stocksmart pakistan weekly update -...

AKD Research [email protected]

+92-21-111-253-111

Weekly Review

Breaking its last five week negative momentum (where benchmark index lost 6.7% or 2,790pts), market came back strongly into green zone mid-week to close the KSE-100 index at 39,471 (up 2.13%WoW or 825pts). Broad base recovery in the market was led by strong performance of Steel & Cement sector alongwith the positive development regarding intro-duction of Category B in PSX to eligible more companies (28-30) for margin trading system (MTS). Average daily traded volumes improved slightly by 2.31%WoW to 138.18mn shares with 1) TRG (63.99mn shares), 2) WTL (43.26mn shares), 3) KEL (35.87mn shares), 4) DSFL (31.50mn shares) and 5) LOTCHEM (27.10mn shares) leading the board. Key news flows impacting the market during the week included: 1) the Senate passing delimitation of con-stituencies bill paving the way for timely election, 2) Nawaz Sharif nominating his brother (Punjab CM Shahbaz Sharif) as the candidate for the prime minister in the next general elec-tions, 3) World Bank approving a loan amounting US$825mn to modernize the national power transmission system and improve health and education service delivery in Pakistan, 4) country's CAD widening by 90.7%YoY to reach US$6.43bn in 5MFY18, where both export/imports witnessed upward trend, rising 12%/23.4%YoY to US$9.79bn/US$21.88bn and 5) United Motors revealing its plan to launch 800cc car and pickup in co-operation with Chi-nese bike maker-‘United Auto Industries”. Performance leaders during the week were: 1) UBL (+10.8%WoW), 2) HBL (+7.2%WoW), 3) NBP (+7.2%WoW), 4) FATIMA (+6.9%WoW) and 5) BAFL (+5.8%WoW); while laggards included: 1) POL (-4.4%WoW), 2) GWLC (-4.3%WoW), 3) HUBC (-2.5%WoW), 3) APL (-1.9%WoW) and 5) DGKC (-1.6%WoW). Foreign participation remained in the negative zone with US$5.44mn outflows compared to US$8.87mn outflows in the preceding 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©2017 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

Renewed optimism in the local bourse on the back of, 1) SECP initiative to increase compa-nies eligible for MTS with the introduction of category B, 2) positive development on the political front and 3) stable int’l oil prices expected to drive bullish momentum in the week ahead as well. Moreover, market may also continue to take cue from fund managers' year-end window dressing ahead of the New Year.

22 December 2017

Outlook

Index & Volume Chart

Source: PSX & AKD Research

Universe Gainers & Losers

38,384 37,919

38,208

38,716

39,471

37,520

37,820

38,120

38,420

38,720

39,020

39,320

39,620

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

18-Dec 19-Dec 20-Dec 21-Dec 22-Dec

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Indices KSE-100 KSE-30

This w eek 39,471 19,779

Last w eek 38,646 19,280

Change 2.13% 2.58%

Indices KMI-30 Allshare

This w eek 66,658 29,042

Last w eek 66,325 28,636

Change 0.50% 1.42%

Mkt Cap. PkRbn US$bn

This w eek 8,360 75.72

Last w eek 8,242 74.64

Change 1.42% 1.45%

Avg. Daily Turnover ('mn shares)

This w eek 138.18

Last w eek 135.07

Change 2.31%

Top-5 Volume Leaders

Symbol Volume (mn)

TRG : 63.99

WTL : 43.26

KEL : 35.87

DSFL : 31.50

LOTCHEM : 27.10

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

UBL

HBL

NBP

FATI

MA

BAFL

DGK

C

APL

HUB

C

GW

LC

POL


33,000

35,000

37,000

39,000

41,000

43,000

45,000

47,000

49,000

51,000

53,000

-50

50

150

250

350

450

550

650

750

850

950

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun-

17

Jul-1

7

Au

g-17

Au

g-17

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

(Index)(share mn)

Volume (LHS) KSE-100 Index

AKD Securities Limited

22 December 2017

StockSmart


This Week’s Daily Reports

2

Dec 21, 2017

Pakistan Textiles: Sector update Nov'17, (AKD Daily, Dec 22, 2017)

Sustaining its upward momentum, Pakistan's total exports during Nov'17 registered an en-couraging growth of 12.35%YoY/4.56%MoM to stand at US$1.97bn where both textile (up 7.45%YoY) and food exports (up 22.19%YoY) witnessed an upward trend. A likely impact of increase in final product prices, textile exports maintained its recovering trend in Nov'17, rising 7.45%YoY to reach US$1.12bn. Segment wise, value added-segment once again led the exports growth, up 11.6%YoY to reach US$826mn, while low value-added segment re-mained under pressure, declining 2.6%YoY to US$264mn. On a cumulative basis, textile exports during 5MFY18 increased 7.6%YoY to reach US$5.51bn largely supported by recov-ery in final product prices. Going forward, we expect textile exports to grow by 7.5% in FY18, where recent rupee depreciation coupled with approval of 50% unconditional export subsidy are expected to drive exports growth.

Regulatory environment remained conducive in CY17, (AKD Daily, Dec 21, 2017)

Playing a prominent role in market's performance during the year, regulatory developments in CY17 have been of key importance. Reviewing the same, key sectors benefitting from various policy actions taken in CY17 included: 1) Textiles - GoP announcing PM's export package offering various incentives to the export sector, 2) Fertilizers - extension of the fertilizer subsidy alongwith allowance of urea exports, 3) Steel - duty imposition (AD of 19.04/24.04/19.15% on imported CRC/billets/re-bars) providing competitive edge to local players, 4) Oil&Gas Exploration - revision in wellhead gas prices under PP12 and 5) OMCs- increase in margins of MS and HSD deregulation was a positive. While significant additions to generation capacity were made, operational sustainability of the power sector (particularly FO based plants) came under pressure with the GoP announcing abrupt closure of FO power plants towards end CY17. Spillover impact of the same was also seen in Refin-eries, OMCs and Exploration sectors in terms of lower offtake.Going forward, populism is likely to dictate GoP's policy directives as elections draw nearer. In this regard, we can see extension of current subsidies to sectors like Fertilizers and Textiles while additional incen-tives to gain electoral ground cannot be ruled out.

Pakistan Cements: Update on ongoing expansionary cycle, (AKD Daily, Dec 20, 2017)

Being the second of the ongoing pandemic expansion cycle (first in the south region), LUCK has successfully commissioned its brownfield expansion of 1.30mtpa at Karachi plant. This should be followed by a 1.2mtpa brownfield expansion of ACPL (expected COD: Dec'17) and 2.80mtpa Greenfield expansion of DGKC (expected COD: 1QFY19) at Hub, Baluchistan. Post completion of the first expansionary phase (5.30mtpa) in South, capacity utilization in the region/total industry is expected to drop at 57%/82% by 1QFY19 from 93%/86% in FY17, assuming demand growth of 8%. Consequently, this is likely to create significant supply side pressures, therefore, exerting pricing pressure over the short term, where the prices have so far remained stable (contrary to North region where cement prices declined by 6.5% since Jun'17). On the other hand, out of the ten announced expansions in North (totaling 19.6mtpa), only 5 have been able to achieve financial close so far (totaling 9.30mtpa). Ac-cordingly, we see the pace of expansion to be gradual in North with additions coming online in a phased manner - the first expansion is expected to achieve its COD in 4QFY19. This should allow prices in the North region to stabilize at current levels as capacity utilization is anticipated to hover around 90% in the next 4yrs. In the context of the ongoing expansion-ary cycle, we prefer cement players with exposure in the Northern region including LUCK, MLCF, PIOC and CHCC.

Power: Debt vs Devaluation, who's the winner, (AKD Daily, Dec 19, 2017)

Recent policy changes by the federal govt. have clear spillovers for IPPs - lowering their load factors in the short term while casting uncertainty over the long term performance and outlook of the power chain. While recent devaluation bodes well for the sector in general (5% additional deval leads to 5.3/8.3% uptick in HUBC/KAPCO earnings), we highlight that their payout streams solely depend on cash flow disbursements from the power purchaser (GoP through NTDC & WAPDA) to the entire energy chain. With outstanding receivables of


Dec 20, 2017

Dec 22, 2017

Dec 19, 2017

Dec 18, 2017

38,600

38,700

38,800

38,900

39,000

39,100

39,200

39,300

39,400

39,500

39,600

9:1

4

9:4

3

10:1

2

10:4

0

11:0

9

11:3

7

12:0

6

12:3

4

13:0

2

13:3

0

13:5

8

14:2

6

14:5

5

15:2

3

15:5

2

17:4

0

38,000

38,100

38,200

38,300

38,400

38,500

38,600

38,700

38,800

38,900

9:3

0

9:5

3

10:1

7

10:4

1

11:0

4

11:2

8

11:5

2

12:1

5

12:3

9

13:0

2

13:2

6

13:5

0

14:1

3

14:3

7

15:0

1

15:2

5

37,800

37,877

37,954

38,031

38,108

38,185

38,262

38,339

38,416

9:3

0

9:5

4

10:1

9

10:4

4

11:0

9

11:3

3

11:5

8

12:2

3

12:4

8

13:1

2

13:3

7

14:0

2

14:2

7

14:5

1

15:1

6

37,600

37,700

37,800

37,900

38,000

38,100

38,200

38,300

38,400

38,500

9:3

0

9:5

4

10:1

9

10:4

4

11:0

9

11:3

3

11:5

8

12:2

3

12:4

8

13:1

2

13:3

7

14:0

2

14:2

7

14:5

1

15:1

6

38,300

38,344

38,388

38,432

38,476

38,520

38,564

38,608

38,652

38,696

9:3

0

9:5

4

10:1

9

10:4

4

11:0

8

11:3

3

11:5

8

12:2

2

12:4

7

13:1

2

13:3

6

14:0

1

14:2

6

14:5

0

15:1

5


22 December 2017

StockSmart


This Week’s Daily Reports

3

HUBC/KAPCO standing at PkR72.21/80.13bn for 1QFY18 (adding PkR5.8bn/3.2bn FYTD), honoring the capacity payments remains key to sustained payouts for investors. Also, since both IPPs are classified as relatively inefficient (on FO basis for KAPCO), GoP might as well plan to run them at significantly lower load factors (less than annual 50%). This will in-turn create a burden on the total cost of generation (CPP+EPP) as mandatory capacity payments will be paid for HUBC/KAPCO as well as other plants which have been commissioned.

OMCs: Devaluation to erode profits, (AKD Daily, Dec 18, 2017)

For the OMC sector at large, abrupt closure of RFO fired power plants being for the greater part of November (due to environmental concerns) meant reduced sales. Additionally, since ~63% of FO is imported, OMCs with large market shares (PSO/APL/HASCOL have 11MCY17 FO market shares of 74/7/7%) were exposed to charges resulting from delaying import of RFO (demurrage). These developments have cast uncertainty over the OMC chain and fu-ture of the RFO POL segment (~35% of overall industry volumes are made up by FO, still the largest segment by volumes), leading the sector down 5.5% during November. For the PSO and HASCOL winter has come early, where earnings are expected to face strong headwinds from reduced FO sales as well as sizeable devaluation of the PkR against US$. For the wider industry, questions marks over propensity to consume following expected hiking of POL product prices from Jan'18, headwinds to margins from loss booked on import shipments and reliance on foreign borrowing could keep investor interest subdued.


22 December 2017

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 (2017)

Source: Bloomberg & AKD Universe

165

168

171

174

177

180

183

186

189

192

195

198

Dec-

16

Jan-1

7

Feb

-17

Mar-

17

Apr-

17

May-

17

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-17

Nov-

17

Dec-

17

104.0

105.0

106.0

107.0

108.0

109.0

110.0

111.0

Dec-

16

Jan-1

7

Feb

-17

Mar-

17

Apr-

17

May-

17

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-17

Nov-

17

Dec-

17

SPOT Units 22-Dec-17 15-Dec-17 WoW CYTD

TRJ-CRB Points 187.736 184.5239 1.74% -2.48%

Nymex (WTI) US$/bbl. 58.09 57.3 1.38% 8.13%

ICE Brent US$/bbl. 64.42 63.8 0.97% 16.26%

N. Gas Henry Hub US$/Mmbtu 2.6021 2.6202 -0.69% -29.33%

Cotton USd/Pound 86.5 85.9 0.70% 8.94%

Gold US$/Tr.Oz 1268.86 1255.45 1.07% 10.12%

Sliver US$/Tr.Oz 16.2114 16.0705 0.88% 1.84%

Copper US$/MT 7043 6855 2.74% 27.52%

Platinum US$/Oz 917.7 894.5 2.59% 1.57%

Coal US$/MT 94.4 91.5 3.17% 12.72%

SPOT 22-Dec-17 15-Dec-17 Chg +/- WoW CYTD

Dollar Index 93.381 93.932 -0.551 -0.59% -9.06%

USD/PkR 110.300 110.100 0.200 0.18% 5.22%

USD/JPY 113.390 112.600 0.790 0.70% -2.70%

EUR/USD 1.185 1.175 0.010 0.88% 12.98%

GBP/USD 1.337 1.332 0.005 0.37% 9.04%

AUD/USD 0.772 0.765 0.007 0.95% 6.93%

NZD/USD 0.701 0.699 0.002 0.29% 0.69%

CHF/USD 0.989 0.991 -0.001 -0.14% -3.31%

CAD/USD 1.271 1.287 -0.015 -1.18% -5.84%

USD/KRW 1,080 1,089 -9.680 -0.89% -10.61%

CNY/USD 6.576 6.609 -0.033 -0.51% -5.47%

Country Bloomberg Code 22-Dec-17 15-Dec-17 WoW CYTD

Pakistan KSE100 Index 39,471 38,646 2.13% -17.4%

Srilanka CSEALL Index 6,324 6,352 -0.45% 1.5%

Thailand SET Index 1,742 1,718 1.42% 12.9%

Indonesia JCI Index 6,221 6,119 1.66% 17.5%

Malaysia FBMKLCI Index 1,760 1,753 0.41% 7.2%

Philippines PCOMP Index 8,432 8,337 1.14% 23.3%

Vietnam VNINDEX Index 952 935 1.83% 43.2%

Hong Kong HSI Index 29,578 28,848 2.53% 34.4%

Singapore FSSTI Index 3,386 3,417 -0.91% 17.5%

Brazil IBX Index 31,038 30,042 3.32% 25.2%

Russia RTSSTD Index 13,661 13,950 -2.08% -7.3%

India SENSEX Index 33,940 33,463 1.43% 27.5%

S&P SPX Index 2,685 2,676 0.33% 19.9%

DJIA INDU Index 24,782 24,652 0.53% 25.4%

UK UKX Index 7,611 7,491 1.61% 6.6%

Germany DAX Index 13,081 13,104 -0.17% 13.9%

Qatar DSM Index 8,621 8,212 4.99% -17.4%

Abu Dhabi ADSMI Index 4,349 4,339 0.23% -4.3%

Dubai DFMGI Index 3,365 3,355 0.29% -4.7%

Kuwait KWSEIDX Index 6,414 6,332 1.30% 11.6%

Oman MSM30 Index 5,063 5,062 0.03% -12.4%

Saudi Arabia SASEIDX Index 7,210 7,076 1.89% 0.0%

MSCI EM MXEF Index 1,134 1,119 1.42% 31.6%

MSCI FM MXFM Index 635 626 1.45% 27.2%

EPS Growth PE(x)

Pakistan 18% 7.69

Indonesia 11% 15.72

Malaysia 12% 16.03

Philippines 7% 15.42

Vitenam 12% 18.39

India 28% 17.44

China 13% 12.88

% ROE Divd Yld

Pakistan 15.7% 7.06

Indonesia 15.04 2.30

Malaysia 10.31 3.41

Philippines 12.14 1.54

Vitenam 16.49 1.91

India 15.48 1.53

China 11.53 2.22

5


22 December 2017

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%

40%

50%

Dec

-16

Jan-

17

Feb

-17

Mar

-17

Ap

r-17

May

-17

Jun

-17

Jul-

17

Au

g-17

Au

g-17

Sep

-17

Oct

-17

No

v-17

Dec

-17

KSE100 MSCI EM

MSCI FM

964

(979)

(2,464)

(3,229)

(7,387) (7,970)

(6,970)

(5,970)

(4,970)

(3,970)

(2,970)

(1,970)

(970)

30

1,030

2,030

18-Dec-17 19-Dec-17 20-Dec-17 21-Dec-17 22-Dec-17

(US$'000)

-2.10

-1.70

-1.30

-0.90

-0.50

-0.10

0.30

0.70

1.10

Dec

-16

Jan-

17

Feb

-17

Mar

-17

Ap

r-17

May

-17

Jun

-17

Jul-

17

Au

g-17

Au

g-17

Sep

-17

Oct

-17

No

v-17

Dec

-17

(%)

Ind., 2.04

Co., 0.80

Bank/DFI, (4.49)

NBFC, (0.06)

M.Funds, 1.15 Ins, 1.60

Others, 5.17

Prop. Trading , (0.76)

(6.00)

(4.00)

(2.00)

-

2.00

4.00

6.00

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

Dec-1

6

Jan-1

7

Jan-1

7

Feb

-17

Ma

r-1

7

Ma

r-1

7

Apr-

17

Ma

y-17

Ma

y-17

Jun-1

7

Jul-1

7

Jul-1

7

Aug-1

7

Aug-1

7

Sep-1

7

Oct

-17

Oct

-17

Nov-1

7

Nov-1

7

Dec-1

7

-22%

-17%

-12%

-7%

-2%

3%

8%

13%

18%

23%

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

KSE-All Share Index AKD Universe

6

AKD Securities Limited StockSmart


Market PER Chart 2017

Source: AKD Research

Market P/BVS Chart 2017

Source: AKD Research

22 December 2017

Jul-

07

Feb

-08

Oct

-08

Jun-

09

Feb

-10

Oct

-10

May

-11

Jan-

12

Sep

-12

May

-13

Jan-

14

Sep

-14

Apr

-15

Dec

-15

Aug

-16

Apr

-17

Dec

-17

14.0

10.5

7.0

3.5

(x)

Jul-0

7

Feb-

08

Oct

-08

Jun-

09

Feb-

10

Oct

-10

May

-11

Jan-

12

Sep-

12

May

-13

Jan-

14

Sep-

14

Apr-

15

Dec

-15

Aug-

16

Apr-

17

Dec

-17

2.5

2.0

1.5

1.0

(x)

7



AKD Universe Active Coverage Cluster’s Valuations

22 December 2017

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 1,680.53 2,069.97 Buy 165.41 159.58 185.44 10.16 10.53 9.06 4.23 3.76 3.22 6.84 6.55 6.55

Pak Suzuki Motors PSMC 482.22 800.66 Buy 44.98 57.33 58.31 10.72 8.41 8.27 1.35 1.19 1.06 1.87 2.28 2.49

Cements

DG Khan Cement DGKC 121.17 194.00 Buy 18.20 16.40 17.85 6.66 7.39 6.79 0.71 0.67 0.64 6.19 6.60 5.78

Lucky Cement LUCK 475.18 898.00 Buy 42.34 34.15 37.79 11.22 13.92 12.57 1.93 1.84 1.66 2.53 2.10 2.53

Maple Leaf Cement Factory MLCF 68.77 107.00 Buy 7.92 6.98 7.46 8.68 9.85 9.21 1.75 1.32 1.10 4.77 8.73 8.73

Fauji Cement Company Ltd. FCCL 22.56 39.00 Buy 1.89 2.59 3.22 11.91 8.72 7.01 1.58 1.51 1.42 3.99 8.87 11.08

Pioneer Cement Limited PIOC 54.94 109.00 Buy 12.84 9.04 10.54 4.28 6.08 5.21 1.02 0.95 0.88 10.01 9.10 10.92

Cherat Cement Co Limited CHCC 95.88 140.00 Buy 11.08 10.71 12.79 8.66 8.95 7.50 1.62 1.49 1.32 2.79 4.17 5.21

Gharibwal Cement Ltd GWLC 21.14 58.00 Buy 5.71 4.07 4.49 3.71 5.20 4.71 0.74 0.71 0.68 14.19 15.37 13.01

Engineering

Amreli Steels Ltd. ASTL 87.21 132.00 Buy 3.62 5.56 14.70 24.12 15.68 5.93 2.32 2.02 1.56 2.29 2.29 6.88

Fertilizers

Engro Corporation ENGRO 277.36 348.84 Buy 20.47 21.56 27.91 13.55 12.86 9.94 1.76 1.73 1.66 8.29 7.21 7.93

Engro Fertilizers Limited EFERT 66.15 72.24 Accumulate 7.19 7.23 7.37 9.20 9.15 8.97 2.02 1.94 1.88 8.15 8.74 9.47

Fauji Fert. Bin Qasim Ltd. FFBL 34.24 48.10 Accumulate 2.03 2.60 2.79 16.83 13.16 12.27 2.38 2.20 2.05 4.75 6.08 6.52

Fauji Fertilizer Company FFC 76.88 96.86 Buy 6.97 7.66 8.34 11.03 10.04 9.22 3.36 3.25 3.14 8.16 8.97 9.76

Fatima Fertilizer FATIMA 30.20 45.11 Buy 5.06 5.44 6.00 5.97 5.56 5.03 1.16 1.07 1.00 10.89 12.60 13.91

Food Producers

Engro Foods Limited EFOODS 75.02 84.20 Accumulate 0.75 1.19 1.22 100.28 62.83 61.33 3.11 2.94 2.76 - - -

Oil & Gas

Oil & Gas Development Co. OGDC 162.14 191.00 Accumulate 14.83 17.55 17.98 10.93 9.24 9.02 1.34 1.22 1.12 3.70 3.24 3.39

Pak Oilfields POL 588.21 565.00 Neutral 39.66 60.16 68.94 14.83 9.78 8.53 4.42 4.05 3.68 6.80 8.67 9.95

Pakistan Petroleum PPL 198.40 239.00 Buy 18.10 21.40 25.93 10.96 9.27 7.65 1.81 1.61 1.43 4.54 4.54 5.29

Hascol Petroleum HASCOL 230.48 325.95 Buy 13.02 18.43 23.50 17.71 12.51 9.81 4.50 3.86 3.32 3.69 5.21 7.16

Attock Petroleum APL 499.29 745.14 Buy 65.27 75.54 91.87 7.65 6.61 5.43 2.69 2.55 2.41 8.51 13.17 16.02

Pakistan State Oil PSO 289.77 413.28 Buy 55.90 64.33 78.14 5.18 4.50 3.71 0.92 0.83 0.73 7.19 9.32 10.35

Power

Hub Power Co. HUBC 91.40 142.70 Buy 11.20 12.42 12.37 8.16 7.36 7.39 3.45 3.38 3.50 8.21 12.04 11.77

K-Electric Co. KEL 6.35 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 53.99 64.38 Accumulate 10.73 11.09 10.79 5.03 4.87 5.00 1.46 1.40 1.35 16.76 17.60 17.13

Fixed Line Telecommunication

Pakistan Telecommunication PTC 12.57 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Personal Goods

Nishat Mills NML 146.35 169.10 Accumulate 12.12 15.48 18.09 12.07 9.45 8.09 0.58 0.56 0.53 3.42 4.78 5.64

Nishat Chunian Ltd. NCL 46.46 69.26 Buy 6.75 9.55 10.66 6.88 4.86 4.36 0.93 0.82 0.73 5.92 8.07 9.15

Banks

Allied Bank Limited ABL 81.50 101.44 Buy 11.95 13.01 14.62 6.82 6.26 5.58 0.87 0.82 0.77 9.20 9.82 11.04

Bank AlFalah BAFL 41.62 48.43 Accumulate 5.33 5.44 5.98 7.81 7.65 6.97 1.01 0.88 0.79 - 2.38 3.58

Habib Bank Limited HBL 170.07 253.08 Buy 22.13 24.11 26.29 7.69 7.05 6.47 1.17 1.09 1.01 8.23 8.23 8.23

MCB Bank Limited MCB 202.45 236.68 Accumulate 21.08 22.41 25.04 9.60 9.03 8.09 1.43 1.35 1.28 7.89 7.89 8.39

National Bank of Pakistan NBP 46.70 65.27 Buy 8.60 9.08 10.46 5.43 5.14 4.46 0.50 0.48 0.46 14.99 11.78 18.20

United Bank Ltd UBL 182.80 238.61 Buy 20.52 22.40 25.00 8.91 8.16 7.31 1.29 1.23 1.15 7.11 7.11 7.11

8


22 December 2017

StockSmart


AKD Universe Coverage Cluster’s Performance


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

2 2 - De c - 17 1M 3 M 6 M 12 M CYTD High Low

KSE- 10 0 Inde x 3 9 ,4 7 0 .8 9 - 2 .8 - 7 .7 - 14 .8 - 15 .5 - 17 .4 52,876.5 37,919.4

Automobile a nd Pa rts

Indus Motors INDU 1680.53 - 3.8 - 4.3 - 7.9 6.3 4.1 2044.30 1574.18

Pak Suzuki Motors PSMC 482.22 - 5.3 5.9 - 37.9 - 22.9 - 21.3 903.91 436.74

Ce me nts

DG Khan Cement DGKC 121.17 - 11.0 - 20.3 - 43.7 - 42.9 - 45.4 245.37 112.74

Lucky Cement LUCK 475.18 - 6.8 - 19.8 - 42.9 - 42.3 - 45.1 994.65 445.80

Maple Leaf Cement Factory MLCF 68.77 - 5.3 - 21.9 - 38.4 - 45.8 - 46.1 137.64 63.05

Fauji Cement Company Ltd. FCCL 22.56 - 18.8 - 34.2 - 46.5 - 45.9 - 50.0 48.19 21.00

Pioneer Cement Limited PIOC 54.94 - 12.4 - 39.8 - 58.1 - 60.0 - 61.3 160.02 48.92

Cherat Cement Limited CHCC 95.88 - 4.1 - 25.4 - 44.7 - 43.6 - 44.9 212.00 88.50

Gharibwal Cement Limited GWLC 21.14 - 10.5 - 41.2 - 56.1 - 57.7 - 57.7 67.48 19.79

Engine e ring

Amreli Steel Ltd ASTL 87.21 - 9.0 - 16.2 - 31.7 31.6 31.0 137.97 65.52

Fe rtilize rs

Dawood Hercules DAWH 111.73 - 6.0 - 11.8 - 16.4 - 19.0 - 22.6 161.23 105.45

Engro Fertilizers Ltd. EFERT 66.15 - 0.9 9.3 17.9 22.7 - 2.7 73.28 51.90

Engro Chemical ENGRO 277.36 6.2 - 11.0 - 17.9 - 11.4 - 12.3 399.16 253.43

Fatima Fertilizer FATIMA 30.20 - 2.6 1.0 - 7.8 - 15.7 - 18.1 41.29 26.83

Fauji Fert. Bin Qasim Ltd. FFBL 34.24 - 3.2 - 3.2 - 12.8 - 32.2 - 33.1 58.41 32.17

Fauji Fertilizer Company FFC 76.88 - 7.7 - 2.1 - 8.2 - 25.8 - 26.3 118.96 70.07

Food Produc e rs

Engro Foods Limited EFOODS 75.02 - 9.1 - 21.2 - 41.6 - 55.5 - 60.9 207.82 70.19

Oil & Ga s

Oil & Gas Development Co. OGDC 162.14 2.8 8.4 16.0 0.2 - 1.9 188.71 133.69

Pak Oilfields POL 588.21 - 5.3 17.8 30.8 8.0 10.0 640.28 429.75

Pakistan Petroleum Ltd. PPL 198.40 0.3 13.2 35.5 6.2 5.4 201.94 143.73

Pakistan State Oil PSO 289.77 - 9.2 - 35.3 - 26.5 - 30.8 - 33.3 486.05 265.17

Attock Petroleum Ltd. APL 499.29 - 15.9 - 20.2 - 21.2 - 27.5 - 27.1 749.39 490.02

Hascol Petroleum HASCOL 230.48 - 15.6 - 19.5 - 30.4 - 29.3 - 31.7 389.41 211.63

Powe r

Hub Power Co. HUBC 91.40 - 10.8 - 20.9 - 24.3 - 26.5 - 26.0 145.43 89.90

K- Electric Limited KEL 6.35 8.0 1.3 - 9.3 - 31.1 - 32.2 10.67 5.34

Kot Addu Power Company KAPCO 53.99 - 14.5 - 29.5 - 25.1 - 30.0 - 31.5 85.02 49.39

Fixe d Line Te le c ommunic a tion

Pakistan Telecommunication PTC 12.57 0.1 - 11.1 - 16.8 - 27.8 - 26.8 19.45 11.80

Pe rsona l Goods

Nisaht (Chunian) Ltd. NCL 46.46 - 0.2 - 14.8 - 6.9 - 23.4 - 25.6 72.67 44.03

Nishat Mills NML 146.35 2.3 - 1.2 - 7.3 - 3.1 - 3.9 185.63 130.03

Ba nks

Allied Bank Limited ABL 81.50 1.1 - 9.4 - 7.9 - 30.9 - 31.6 122.00 76.72

Bank AlFalah BAFL 41.62 2.8 - 1.2 6.3 9.5 9.6 47.24 36.03

Habib Bank Limited HBL 170.07 2.4 - 8.1 - 32.9 - 35.3 - 37.8 308.57 152.41

MCB Bank Limited MCB 202.45 - 1.0 - 4.9 - 3.4 - 14.7 - 14.9 262.10 190.43

National Bank of Pakistan NBP 46.70 5.4 - 19.5 - 23.0 - 36.9 - 37.6 82.66 43.01

United Bank Ltd UBL 182.80 6.6 - 6.0 - 19.3 - 22.9 - 23.5 275.38 163.40

Absolute Pe rforma nc e (%)

9


22 December 2017

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17

T-bill

3M % 5.85 5.85 5.85 5.85 5.85 5.85 5.85 5.85 5.85 n.a

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

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

PIB 10Y % 8.21 8.17 8.24 8.26 8.21 8.18 8.2 8.23 8.27 n.a

KIBOR 6M % 5.87 5.87 5.88 5.91 5.90 5.90 5.89 5.90 5.91 5.91

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

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

Inflation

Headline inflation % 3.66 4.22 4.94 4.78 5.00 3.9 2.9 3.4 3.9 3.8

Core inflation % 5.40 5.30 5.30 5.50 5.50 5.5 5.6 5.5 5.4 5.3

Food inflation % 2.60 3.70 5.00 4.40 4.90 2.4 (0.10) 1.3 2.4 2.2

External Indicators

Export (PBS) US$ (mn) 1,780 1,638 1,801 1,805 1,627 1,912 1,631 1,866 1,675 1,888

Import (PBS) US$ (mn) 4,724 4,419 5,009 4,998 5,092 4,534 4,835 4,952 4,473 4,929

Trade Deficit (PBS) US$ (mn) (2,944) (2,781) (3,208) (3,193) (3,465) (2,622) (3,204) (3,086) (2,798) -3,041

Export (SBP) 1,783 1,769 2,061 1,766 1,954 1,865 1,828 2,104 2,194 2,380

Import (SBP) 4,196 4,017 4,305 4,108 4,633 5,054 4,720 4,262 4,712 5,258

Trade Deficit (SBP) (2,413) (2,248) (2,244) (2,342) (2,679) (3,189) (2,892) (2,158) (2,518) (2,878)

Home Remittances US$ (mn) 1,488 1,417 1,694 1,539 1,867 1,840 1,542 1,955

1,294 1,654

Current Account US$ (mn) (1,202) (822) (562) (1,337) (1,651) (1,431) (2,051) (550) (1,097) (1,315)

Banking Sector

Deposits PkR (bn) 10,704 10,730 11,170 11,214 10,993 11,981 11,702 11,651 11,980 11,777

Advances PkR (bn) 5,468 5,477 5,697 5,777 5,936 6,176 6,028 6,035 6,137 6,151

Investments PkR (bn) 7,374 7,467 7,670 7,794 7,849 8,166 7,989 8,145 8,338 8,342

W. A. lending rate % 8.01 7.99 7.89 7.85 7.87 7.86 7.88 7.91 7.83 7.82

W. A. deposit rate % 3.05 3.02 2.99 2.98 2.89 2.84 2.91 2.93 2.93 2.91

Spread rate % 4.96 4.97 4.90 4.87 4.98 5.02 4.97 4.98 4.90 4.90

Public Finance

Tax collection PkR (mn) 223,856 225,486 346,999 249,958 330,957 511,449 n.a n.a n.a n.a

Direct taxes PkR (mn) 81,741 80,019 147,242 78,407 117,084 247,210 n.a n.a n.a n.a

Indirect Taxes PkR (mn) 142,115 145,467 199,757 171,551 213,873 264,239 n.a n.a n.a n.a

Currency

Fx Reserves US$ (mn) 22,242 22,072 21,572 21,019 21,190 21,402 20,223 20,401 19,775 19,583.70

USDPkR - Interbank PkR/USD 104.84 104.84 104.82 104.79 104.84 104.86 105.48 105.38 105.40 105.41

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

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

22 December 2017

stocksmart pakistan weekly update -...

Documents