stocksmart pakistan weekly update - akd...

AKD Research [email protected]

+92-21-111-253-111

Weekly Review

The KSE-100 began the week with negative sentiment with government mulling over measures to contain rising cases of COVID-19, hinting a complete lockdown. To add, IMF hinting at government’s need to undertake unpopular measures (electricity and gas rate hikes, targeting higher tax collection, etc) to resume the IMF program further dampened the sentiments. Monetary policy announcement of interest rates maintained at 7% in scheduled MPC meeting, despite negative real interest rates, resulted in some exuberance among in-vestors. A rise in international oil prices on the back of mass availability of vaccines in 2021 brought interest in index heavy weight E&Ps in the remaining trading sessions, where profit taking in the last trading session pared some of the gains. KSE-100 index thus closed the week at 40,807 points, up 1.54% during the outgoing week. Average daily turnover during the week also increased 63.4% WoW to 279.8mn shares. Major newsflow during the out-going week included: (i) Pakistan secures $800m in debt relief from 14 members of the rich-est club of G-20 countries, as it still awaits ratification by remaining six countries, (ii) IMF talks focus on renewed tax thrust, (iii) Covid compels govt to shut educational institutions again, (iv) Policy rate kept unchanged at 7%, (v) IPPs refuse to accept Rs400bn proposed payment in three installments, (vi) government hints at increasing power, gas tariff in phas-es, and (vii) SBP’s forex reserves cross $13bn mark. Top performers in the outgoing week were, i) TRG (+15.9%WoW), ii) SYS (+10.9%WoW), iii) POL (+9.2%WoW), iv) PSX (+9.1%WoW), and v) LOTCHEM (+7.7%WoW), whereas laggards were, i) FCEPL (down 3.7%WoW), ii) IGIHL (down 4.2%WoW), iii) FFBL (down 4.9%WoW), iv) GATM (down 6.2%WoW), and v) SNGP (down 7.0%WoW).

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©2020 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-019

Find AKD research on Bloomberg

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

Developments on the IMF program resumption front (timing and scale of measures would be of utmost importance), the COVID-19 situation in home-ground (positivity ratio has in-creased to 7% vs. 4% in early Nov’20) and global crude oil price movements (OGRA sched-uled to meet on 30th Nov-1st Dec’20) are likely to sway the market sentiments, going for-ward. Resurgence in energy prices remain double edged sword, where interest in energy chain and banking sector likely to continue.

27 November 2020

Outlook

Top-5 Volume Leaders

Symbol Volume (mn)

UNITY : 158.76

TRG : 126.41

MLCF : 79.11

HASCOL : 66.42

HUMNL : 59.17

Source: PSX & AKD Research

Indic e s KSE- 10 0 KSE- 3 0

This week 40,807 17,160

Last week 40,187 16,903

Change 1.54% 1.52%

Indic e s KMI- 3 0 Allsha re

This week 65,732 28,720

Last week 64,010 28,274

2.69% 1.58%

Mkt Ca p. PkRbn US$ bn

This week 7,519 47.15

Last week 7,408 46.09

Avg. Da ily Turnove r ('mn sha re s)

This week 279.82

Last week 171.22

Change 63.4%


Index & Volume Chart KSE100 Gainers & Losers

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AKD Securities Limited

27 November 2020

StockSmart


This Week’s Daily Reports

2

Pakistan Auto: Cash-flows post strong recovery, (AKD Daily, Nov 27, 2020)

Presenting an updated cash flow position upon release of detailed financial accounts for auto OEMs we find aggressive normalization in industry CAPEX with the TTM total outlay of PkR5.64bn (down 21%QoQ/60%YoY) with PSMC/INDU/HCAR contributing 23/34/44%, where HCAR’s CAPEX outlay is an expected indication of model launch expectations.

The industry’s TTM topline/gross profit recovered from near bottom levels seen just last quar-ter but remaining lower by 33/48%QoQ where the growth in outgoing Sept’20 quarter was outsized (cumulative sales/gross profit up 2.9x/5.5xQoQ and up 33/62%YoY) showcasing resili-ence post COVID-19 driven business disruptions while a stable FX situation bolstered margins (industry GM at 6.3% for Sept’20 vs. 5.2% SPLY).

In terms of free-cash flows, normalized outflows are evident, with net working capital varia-tions improving under healthier order books stabilizing Net Working Capital outflows as the industry rationalized CAPEX (cumulative 2QCY20 CAPEX of PkR5.7bn down 21%QoQ/60%YoY)

A positive spillover of improved profitability and indication of continued order book health are the drastic decline in leverage levels, as OEMs (led by PSMC) reduce short term loans while benefiting from improved organic cash generation. INDU has filled its ST Invt. coffers back to the brim with current outstanding amount of PkR66.2bn higher than previous peak (PkR55.0bn on June’18) continuing to cushion payouts.

Pak Fertilizer: Low base effect leads to YoY increase in urea offtake, (AKD Daily, Nov 26, 2020)

As per the data released by the NFDC, urea offtake for Oct’20 increased 5/247% MoM/YoY to 413K tons. The significant uptick in offtake on YoY basis was due to low base effect. To recall, gas price hike of 62/31% for fertilizer feed/fuel effective from Jul’19 and consequent urea price hike in Sep’19 led to a pre-buying trend in preceding months (urea price hike was on hold, in anticipation of GIDC removal).

During 10MCY20, FATIMA led the pack with 55% YoY increase in urea offtake, followed by FFBL with 28% YoY higher urea offtake. The urea inventory at 671K tons has increased 44% MoM due to LNG supply to hitherto closed fertilizer plants, it still remains at 24% below its levels in the same period last year.

DAP offtake for Oct’20 remained flattish MoM, clocking in at 229K MT, however declined 15% YoY. This is due to lower imports of DAP on the back of an upsurge in international DAP prices. With EFERT and FFC shying away from expensive DAP imports, FFBL has come forth, ac-counting for 57% market share during Oct’20, up 15ppt YoY.

While phosphoric prices have recently seen an upward trend, we expect FFBL to remain at forefront in terms of DAP offtake, leading to profits on core business in 4QCY20. However, on the flipside, some of those gains are expected to be pared off by the budgetary measures dis-couraging sales to unregistered dealers.

Pakistan OMCs: Grey product weighs heavily on throughput, (AKD Daily, Nov 25, 2020)

Increase in volumes directly lifted throughput levels, with 3QCY20 retail volumes at 3.7mn tons, up 3.5%YoY largely due to a 10%YoY increase in HSD, however, sequential decline in re-tail fuels’ volume stood at 1.5% as influx of grey product affected HSD sales.

Company-wise, HASCOL / SHEL / APL /PSO delivered throughput levels of 487k / 558k / 466k /597k ltrs/outlet, moving +16.0%/+15.2%/-10.2%/-1.8%QoQ and +27.3%/-8.0%/-23.1%/+13.0%YoY taking total average industry throughput -3.2%QoQ/+4.8% YoY to 585k ltrs/outlet.

The effect of grey product appears more pronounced in sectoral breakup of sales where HSD sales from road segment stood at 89% in 3QCY20 against average at 91-92% previously. MS continues to be dominated by road segment, contributing ~99% of total sales.

APL (TP: PkR400.2/sh, 26.2% upside) continues to be the safe stalwart in the sector with high refinery upliftment guarding the company against fluctuating oil prices. PSO's investment case remains pinned to ‘reading the tea leaves’ on circular debt clearance following the Govt's agreement with IPPs (yet to be formalized), where a strong policy response can result in signifi-cant price performance.

Nov 24, 2020

Nov 27, 2020

Nov 26, 2020

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27 November 2020

StockSmart


This Week’s Daily Reports

3

MPS: IMF program resumption the key takeaway, (AKD Daily, Nov 24, 2020)

Monetary Policy Committee (MPC) of the SBP, in its meeting yesterday, expectedly decided to keep the policy rate unchanged at 7.0%. The status quo reflected the largely unchanged inflation outlook and risks to the nascent economic recovery from the recent surge in C19 caseload both domestically and globally.

In a subsequent analyst briefing, SBP Governor alluded towards a resumption of the pro-gram in the next few weeks, with the authorities closing the gap on the contentious issues. According to him, the authorities have reached a consensus on the scale of adjustments (both in fiscal and energy space); the timing of the same remains a key sticking point.

With a view that the IMF will be back by end of this year, we move up our adjustments for utility rates (20%/10% for electricity and gas) to Jan’21 (vs. Mar’21 previously), which will increase our average inflation estimate to 8.9% (vs. 8.7% previously). As a result, we expect monetary tightening cycle to begin soon with first rate hike of 50bps in Mar’21 (vs. May’21 previously).

From market’s vantage, kickstart of IMF’s program is a two pronged sword where initial euphoria on resumption may be tempered by possible upfront adjustments. At the same time, investors are likely to keep an eye on the unfolding Covid situation, however, with the country unlikely to enter a complete lockdown, market downside will likely remain limited.

Expect the market to depict a strong performance from Dec’20 onwards on anticipation of Covid vaccines being ready to use (Pfizer, Moderna, Astrazeneca) by mid-Dec onwards. We continue to like selective E&Ps (Brent at US$46.45), Banks (dividend resumption, interest rate tightening), Textiles (Exports

PSMC: Demand upcycle couldn’t come sooner, (AKD Daily, Nov 23, 2020)

Recent sales numbers reflect the resilient nature of domestic vehicle sales where, while the same cannot be said for PSMC’s numbers (10MCY20 cumulative sales volume dip of 53%YoY vs. 48% for PC sales), we find some saving grace in Oct’20 sales stabilizing their downslide (-13%YoY vs. CYTD avg. of -48%YoY with Alto sales up ~5%YoY).

Additionally, macro stability coupled with low interest rates are driving the start of another upcycle in vehicle sales, where we believe PSMC is likely to be a beneficiary, but may face significant hurdles from new entrants amid price sensitive consumers holding off on making major purchase decisions

In this backdrop we revise our sales estimates across the forecast horizon (unit sales CAGR over CY20-25 of 10.1% vs. 5.5% previously) while significantly shortening the path back to profitability (CY20/21 earnings raised by 30/65%) raising our DCF based TP to PkR180/sh.

We have built in the weak earnings outlook, reflected in tepid unit sales assumptions (~76K unit sales for CY21) with the slowdown in LCV sales expected to persist (Bolan/Ravi demand expected to rise 40%YoY but stay below 9K units respectively), where major policy incen-tives are hard to forecast (bulk orders could lend upside risks).


27 November 2020

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

SPOT Units 27-Nov-20 20-Nov-20 WoW CYTD

TRJ-CRB Points 160.5524 156.1625 2.81% -13.58%

Nymex (WTI) US$/bbl. 45.38 42.15 7.66% -25.68%

ICE Brent US$/bbl. 47.6 44.32 7.40% -28.33%

N. Gas Henry Hub US$/Mmbtu 2.23 2.19 1.83% 6.70%

Cotton USd/Pound 78.95 77.9 1.35% 0.77%

Gold US$/Tr.Oz 1807.11 1870.99 -3.41% 19.10%

Sliver US$/Tr.Oz 23.1969 24.1759 -4.05% 29.94%

Copper US$/MT 7387 7262.5 1.71% 20.13%

Platinum US$/Oz 962.87 950.4 1.31% -0.38%

Coal US$/MT 68.85 67.85 1.47% -13.61%

SPOT 27-Nov-20 20-Nov-20 Chg +/- WoW CYTD

Dollar Index 91.990 92.392 -0.402 -0.44% -4.56%

USD/PkR 159.432 160.714 -1.283 -0.80% 2.93%

USD/JPY 104.160 103.860 0.300 0.29% -4.10%

EUR/USD 1.192 1.186 0.007 0.57% 6.34%

GBP/USD 1.333 1.328 0.006 0.44% 0.57%

AUD/USD 0.737 0.730 0.007 0.97% 5.01%

NZD/USD 0.702 0.693 0.009 1.28% 4.12%

CHF/USD 0.908 0.911 -0.004 -0.41% -6.10%

CAD/USD 1.299 1.310 -0.010 -0.79% 0.02%

USD/KRW 1,103 1,114 -10.750 -0.96% -4.57%

CNY/USD 6.578 6.563 0.015 0.22% -5.54%

Country Bloomberg Code 27-Nov-20 20-Nov-20 WoW CYTD

Pakistan KSE100 Index 40,807 40,187 1.54% 0.2%

Srilanka CSEALL Index 6,181 6,085 1.58% 0.8%

Thailand SET Index 1,438 1,389 3.49% -9.0%

Indonesia JCI Index 5,783 5,572 3.80% -8.2%

Malaysia FBMKLCI Index 1,608 1,594 0.87% 1.2%

Philippines PCOMP Index 6,791 7,170 -5.28% -13.1%

Vietnam VNINDEX Index 1,010 990 2.04% 5.1%

Hong Kong HSI Index 26,895 26,452 1.68% -4.6%

Singapore FSSTI Index 2,856 2,813 1.52% -11.4%

Brazil IBX Index 46,734 44,978 3.91% -4.0%

India SENSEX Index 44,150 43,882 0.61% 7.0%

China SHCOMP Index 3,408 3,378 0.91% 11.7%

S&P SPX Index 3,630 3,558 2.03% 12.3%

DJIA INDU Index 29,872 29,263 2.08% 4.7%

NASDAQ Composite CCMP Index 12,094 11,855 2.02% 34.8%

UK UKX Index 6,331 6,351 -0.32% -16.1%

Germany DAX Index 13,317 13,137 1.37% 0.5%

Qatar DSM Index 10,290 10,108 1.81% -1.3%

Abu Dhabi ADSMI Index 4,972 4,914 1.18% -2.0%

Dubai DFMGI Index 2,420 2,316 4.49% -12.5%

Kuwait KWSEIDX Index 6,633 6,633 0.00% 0.0%

Oman MSM30 Index 3,624 3,628 -0.11% -9.0%

Saudi Arabia SASEIDX Index 8,693 8,578 1.34% 3.6%

MSCI EM MXEF Index 1,230 1,209 1.68% 10.3%

MSCI FM MXFM Index 547 541 1.04% -6.7%

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27 November 2020

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

Average PIB and E/Y differential

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

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KSE100

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(US$'000)

Ind., 2.69

Co., 3.38

Bank/DFI, (2.80)

NBFC, (0.04)

M.Funds, 1.29

Ins , 2.91

Others , 1.19

Prop. Trading

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AKD Securities Limited StockSmart


Market PER Chart 2021

27 November 2020

AKD Universe Valuations

Source: AKD Research

Market P/BVS Chart 2021


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27-Nov-20 2017 2018 2019 2020F 2021F

EPS (PkR) 5.74 6.38 7.58 7.77 9.00

EPS chg (%) (15.24) 11.08 18.79 2.57 15.83

EPS chg (%) ex-E&P (24.94) 6.38 (0.50) 4.80 17.30

Book Value per Share (PkR) 41.30 43.97 48.71 52.99 57.13

Payout (%) 55.32 49.54 42.51 33.82 43.86

Valuations

Price to Earnings (x) 9.03 8.17 7.28 7.56 6.72

PER (Ex-Banks & E&Ps) (x) 9.25 8.52 9.41 13.03 8.07

Price to Book (x) 1.25 1.18 1.07 0.98 0.91

Price to CF (x) 12.27 9.27 12.55 10.04 6.32

Earnings Yield (%) 11.07 12.24 13.73 13.22 14.89

Dividend Yield (%) 6.77 6.26 6.31 5.45 7.92

EV / EBITDA (x) 6.19 6.14 5.33 4.50 4.58

Profitability

Return on Equity (%) 13.90 14.50 15.55 13.14 12.91

Return on Assets (%) 2.25 2.29 2.45 2.09 2.04

Chg in Sales (%) 16.05 17.88 21.76 (1.39) (4.05)

Gross Margin (%) 35.96 35.12 34.06 34.08 36.41

Operating Margin (%) 24.85 24.38 24.00 23.06 24.42

Net Margin (%) 11.24 10.59 10.34 9.64 10.64

7



AKD Universe Active Coverage Cluster’s Valuations

27 November 2020


Stock Symbol Price TP Stance

(PkR) (PkR) 19A 20A/F 21F 19A 20A/F 21F 19A 20A/F 21F 19A 20A/F 21F

Automobile and Parts

Indus Motors INDU 1,151.34 1,375.00 Buy 174.49 64.88 74.68 6.60 17.75 15.42 2.26 2.20 1.93 10.0 2.6 2.6

Pak Suzuki Motors PSMC 185.22 180.00 Sell (35.45) (27.15) (2.71) n.a n.a n.a 0.59 0.64 0.65 - - -

Cements

DG Khan Cement DGKC 103.83 117.01 Neutral 3.67 (4.93) 7.40 28.26 n.a 14.03 0.64 0.67 0.64 1.0 - 1.4

Lucky Cement LUCK 648.63 761.30 Buy 32.44 10.34 29.70 20.00 62.73 21.84 2.22 2.11 1.93 1.0 - 0.9

Maple Leaf Cement MLCF 39.00 47.40 Buy 1.33 (4.40) 2.50 29.23 n.a 15.60 1.40 1.30 1.16 0.7 - 1.4

Fauji Cement Company FCCL 21.02 22.70 Neutral 2.05 (0.04) 1.80 10.27 n.a 11.68 1.39 1.46 1.43 7.1 - 5.5

Pioneer Cement Limited PIOC 90.49 64.18 Sell 3.48 (0.92) 1.85 26.01 n.a 48.93 1.54 1.69 1.63 - - 0.4

Cherat Cement Co CHCC 130.74 76.02 Sell 9.98 (9.74) 3.75 13.10 n.a 34.90 1.96 2.32 2.16 0.8 - 0.6

Engineering

Amreli Steels Ltd. ASTL 40.11 56.00 Buy 0.11 (3.79) 1.57 362.95 n.a 25.55 0.97 1.07 1.03 - - -

Fertilizers

Engro Corporation ENGRO 306.78 305.91 Neutral 28.69 37.83 46.50 10.69 8.11 6.60 0.90 0.78 0.68 7.8 9.8 9.8

Engro Fertilizers Limited EFERT 60.82 55.50 Sell 12.63 8.75 8.31 4.81 6.95 7.32 1.88 1.83 1.82 21.4 13.2 13.2

Fauji Fert. Bin Qasim FFBL 20.58 25.7 Buy (6.34) 0.57 2.40 n.a 36.11 8.58 3.89 2.14 1.71 - - -

Fauji Fertilizer Company FFC 104.12 127.00 Buy 13.45 15.17 16.07 7.74 6.86 6.48 3.72 3.34 2.96 10.4 11.5 11.5

Fatima Fertilizer FATIMA 28.35 34.43 Buy 5.75 5.98 4.67 4.93 4.74 6.07 0.81 0.73 0.68 7.1 8.3 6.5

Oil & Gas

Oil & Gas Development OGDC 99.60 172.20 Buy 27.53 23.27 20.72 3.62 4.28 4.81 0.68 0.61 0.57 11.0 6.8 6.8

Pak Oilfields POL 392.41 379.00 Sell 59.44 57.69 44.63 6.60 6.80 8.79 2.68 2.67 2.58 12.7 12.7 8.9

Pakistan Petroleum PPL 90.15 143.40 Buy 21.85 18.47 15.85 4.13 4.88 5.69 0.82 0.78 0.75 2.2 1.1 2.2

Hascol Petroleum HASCOL 14.20 UR UR - - - - - - - - - - - -

Attock Petroleum APL 321.36 400.35 Buy 39.79 10.13 29.73 8.08 31.72 10.81 1.69 1.72 1.54 6.2 2.8 5.6

Pakistan State Oil PSO 192.06 214.62 Buy 22.55 (13.77) 20.20 8.52 n.a 9.51 0.76 0.76 0.71 5.2 - 4.4

Power

Hub Power Co. HUBC 78.91 168.00 Buy 9.37 19.31 19.85 8.42 4.09 3.98 1.78 1.22 0.99 - - 8.9

K-Electric Co. KEL 3.76 UR UR - - - - - - - - - - - -

Kot Addu Power KAPCO 28.28 UR UR - - - - - - - - - - - -

Cable & Electrical Goods

Pak Elektron Ltd PAEL 32.39 37.37 Buy 1.68 0.09 2.66 19.28 360.18 12.18 0.53 0.52 0.51 - - 3.7

Personal Goods

Nishat Mills NML 90.22 132.00 Buy 9.97 11.00 13.38 9.05 8.20 6.74 0.48 0.46 0.44 4.4 4.4 3.6

Nishat Chunian Ltd. NCL 38.65 55.74 Buy 1.11 5.37 8.91 34.82 7.20 4.34 0.61 0.62 0.58 6.5 2.6 5.8

Banks

Allied Bank Limited ABL 83.95 88.90 Buy 12.65 13.91 11.29 6.64 6.04 7.44 0.82 0.79 0.78 9.5 10.7 10.7

Bank Al Habib BAHL 68.00 65.00 Sell 10.07 15.40 13.41 6.75 4.42 5.07 1.22 1.09 1.00 5.1 5.9 5.9

Bank AlFalah BAFL 34.63 40.59 Buy 7.34 6.49 6.20 4.72 5.33 5.59 0.69 0.60 0.56 11.6 11.6 11.6

Habib Bank Limited HBL 129.91 141.63 Neutral 10.45 22.66 23.62 12.43 5.73 5.50 0.85 0.72 0.68 3.8 4.6 5.4

Habib Metropolitn Bank HMB 36.90 45.70 Buy 6.34 9.63 8.46 5.82 3.83 4.36 0.81 0.70 0.64 6.8 6.8 6.8

MCB Bank Limited MCB 174.71 211.00 Buy 20.14 24.35 26.61 8.67 7.17 6.57 1.21 1.14 1.07 9.7 11.4 11.4

Meezan Bank Limited MEBL 93.84 100.00 Neutral 12.12 15.92 16.09 7.74 5.89 5.83 1.92 1.73 1.63 5.3 6.4 6.4

National Bank of NBP 40.01 45.60 Neutral 7.79 15.09 13.81 5.13 2.65 2.90 0.36 0.33 0.31 - - -

United Bank Limited UBL 118.67 138.68 Buy 15.60 16.29 18.74 7.61 7.28 6.33 0.76 0.68 0.64 10.1 10.1 10.1

The Bank Of Punjab BOP 8.89 13.90 Buy 3.12 2.60 2.20 2.85 3.42 4.04 0.50 0.46 0.44 8.4 11.2 11.2

UR - Under Review NML,NCL,PSO,DGKC, LUCK & MLCF - Unconsolidated

EPS(PkR) PE(x) PB(x) DY(%)

8


27 November 2020

StockSmart


AKD Universe Coverage Cluster’s Performance


Stocks Symbol Price 1 Year 1 Year

27-Nov-20 1M 3M 6M 12M CYTD High Low

KSE-100 Index 40,807.09 -1.4 -0.7 20.6 7.0 0.2 43,218.7 27,228.8

Automobile and Parts

Indus Motors INDU 1,151.34 -7.6 -14.1 17.4 -4.4 -0.9 1429.98 700.38

Pak Suzuki Motors PSMC 185.22 -10.5 -23.4 9.0 -14.5 -19.7 290.93 124.21

Cements

DG Khan Cement DGKC 103.83 -8.4 -5.7 24.5 47.4 39.8 117.63 50.05

Lucky Cement LUCK 648.63 -6.7 6.4 41.9 59.7 51.4 702.14 310.30

Maple Leaf Cement MLCF 39.00 -8.4 7.4 49.9 86.1 68.5 43.92 16.74

Fauji Cement Company FCCL 21.02 -2.1 -3.0 20.7 33.8 35.1 22.56 11.68

Pioneer Cement Limited PIOC 90.49 -10.5 -2.1 50.8 180.8 196.8 104.88 22.81

Cherat Cement Limited CHCC 130.74 -7.0 -4.8 53.5 160.2 146.4 146.30 45.52

Engineering

Amrel i Steel Ltd ASTL 40.11 -8.6 -19.6 15.6 2.9 11.0 53.46 21.28

Fertilizers

Engro Ferti l i zers Ltd. EFERT 60.82 -5.8 -2.5 -2.1 -12.3 -17.2 75.56 50.72

Engro Chemica l ENGRO 306.78 -3.0 2.2 2.7 -8.7 -11.1 366.00 237.65

Fatima Ferti l i zer FATIMA 28.35 -5.5 3.0 4.9 4.7 6.6 31.88 20.82

Fauji Fert. Bin Qas im Ltd. FFBL 20.58 -12.6 11.3 21.1 1.8 5.4 26.33 11.79

Fauji Ferti l i zer Company FFC 104.12 -3.7 -4.1 -4.3 -0.4 2.6 114.54 82.71

Cable & Electrical Goods

Pak Elektron Limited PAEL 32.39 -6.8 -7.5 43.0 27.5 19.7 40.37 16.62

Oil & Gas

Oi l & Gas Development OGDC 99.60 2.8 -13.9 -11.8 -24.2 -30.0 154.21 75.01

Pak Oi l fields POL 392.41 12.6 -9.4 21.4 -4.3 -12.2 473.43 241.11

Pakis tan Petroleum Ltd. PPL 90.15 4.8 -10.3 -4.1 -24.0 -34.3 151.82 69.13

Pakis tan State Oi l PSO 192.06 -6.8 0.3 19.1 9.2 0.2 216.54 113.98

Attock Petroleum Ltd. APL 321.36 -4.9 -10.5 18.3 -5.7 -13.1 394.43 211.87

Hascol Petroleum HASCOL 14.20 -9.4 -14.5 -1.9 -45.5 -47.2 31.22 10.65

Power

Hub Power Co. HUBC 78.91 -1.4 -7.1 1.8 -8.2 -15.5 103.21 57.40

K-Electric Limited KEL 3.76 -2.3 -3.1 21.3 -7.6 -14.0 4.77 2.65

Kot Addu Power Company KAPCO 28.28 0.0 -3.9 23.3 -16.2 -10.3 34.06 15.00

Personal Goods

Nisaht (Chunian) Ltd. NCL 38.65 3.4 -9.3 25.5 5.9 -9.4 47.63 23.78

Nishat Mi l l s NML 90.22 -6.1 -17.6 27.7 -6.0 -15.0 117.81 54.07

Banks

Al l ied Bank Limited ABL 83.95 -2.4 -3.5 16.4 -7.6 -12.2 104.71 66.82

Bank AlHabib Limited BAHL 68.00 0.1 3.7 24.6 -7.3 -12.4 82.00 50.98

Bank AlFa lah BAFL 34.63 3.7 0.1 17.9 -22.7 -24.2 52.99 28.79

Habib Bank Limited HBL 129.91 -3.9 -4.3 33.2 -7.7 -17.5 171.24 94.78

Bank of Punjab BOP 8.89 -4.0 -9.9 0.7 -19.3 -21.5 14.13 7.01

Habib Metropol i tan Bank HMB 36.90 -2.5 3.1 29.5 7.8 1.5 42.00 27.30

MCB Bank Limited MCB 174.71 2.4 0.6 16.6 -11.1 -14.8 224.53 132.89

Meezan Bank Limited MEBL 93.84 5.1 5.7 57.9 11.8 -1.4 106.21 55.66

National Bank of NBP 40.01 -2.6 8.2 49.3 -1.4 -7.6 46.30 25.53

United Bank Ltd UBL 118.67 1.2 -5.4 19.6 -23.2 -27.9 181.96 89.44

Absolute Performance (%)

9


27 November 2020

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20

Monetary Rates

T-Bills - 3M % 13.43 13.43 13.43 13.53 13.43 13.1 n.a n.a n.a n.a n.a n.a n.a



PIB 10Y % 11.3 11.35 11.09 11.04 11.18 10.16 8.47 8.25 8.61 8.83 9.41 9.58 9.96

KIBOR 6M % 13.08 13.48 13.5 11.23 13.23 12.34 12.08 7.75 7.58 6.79 7.2 7.29 7.09

Discount rate % 13.75 13.75 13.75 13.75 13.75 12.0 10.0 9.0 8.0 8.0 8.0 8.0 8.0

Policy rate % 13.25 13.25 13.25 13.25 13.25 11.0 9.0 8.0 7.0 7.0 7.0 7.0 7.0

Inflation

National CPI Inflation % 11.0 12.7 12.6 14.6 12.0 10.2 8.5 8.2 8.6 9.3 8.2 9.0 8.9

Core inflation (Urban) % 7.7 7.5 7.5 7.9 8.0 7.4 7.7 7.3 7.6 7.8 7.1 7.7 7.3

Core inflation (Rural) % 8.6 8.4 8.1 9.0 9.4 9.4 9.8 9.7 10.0 11.5 9.9 11.1 11.3

Food inflation (Urban) % 13.7 16.6 16.7 19.5 15.2 13.0 10.4 10.6 12.9 15.1 11.3 12.4 13.9

Food inflation (Rural) % 14.6 19.3 19.7 23.8 19.7 15.5 12.9 13.7 15.2 17.8 13.5 15.8 17.7

External Indicators

Export (PBS) US$ (mn) 2,024 2,011 1,993 1,970 2,140 1,814 957 1,396 1,599 2,001 1,584 1,889 2,081

Import (PBS) US$ (mn) 4,074 3,940 4,037 4,037 4,185 3,316 3,088 2,863 3,719 3,687 3,324 4,321 3,820

Trade Deficit (PBS) US$ (mn) (2,050) (1,929) (2,044) (2,067) (2,045) (1,502) (2,131) (1,467) (2,120) (1,686) (1,740) (2,432) (1,739)

Export (SBP) 2,189 2,111 2,108 2,052 1,993 1,820 1,407 1,259 1,582 1,897 1,510 1,951 1,969

Import (SBP) 3,632 3,682 3,791 3,912 3,563 3,321 3,140 2,800 3,559 3,555 3,237 3,818 3,466

Trade Deficit (SBP) (1,443) (1,571) (1,683) (1,860) (1,570) (1,501) (1,733) (1,541) (1,977) (1,658) (1,727) (1,867) (1,497)

Home Remittances US$ (mn) 2,001 1,820 2,097 1,907 1,825 1,894 1,790 1,873 2,466 2,768 2,095 2,284 2,284

Current Account US$ (mn) 70 (364) (367) (534) (210) (9) (530) 344 (96) 508 211 73 382

Banking Sector

Deposits PkR (bn) 13,912 14,312 14,632 14,673 14,815 15,126 14,476 15,481 16,229 16,122 16,327 16,886 16,664

Advances PkR (bn) 8,019 8,095 8,158 8,164 8,212 8,259 8,217 8,357 8,202 8,120 8,053 8,094 8,116

Investments PkR (bn) 7,918 7,886 8,801 8,366 8,725 9,297 9,794 10,382 10,681 10,809 10,869 11,090 10,942

W. A. lending rate % 13.52 12.74 12.73 13.35 13.23 13.01 11.18 10.75 10.08 8.94 8.72 8.26 9.09

W. A. deposit rate % 6.69 6.73 6.65 6.95 7.00 6.91 6.00 5.11 4.31 3.94 3.84 3.77 3.74

Spread rate % 6.83 6.01 6.08 6.40 6.23 6.10 5.18 5.65 5.77 5.00 4.88 4.49 5.35

Public Finance

Tax collection PkR (bn) 323.00 335.30 476.70 318.10 326.30 322.00 243.00 229.30 464.00 n.a n.a n.a n.a

Direct taxes PkR (bn) 105.40 102.80 227.40 112.60 107.70 137.10 82.70 84.70 213.40 n.a n.a n.a n.a

Indirect Taxes PkR (bn) 217.60 232.50 249.30 205.50 218.50 184.90 160.20 144.60 250.60 n.a n.a n.a n.a

Currency

Fx Reserves US$ (mn) 15,424 16,003 17,930 18,645 18,881 17,098 18,755 16,943 18,886 19,599 19,908 19,385 19,399

USDPkR - Interbank PkR/USD 156.04 155.40 155.01 154.74 154.34 159.02 164.43 160.58 165.53 166.87 167.95 166.02 162.82

10



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AKD Research Team

Analyst Tel no. E-mail Coverage

Usman Zahid +92 111 253 111 (693) [email protected] Executive Director Research

Ali Asghar Poonawala +92 111 253 111 (646) [email protected] E&Ps, Cable & Electrical & Automobiles

Hamza Kamal +92 111 253 111 (634) [email protected] Commercial Banks

Umer Farooq +92 111 253 111 (602) [email protected] Pakistan Economy, Textiles & Steel Sector

Shahrukh Saleem +92 111 253 111 (685) [email protected] Cement & OMCs Sector

AIlia Naeem +92 111 253 111 (603) [email protected] Fertilizer & Power Sector

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

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27 November 2020

New Rating Definitions

Buy > 14.5% expected total return (Rf: 8.5% + Rp: 6%)

Neutral > 8.5% to < 14.5% expected total return

Sell < 8.5% expected total return (Rf: 8.5%)

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