah BAFL 55.32 52.70 Reduce 5.33 5.44 5.98 10.38 10.17 9.26 1.34 1.17 1.05 2.69 1.79 2.69

Habib Bank Limited HBL 184.88 228.50 Buy 5.54 19.48 24.17 33.35 9.49 7.65 1.44 1.30 1.16 4.33 3.79 7.57

MCB Bank Limited MCB 213.32 242.60 Accumulate 18.53 20.18 23.66 11.51 10.57 9.01 1.61 1.51 1.44 7.50 7.50 7.97

National Bank of Pakistan NBP 49.85 68.90 Buy 8.60 9.08 10.46 5.79 5.49 4.76 0.53 0.52 0.49 - 11.03 17.05

United Bank Ltd UBL 182.47 249.49 Buy 21.39 19.25 24.65 8.53 9.48 7.40 1.28 1.22 1.15 7.12 7.67 7.67

8


7 June 2018

StockSmart


AKD Universe Coverage Cluster’s Performance


Stoc ks Symbol Pric e 1 Ye a r 1 Ye a r

7 - Jun- 18 1M 3 M 6 M 12 M CYTD High Low

KSE- 10 0 Inde x 4 3 ,9 4 8 .11 - 1.0 1.2 7 .1 - 12 .4 8 .6 5 2 ,8 6 9 .0 3 7 ,9 19 .4

Automobile a nd Pa rts

Indus Motors INDU 1518.55 - 13.8 - 14.1 - 13.0 - 23.2 - 9.6 1998.38 1556.59

Pak Suzuki Motors PSMC 449.85 - 7.0 - 6.3 - 17.3 - 49.4 - 9.6 903.91 436.74

Ce me nts

DG Khan Cement DGKC 131.30 - 7.0 - 14.9 - 6.7 - 44.4 - 1.8 244.74 112.74

Lucky Cement LUCK 579.15 - 8.4 - 9.3 12.0 - 33.0 11.9 961.51 445.80

Maple Leaf Cement Factory MLCF 64.76 - 3.4 - 11.6 - 7.4 - 44.2 - 5.4 118.54 63.05

Fauji Cement Company Ltd. FCCL 25.49 - 9.2 - 9.0 - 10.3 - 44.1 1.9 46.84 21.00

Pioneer Cement Limited PIOC 51.34 - 13.0 - 27.5 - 17.2 - 65.5 - 18.7 148.80 48.92

Cherat Cement Limited CHCC 114.14 - 8.6 - 14.9 14.4 - 38.3 2.9 189.33 88.50

Gharibwal Cement Limited GWLC 22.25 - 5.8 - 15.2 - 4.9 - 59.5 - 7.7 59.23 19.79

Engine e ring

Amreli Steel Ltd ASTL 82.12 0.4 - 12.9 - 6.0 - 38.4 - 11.4 137.97 74.95

Fe rtilize rs

Dawood Hercules DAWH 122.56 - 5.3 1.2 2.1 - 16.5 9.5 146.80 105.45

Engro Fertilizers Ltd. EFERT 74.61 0.4 8.1 11.8 38.4 10.2 74.90 51.90

Engro Chemical ENGRO 309.86 - 0.6 3.3 7.5 - 14.7 12.8 399.16 253.43

Fatima Fertilizer FATIMA 30.02 - 0.1 - 3.0 - 4.0 - 7.6 - 2.8 34.05 26.83

Fauji Fert. Bin Qasim Ltd. FFBL 39.22 - 6.9 6.5 16.9 - 15.6 10.4 50.05 32.17

Fauji Fertilizer Company FFC 97.82 - 1.6 13.7 18.7 4.5 23.7 102.02 70.07

Food Produc e rs

Engro Foods Limited EFOODS 97.53 1.1 7.0 13.7 - 30.6 21.4 159.24 70.19

Oil & Ga s

Oil & Gas Development Co. OGDC 162.36 - 1.5 - 1.6 - 0.1 - 0.6 - 0.3 186.53 133.69

Pak Oilfields POL 680.30 - 0.1 11.5 6.5 32.6 14.5 707.34 429.75

Pakistan Petroleum Ltd. PPL 216.11 - 0.3 7.5 8.5 25.2 5.0 217.32 143.73

Pakistan State Oil PSO 320.03 - 4.8 7.1 - 8.8 - 28.3 9.2 475.29 265.17

Attock Petroleum Ltd. APL 609.60 - 1.5 6.9 0.8 - 11.5 16.5 703.86 490.02

Hascol Petroleum HASCOL 314.63 2.5 13.9 13.6 - 15.3 27.4 389.41 211.63

Powe r

Hub Power Co. HUBC 96.26 - 4.7 - 1.6 - 9.0 - 22.4 5.8 133.30 89.90

K- Electric Limited KEL 5.80 - 11.6 - 7.8 8.6 - 22.0 - 8.1 7.91 5.34

Kot Addu Power Company KAPCO 58.71 - 1.4 - 3.6 - 10.9 - 21.6 8.9 77.46 49.39

Fixe d Line Te le c ommunic a tion

Pakistan Telecommunication PTC 11.80 - 2.6 - 3.3 - 9.0 - 24.8 - 9.6 16.22 11.54

Pe rsona l Goods

Nisaht (Chunian) Ltd. NCL 49.88 - 2.0 1.8 - 3.0 - 14.0 9.0 62.35 44.03

Nishat Mills NML 148.65 5.3 - 6.2 4.8 - 12.6 - 0.6 177.74 130.03

Ba nks

Allied Bank Limited ABL 100.01 0.0 6.7 25.0 5.6 17.7 102.51 76.72

Bank AlFalah BAFL 55.32 9.0 15.1 37.7 29.6 30.2 54.73 37.34

Habib Bank Limited HBL 184.88 3.9 - 10.5 11.5 - 31.5 10.6 305.48 152.41

MCB Bank Limited MCB 213.32 3.7 0.2 1.2 - 1.6 0.5 247.08 190.43

National Bank of Pakistan NBP 49.85 0.5 5.7 14.3 - 25.0 2.7 68.45 43.01

United Bank Ltd UBL 182.47 0.4 - 4.1 1.6 - 23.0 - 2.9 259.67 163.40

Absolute Pe rforma nc e (%)

9


7 June 2018

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

T-bill

3M % 5.85 5.85 5.85 5.85 5.99 5.99 5.99 6.21 6.26

6M % 5.90 5.90 5.90 5.90 6.01 6.01 6.01 n.a n.a

12M % 5.90 5.90 5.90 5.90 5.91 5.91 5.92 n.a n.a

PIB 10Y % 8.18 8.2 8.23 8.27 n.a n.a n.a n.a n.a

KIBOR 6M % 5.90 5.89 5.90 5.91 5.91 5.92 5.95 5.98 6.18

Discount rate % 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.5 6.5

Policy rate % 5.75 5.75 5.75 5.75 5.75 5.75 5.75 6.0 6.0

Inflation

Headline inflation % 3.9 2.9 3.4 3.9 3.8 4.0 4.6 4.4 3.8

Core inflation % 5.5 5.6 5.5 5.4 5.3 5.5 5.5 5.2 5.2

Food inflation % 2.4 (0.10) 1.3 2.4 2.2 2.4 3.8 3.7 2.2

External Indicators

Export (PBS) US$ (mn) 1,912 1,631 1,866 1,675 1,888 1,974 1,977 1,971 1,902

Import (PBS) US$ (mn) 4,534 4,835 4,952 4,473 4,929 4,898 4,910 5,607 4,797

Trade Deficit (PBS) US$ (mn) (2,622) (3,204) (3,086) (2,798) (3,041) (2,924) (2,933) (3,636) -2,895

Export (SBP) 1,865 1,828 2,104 2,194 2,380 2,546 2,464 2,111 n.a

Import (SBP) 5,054 4,720 4,262 4,712 5,258 5,346 5,140 4874 n.a

Trade Deficit (SBP) (3,189) (2,892) (2,158) (2,518) (2,878) (2,800) (2,676) (2,763) n.a

Home Remittances US$ (mn) 1,840 1,542 1,955 1,294 1,654 1,577 1,724 1,639 1,450

Current Account US$ (mn) (1,431) (2,051) (550) (1,097) (1,315) (1,441) (1,256) -1,617 n.a

Banking Sector

Deposits PkR (bn) 11,981 11,702 11,651 11,980 11,777 11,969 12,362 12,002 11,933

Advances PkR (bn) 6,176 6,028 6,035 6,137 6,151 6,280 6,530 6,556 6,629

Investments PkR (bn) 8,166 7,989 8,145 8,338 8,342 8,475 8,542 7,637 8,127

W. A. lending rate % 7.86 7.88 7.91 7.83 7.82 7.81 7.74 7.72 n.a

W. A. deposit rate % 2.84 2.91 2.93 2.93 2.91 2.91 2.89 2.89 n.a

Spread rate % 5.02 4.97 4.98 4.90 4.90 4.90 4.85 4.83 n.a

Public Finance

Tax collection PkR (mn) 511,449 413,212 474,560 642,068 541,120 547,902 841,472 n.a n.a

Direct taxes PkR (mn) 247,210 206,606 237,280 321,034 270,560 273,951 420,736 n.a n.a

Indirect Taxes PkR (mn) 264,239 206,606 237,280 321,034 270,560 273,951 420,736 n.a n.a

Currency

Fx Reserves US$ (mn) 21,402 20,223 20,401 19,775 19,584 18,774 20,154 18,957 18,413

USDPkR - Interbank PkR/USD 104.86 105.48 105.38 105.40 105.41 105.44 109.13 110.53 110.55

10



DISCLOSURES & DISCLAIMERS

This publication/communication or any portion hereof may not be reprinted, sold or redistributed without the written consent of AKD Securities Limited. AKD Securities Limited has produced this report for private circulation to professional and institutional clients only. The information, opinions and estimates herein are not directed at, or intended for distribution to or use by, any person or entity in any jurisdiction where doing so would be contrary to law or regulation or which would subject AKD Securities Limited to any additional registration or licensing requirement within such jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable and complied by our research department in good faith. Such information has not been independently verified and we make no representation or warranty as to its accuracy, completeness or correctness. Any opinions or estimates herein reflect the judgment of AKD Securities Limited at the date of this publication/ communication and are subject to change at any time without notice.

This report is not a solicitation or any offer to buy or sell any of the securities mentioned herein. It is for information purposes only and is not intended to provide professional, investment or any other type of advice or recommendation and does not take into account the particular invest-ment objectives, financial situation or needs of individual recipients. Before acting on any information in this publication/communication, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice. Neither AKD Securities Limited nor any of its affiliates or any other person connected with the company accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained therein.

Subject to any applicable laws and regulations, AKD Securities Limited, its affiliates or group companies or individuals connected with AKD Securities Limited may have used the information contained herein before publication and may have positions in, may from time to time pur-chase or sell or have a material interest in any of the securities mentioned or related securities or may currently or in future have or have had a relationship with, or may provide or have provided investment banking, capital markets and/or other services to, the entities referred to herein, their advisors and/or any other connected parties.

AKD Securities Limited (the company) or persons connected with it may from time to time have an investment banking or other relationship, including but not limited to, the participation or investment in commercial banking transaction (including loans) with some or all of the issuers mentioned therein, either for their own account or the account of their customers. Persons connected with the company may provide corporate finance and other services to the issuer of the securities mentioned herein, including the issuance of options on securities mentioned herein or any related investment and may make a purchase and/or sale of the securities or any related investment from time to time in the open market or otherwise, in each case either as principal or agent.

This document is being distributed in the United State solely to "major institutional investors" as defined in Rule 15a-6 under the U.S. Securities Exchange Act of 1934, and may not be furnished to any other person in the United States. Each U.S. person that receives this document by its acceptance hereof represents and agrees that it: is a "major institutional investor", as so defined; and understands the whole document. Any such person wishing to follow-up any of the information should do so by contacting a registered representative of AKD Securities Limited.

The securities discussed in this report may not be eligible for sale in some states in the U.S. or in some countries.

Any recipient, other than a U.S. recipient that wishes further information should contact the company.

This report may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose.

Analyst Certification We, the AKD Research Team, hereby individually & jointly certify that the views expressed in this research report accurately reflect our personal views about the subject securities and issuers. We also certify that no part of our compensation was, is,or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. We further certify that we do not have any beneficial holding of the specific securities that we have recommendations on in this report.

AKD Research Team

Analyst Tel no. E-mail Coverage

Umer Pervez +92 111 253 111 (693) [email protected] Executive Director Research & Business Development

Zoya Ahmed +92 111 253 111 (603) [email protected] Banks, Telecoms & Consumers

Haris Imtiaz +92 111 253 111 (639) [email protected] Economy

Ali Asghar Poonawala +92 111 253 111 (646) [email protected] OMCs & Automobiles

Waqas Imdad Ali +92 111 253 111 (634) [email protected] Cements & Fertilizer

M.Daniyal Kanani +92 111 253 111 (602) [email protected] Oil & Gas & Power

Umer Farooq +92 111 253 111 (637) [email protected] Textiles & Steel

Bilal Ahsan Elahi +92 111 253 111 (685) [email protected] Automobiles

Qasim Anwar +92 111 253 111 (680) [email protected] Technical Analysis

Nasir Khan +92 111 253 111 (639) [email protected] Research Production

Tariq Mehmood +92 111 253 111 (643) [email protected] Library Operations

7 June 2018

stocksmart pakistan weekly...

Documents