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Project
Of
Investment management
Submitted to
Mr. Waqar Akbar
Submitted by
Mumtaz Ali
Asad Ali
Ayaz Ali
Department of Administrative sciences
Quaid-i-Azam University Islamabad
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ECONOMIC ANALYSIS
Pakistan economic analysis shows that national economy is not exactlyin best of health. There are plenty of reasons behind present economicconditions that Pakistan finds itself in. Major causes have been low levels offoreign investment and an ongoing conflict with neighboring country India.Closer economic analysis in Pakistan reveals that this has contrived to barPakistani economy from achieving its fullest potential. Pakistan GDP growthin fiscal year of 2008 has been estimated to be 5.8 percent. It can beassumed as a result of in depth economic analysis at Pakistan that due to
internal conflicts and political disputes, economy of Pakistan has always beenimpoverished and underdeveloped. In fiscal year 2008, gross domesticproduct of Pakistan with regards to purchasing power parity was estimated tobe $454.2 billion. Pakistani GDP for official exchange rate was approximately$160.9 billion. Real growth rate in 2008 GDP of Pakistan, as per statisticaldata was found to be 4.7 percent, while $2,600 was GDP per capita income.Economic analysis of Pakistan shows that each sector contributes differentlyto Pakistan economy. Agricultural sector contributes about 20.4 percent toPakistan gross domestic product. 26.6 percent is contributed by industrialsector as was estimated by 2008 GDP of Pakistan. 53 percent was receivedfrom services sector during 2008.
Privatization of banking sector assisted by foreign assistance madePakistan get access to global markets. This was suggested by IMF. There hasbeen a macroeconomic recovery since then in Pakistan. Between 2004 and2007, there has been a growth of 6-8 percent. As per in depth Pakistaneconomic analysis this growth was accelerated by industrial and servicesectors. Since 2001, level of poverty has decreased by 10 percent and asteady development can be seen in Islamabad. There has been a 52 percentreal increase in budget share. Inflation, however, remains chief concern inPakistan among public. In Pakistan economy, inflation rate moved up from6.9 percent in fiscal year of 2007 to 11 percent in early months of 2008. Thiswas result of mounting prices of commodities across financial globe. Sinceemergency rule in November 2007, value of Pakistani rupee has declined.
Detailed Pakistan economic analysis shows that there was 5.4 percentgrowth in manufacturing, 4.8 percent growth in large scale manufacturingand 1.5 percent growth in agriculture sector in 2008. In addition there hasbeen a growth of 18.4 percent in per capita income and 17 percent growth infinance and insurance sector in 2008. Increase in public debt burden is alsoshown to have gone up from 55.2 percent of GDP to 56 percent. LatestPakistan economic report has confirmed that political stability is required inorder for this south Asian country to deal with its economic crises in a more
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suitable way. New Pakistani economic report has also suggested that processof political reconciliation should be persisted with if this country is to do awaywith their economic problems
As per Pakistans economic report terrorism has been a thorn in fleshof Pakistan economy. Shah Mahmood Qureishi, foreign minister of Pakistan,
has also reiterated that in order to add to strength of economic institutions inPakistan it is imperative that central government dealt with these issues withan iron fist so that economic imbalance in this country could be addressed.
According to economic report of Pakistan it has been observed that
International Monetary Fund and Pakistan have reached an agreementregarding Pakistans budget for fiscal 2009-10. As per this agreement acapital value tax, at rate of 0.2 percent, would be imposed on every Rs.25,000 that is taken out of foreign currency accounts as specified in budgetfor 2009-10. Added information from economic report in Pakistan reveals thatin meeting that IMF and Pakistan had in Dubai revisions were made for macro
economic goals for fiscals 2009 and 2010. Both these parties have alsoarrived mutually at macro economic goals for Pakistan economy. Economicreport at Pakistan states that in case withdrawals from foreign currencyaccounts are in excess of Rs. 25,000 a withholding tax at rate of 0.3 percentwould be exercised in that case. It has also been suggested in economicreport from Pakistan that for account holders who are not recognized byincome tax and sales tax departments in Pakistan rate of withholding taxcould be increased to 6 percent from 3 percent. This would be levied whenthey take out money from banks. However, this proposal is still doing roundsin higher circles of Pakistan economy.
According to Pakistan economic report this tax would make account
holders go for documenting their financial transactions with checks in placeof cash. Ministry of Finance, Pakistan has made it clear that this proposalwould be included in budget for fiscal 2009-10. Pakistan economic report for2009 also states that some other important matters are at level of discussionin Pakistan. Economic authorities are aiming to take tax to GDP ratio to 12.5percent within 2009 to 2012 from 10 percent at 2008-09.
INDUSTORY ANALYSIS
PHARMACUTICAL INDUSTORY
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Healthcare in Pakistan is still in the early stages of development.Widespread poverty and a weak health system underlie the poor healthstatus of the population. This report is ideal for executives wanting tounderstand the key drivers in the pharmaceutical market and have access toa wealth of statistical data, including five-year market projections. In addition
to the report are 3 free quarterly updated outlook reports, enabling you tokeep up to date with market developments for a year.
The pharmaceutical market has slowly evolved over the years, fromone that was largely dominated by multinationals around 20 years ago, toone that is now almost evenly split between local and multinationalcompanies. The domestic pharmaceutical industry serves an estimated 80%of the market, with around 20% served by imports. The balance ofpharmaceutical trade remains negative. Between 2004 and 2008, the deficitin the balance of trade rose by a considerably high CAGR. There are a largenumber of local producers, but there is virtually no investment in R&D fornew drugs. The local industry comprises manufacturers of generics, which
import around 90% of raw materials used to make drugs. Increasedcompetition, low drug prices, rising raw material costs, poor intellectualproperty rights and generally weak market conditions brought on byeconomic and political instability has made the country somewhat lessattractive to some multinational companies. In February 2010, it wasannounced that the Biological Production Division (BPD) of the NationalInstitute of Health (NIH) will restart the basic manufacturing of tetanustoxoid, measles and cell culture rabies vaccines. The NIH wants the divisionto attain vaccine self-sufficiency in the next few years.
The Pharmaceutical Industry in Pakistan commenced its business operationsa few years after the country came into existence. With the passage of time
most of the multinational companies began manufacturing activities to copewith the requirement of quality drugs and medicines for the rapidlyincreasing population in both wings of the country. Presently the number ofregistered or licensed manufacturers in the country is close to 300 units outof which are 32 majority control multinationals and there are many jointventures with foreign collaboration. According to the IMS (InternationalMarket Survey) the total pharmaceutical market in Pakistan in 1996 wasvalued at US$900 million which grew at the rate of 20 per cent in 1996. Thetotal world market for pharmaceuticals is estimated to be about US$248billion in 1994 out of which North America had a share of 33.5 per centfollowed by Europe at 27 per cent and Japan 21.5 per cent. Pakistan's sharewas about 0.3 per cent. The per capita consumption of pharmaceuticals is
about US$4 in Pakistan whereas the average worldwide annual.
As many as 32 multinational companies command more than 70 per cent ofthe total pharmaceutical sales in the country. The present devaluation hasenhanced the cost of raw material and imported medicines and made thembeyond the common man's reach, besides promoting smuggling.
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At present there are 15 Pharmaceutical companies on the list of KarachiStock Exchange and they command more than 70 per cent of totalpharmaceutical sales in the country. Total Paid-up Capital of these companiesstood at Rs. 1009.87 million. Free Reserves and Surplus stood at Rs. 1346.96million. General Break-up Value per Rs. 10/- worked out to Rs. 23.52. Totalsales of these companies in 1992 stood at Rs. 10.67 billion as compared to
Rs. 9.36 billion in the preceding year, showing a rise of 14 per cent. PretaxProfit has also increased from Rs. 718.41 million to Rs. 752.27 million in1992, depicting a rise of 4.71 per cent. Increase may be attributed to higherprice allowed by the government. The top 5 pharmaceutical companiesaccording to sales in 1992 are given below:-
Dividend: The Dividend picture in this section is very encouraging. Out of 15companies 12 paid dividends during the year under review. The highestdividend of 45% (cash) was paid by Boots Pakistan Limited followed by 35%each by Welcome and Glaxo. Ferozsons, Ostuka and Zafara Internationalhave not paid any dividend, bonus or right shares during 1992.
Price Policy: Price Policy for the pharmaceutical industry is quite confusing.An across the board increase of 9.5 to 10 per cent was allowed in 1991without considering the fact that major pharmaceutical units were allowed a10 per cent price increase at the end of 1989 for top ten products of eachcompany. It is to be noted that in most of these cases the top ten productsusually account for upto 80 per cent of the company's total turnover.
It was reported that out of 264 national pharmaceutical manufacturing units,210 licensed manufacturing companies operating in the country of these 32are multinationals. The present devaluation has enhanced the cost of rawmaterial and imported medicines and made it beyond the common man's
reach, besides promoting smuggling. The cheaper and low quality medicinesare mostly smuggled from Sri Lanka and Burma. Other sources are Iran,where pharmaceutical industry is heavily subsidized and India where qualityis non-existent and its basic raw material is produced locally. In case ofPakistan all the raw material is imported.
TEXTILE INDUSTORY
When we think manufacturing industry, Pakistan, it is the textileindustry that immediately come to the mind that is playing an important rolein term of the employment generation and value added special with strongbase of raw material has started its journey from non existence in 1947 with
3000 looms that is too in the unorganized sector, with only one textile unit. Itcould supply only 8% of the domestic demand derived from its population 76million people.
The industry has gone through a long way and now possesses 443units, 8.4 million spindles and 166,000 rotors. 20,000 shuttle less looms,200,000 power looms, 8,000 terry towel looms, 7620 canvas looms, 157,000woolen / worsted installed spindles, 15,000 woolen looms, 12,000 knittingmachines, over 600 processing units and over 2500 garments units. Thetextile industry at present is a passing through a transition phase. It is sailing
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smoothly under the protected cover of the quota system; however it has toface the rough waters of the open sea when globalization of trade isimplemented under WTO agreement in 2004. three years have already goneunnoticed the fast approaching deadline sounding a note of warning forrestructuring of all the segments of the cotton and textile industries on warfootings to enable it to face the future challenges of fierce competitio0n
amongst the low cost Asians manufacturers to capture share of their highercost European counter parts when the gates of the global economies areopen.TEXTILE INDUSTRY ECONOMIC CONTRIBUTION
Description ContributionExports 64% of total exports (US$ 4.9 billion)Manufacturing 46% of total manufacturingEmployment 38% total employmentInvestment 31% of total investmentMarket capitalization 7% of total market capitalizationInterest Rs. 4 billion per annumSalaries and wages Rs. 40 billion per annumContribution to research and
development
Rs. 116 million per annum
Gross domestic product (GDP) 8.5% of Total GDP
This sounds a triumph like situation at a glance. There is however much morethan it meets the eyes when you go into details, which carry some failuresalso to weep on. This industry has not performed as well as it should have. Itis struggling for its survival for the past 7years.
CONTRIBUTION IN EMPLOYMENT
Textile unit constitute 38% of employment generated by the manufacturingsector while textile being largest industry has got other forward and backward relation where it must had played its role in generating employment inrelated industries for example shipping industry will definitely by mainlydepended upon textile industry.
FUTURE PROSPECTS
In the fierce competitive environment as a result of the quota freetrade, there are many new entrants in export market. To succeed we arefocusing on efficiency, operational excellence and pursuing new businessopportunities. The increasing fuel prices and continuing increase in mark-uprates are areas of main concern.
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COMPANY ANALYSIS
ABBOT LABS PAKISTAN
We are a global, broad-based health care company devoted to discoveringnew medicines, new technologies and new ways to manage health. Ourproducts span the continuum of care, from nutritional products andlaboratory diagnostics through medical devices and pharmaceuticaltherapies. Our comprehensive line of products encircles life itself - addressingimportant health needs from infancy to the golden years.
Abbott has sales, manufacturing, research and development, and distributionfacilities around the world, close to where our customers need us to be. Weare recognized for our global reach and our ability to serve our customersaround the world. Its commitment to improving life extends to humanitariancauses. We recognize that as a leading provider of innovative health care
products, we have a unique responsibility and opportunity to ensure peoplehave access to them whether they are among the poor and underprivilegedor victims of natural disasters. Were determined to do our part throughcreative and varied social programs. The promise of our company is in thepromise that our work holds for health and for life.
Abbott prides itself on being recognized as a good place to work because westrive to provide an environment that enables employees to succeed. Wehave received numerous local, national and international distinctions for ourcommitment to workplace excellence. Our programs range from awardwinning health care benefits to a variety of convenience and wellnessservices and long-term retirement benefits. Throughout our 120+ year
history, Abbott people have been driven by a constant goal: to advancemedical science to help people live healthier lives. It's part of our heritage.And, it continues to drive our work. Today, approximately 83,000 employeesaround the world share the passion for " Turning Science into Caring." It's acommitment to focusing on what matters most: life and the potential it holdswhen we are feeling our best.
Abbott Laboratories (Pakistan) Limited engages in the manufactureand marketing of pharmaceutical, nutritional, and medical products primarilyin Pakistan. The company operates in three segments: Pharmaceutical,Nutritional, and Others. The Pharmaceutical segment manufactures, imports,
and markets research based pharmaceutical products; and provides tollmanufacturing services. The Nutritional segment involves in the manufacture,import, and marketing of pediatric nutritional products and medicalnutritional products. The Others segment engages in the manufacture,import, and marketing of diagnostic equipment, diabetic care products,molecular devices, their testing kits, and general healthcare products. Thecompany was incorporated in 1948 and is based in Karachi, Pakistan. AbbottLaboratories (Pakistan) Limited is a subsidiary of Abbott Laboratories.
http://www.abbott.com/global/url/content/en_US/20:20/general_content/General_Content_00010.htmhttp://www.abbott.com/global/url/content/en_US/10.40:40/general_content/Global_Locations.htmhttp://www.abbott.com/global/url/content/en_US/40:40/general_content/General_Content_00035.htmhttp://www.abbott.com/global/url/content/en_US/10.10:10/general_content/General_Content_00003.htmhttp://www.abbott.com/global/url/content/en_US/50:50/general_content/General_Content_00013.htmhttp://www.abbott.com/global/url/content/en_US/10.10:10/general_content/General_Content_00003.htmhttp://www.abbott.com/global/url/content/en_US/10.40:40/general_content/Global_Locations.htmhttp://www.abbott.com/global/url/content/en_US/40:40/general_content/General_Content_00035.htmhttp://www.abbott.com/global/url/content/en_US/10.10:10/general_content/General_Content_00003.htmhttp://www.abbott.com/global/url/content/en_US/50:50/general_content/General_Content_00013.htmhttp://www.abbott.com/global/url/content/en_US/10.10:10/general_content/General_Content_00003.htmhttp://www.abbott.com/global/url/content/en_US/20:20/general_content/General_Content_00010.htm -
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PAKISTAN REFINARY COMPANY
Actual Return and Risk
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Year 2005 2006 2007
Month P1 P0 D P1 P0 D P1 P0 D
Jan 176.1 184.9379.8
5 369.9 224 216.45
Feb 255 176.1 336.5 379.85 198.5 224
Mar 177.5 255 300 336.5 191.8 198.5
Apr 218.9 177.5 296 300 221.95 191.8
May 206.9 218.9 285 296 235 221.95
Jun 207.9 206.9 213.9 285 221.95 235
Jul 213 207.9 272.7 213.9 259.95 221.95
Aug 233.5 213 325 272.7 215 259.95
Sep 344 233.5267.8
5 325 248 215
Oct 400.5 344251.7
5 267.85 266 248
Nov 412 400.5 218 251.75 260 266
Dec 369.9 41213
216.45 218
10.76 249.85 260
2.8
Average
267.9333
252.5167
13
280.25
293.0375
10.76
232.6667
229.8833
2.8
2008 2009
P1 P0 D P1 P0 D
271.85 249.85 55.13 98.4
276.1 271.85 53.85 55.13
238.95 276.1 68.43 53.85
274 238.95 74.22 68.43
170.62 274 71.29 74.22
151.38 170.62 89.8 71.29R(2005)
11.25338
127.9 151.38 141.48 89.8R(2006)
-0.6918
9
105 127.9 123.52 141.48R(2007)
2.428768
103.57 105 116.99 123.52R(2008) -2.217
103.57 103.57 107.5 116.99 R(2009) 2.017972
103.57 103.57 104.46 107.5
98.4 103.578.6 120.7 104.46 0
168.7425
181.3633
8.6
93.9475
92.08917 0
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EXPECTED RITURN AND RISK
R P RP R-R(bar)(R-R(bar))2
P*(R-R(bar))2
0.024 0.3 0.0072 -0.175 0.0306 0.009180.021 0.4 0.0084 -0.178 0.0316 0.012670.019 0.6 0.0114 -0.08 0.0064 0.003840.113 0.5 0.057 -0.086 0.00739 0.00369
0.0201 0.6 0.121 -0.1789 0.03200 0.0192
0.199 0.048580.2204
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KOHNOOR MILLS
Actual Return and Risk
Year 2005 2006 2007 2008 2009
Month Po P1 Po P1 Po P1 Po P1 Po P1January 5.30 5.50 4.50 5.00 4.50 4.50 5.25 5.00 0.00 9.85
February 5.50 5.75 5.00 4.50 4.50 4.50 5.00 5.00 9.85 7.85
March 5.75 5.00 4.50 4.20 4.50 4.80 5.00 5.00 7.85 3.90
April 5.00 4.90 4.20 4.25 4.80 4.80 5.00 5.50 3.90 0.00
May 4.90 4.50 4.25 4.00 4.80 4.50 5.50 5.50 0.00 2.95
June 4.50 4.65 4.00 4.40 4.50 5.10 5.50 4.91 2.95 2.85
July 4.65 5.50 4.40 4.05 5.10 7.00 4.91 6.85 2.85 2.99
August 5.50 4.40 4.05 4.00 7.00 6.00 6.85 9.85 2.99 2.00
September 4.40 4.75 4.00 3.40 6.00 4.50 9.85 0.00 2.00 1.51
October 4.75 4.45 3.40 5.00 4.50 5.90 0.00 0.00 1.51 1.98
November 4.45 4.25 5.00 4.00 5.90 6.00 0.00 0.00 1.98 1.49December 4.25 4.50 4.00 4.50 6.00 5.25 0.00 0.00 1.49 0.51
Average 4.91 4.85 4.28 4.28 5.18 5.24 4.41 3.97 3.11 3.16
Dividend 0.0 0.0 0.0 0.0 0.0
Actual Return
Year P1 - Po Do+(P1-Po)/Po Do+(P1-Po)/Po[Do+(P1-Po)/Po] x
100
2005 -0.1 -0.1 -0.014 -1.36
2006 0.0 0.0 0.000 0.00
2007 0.1 0.1 0.012 1.21
2008 0.4 0.4 0.099 9.93
2009 0.0 0.0 0.014 1.36
Actual Risk
Return(X-
Mean) (X-Mean)2(X-
Mean)2/n-1(X-
Mean)2/n-1
-1.36 -3.59 12.86 3.22 1.79
0.00 -2.23 4.97 1.24 1.11
1.21 -1.02 1.04 0.26 0.51
9.93 7.70 59.33 14.83 3.85
1.36 -0.86 0.75 0.19 0.43
Mean 2.23 78.95 Variance 4.44
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Expected Return2.70
%
R p Rp
-0.015 0.30-
0.0045
0.015 0.30 0.0045
0.045 0.15 0.0068
0.075 0.20 0.0150
0.105 0.05 0.0053
0.027
Expected Risk
R p RpR-
Mean
(R-Mean)
2
(R-Mean)2p
(R-Mean)2p
-0.015 0.30-
0.0045-
0.0600 0.0036 0.0011 0.0329
0.015 0.30 0.0045-
0.0300 0.0009 0.0003 0.0164
0.045 0.15 0.0068 0.0000 0.0000 0.0000 0.0000
0.075 0.20 0.0150 0.0300 0.0009 0.0002 0.0134
0.105 0.05 0.0053 0.0600 0.0036 0.0002 0.0134
Mean 0.045 0.027 0.001710
0.0414 4.14%
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ABBOTT LABS PAKISTAN
ACTUAL RETURN AND RISK
` 2005 2006 2007
E:Price B:Price E:Price B:Price E:Price B: PriceP1 Po P1 Po P1 Po
Jan 203 175.15 226 219.7 157.5 153.25
Feb 201 203 230.5 226 150.5 157.5Mar 201 159.9 180.5 230.5 152 141.9Apr 159.9 137.75 25.65 26.05 152 141.9May 137.75 125.8 157.5 171 162.5 152
Jun 125.8 125 162 157.5 186 162.5Jul 125 124 185.5 162 167 186Aug 124 134.75 143 185.5 151.9 167Sep 134.75 161.5 140 143 179.2 151.9Oct 151 152.4 144 140 190 179.2Nov 169.95 181.8 144 144 206.5 190Dec 181.8 219.7 153.25 144 211.85 206.5
calculation ofriskX X-Xo (X-Xo)^2
2005 0.039 0.00178 3.17E-06
2006 0.014 -0.02322 0.000539
2007 0.057 0.01978 0.000391
2008 0.0311 -0.00612 3.75E-05
2008 2009
E:Price B:Price E:Price B:Price
P1 Po P1 Po190.55 211.85 77.79 89.61
200 190.55 72 77.79
182.4 200 73.96 72
182 182.4 76.98 73.96160 182 83.29 83.57
177.4 160 80.2 83.29
137.78 177.4 104.01 80.2
111.5 137.78 91.84 104.01
110 111.5 93 91.840 0 97.21 93
110 110 96.49 97.2189.61 110 121.22 96.49
Averages of P1 and P0 of each year
Average 159.58 158.3958157.6583 162.4375 172.25 165.804 137.6
147.79 88.99917 86.9142
Dividend 57 3 0.1
0.022
Return 0.0390.013672 0.0569 0.0311
0.045989 3.722
Average
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2009 0.045 0.00778 6.05E-05
Xo 0.03722
risk 0.016059
2%
Expected return And risk
R P RP (R-means)2 (R-means)2*p
3.9 0.55 2.145 -1.9 1.98
1.4 0.35 0.49 -4.4 6.8
5.7 0.1 0.57 -0.1 0.001
3.11 0.12 0.373 -2.69 0.868
4.5 0.5 2.2 -1.3 0.845Return 5.783 10.494
Risk 3.23
PROSPERITY WAVING MILLS LIMTED
ACTUAL RETURN AND RISK
2005 2006 2007
P0 P1 D P0 P1 D P0 P1 D
25.3 25.6 16 16.9 13.3 13.5
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25.6 27.5 16.85 15.9 13.5 11.5
27.5 24.8 15.9 14 11.5 12.3
24.8 23 14 14.1 12.3 11.5
23 18.3 14.05 13.5 12.5 12.5
18.3 20.8 13.5 12 12.5 13.3
20.8 20 12 12 13.3 13.2
20 19 12 12.3 13.2 13.9
19 19.9 12.25 12.5 13.9 13.7
19.9 15 12.5 10.1 13.7 12.3
15 17.4 10.1 10.5 12.3 13
17.4 16 10.5 13.3 13 12.5
256 247 0 159.65 157 0 155 153 0
21.4 20.613.304
2 13.1 12.9 12.7
2008 2009
P0 P1 D P0 P1 D
12.5 12 0 0
0 0 8 7.74
12 10.8 7.74 8
10.8 9 8 8.55
9 8.5 7.85 7.3
8.5 7.45 7.3 6
7.45 8.95 6 6.5
8.95 8 6.5 7
0 0 7 12.1
0 0 12.1 12.2
0 0 12.2 13.1
0 0 13.1 13.5
69.2 64.7 0 95.8 102 2
5.76 5.39 7.98 8.49
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Expected Return and Risk
R P RP(R-
mean)2 (R-mean)2*P
3.256 0.5 1.628 0.116 0.058
1.7080.3
5 0.5978 3.61 1.26
0.5470.1
5 0.08205 9.32 1.398
-0.0650.5
0 -0.0325 13.43 6.72
2.064 0.5 1.32 2.25 1.125Return3.6
Risk10.54
Actual Return and Risk
Year Returns (X) (X-Mean)2
2005 -0.036 0.179
2006 -0.017 0.163
2007 -0.011 0.158
2008 -0.065 0.204
2009 2.064 2.812
Mean 0.387
Risk 0.938
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GULL AHMED TEXTILE LIMITED
Year 2005 2006 2007
Month Po P1 Po P1 Po P1
January 92 76.20 60.55 55.05 28.35 25.50February 86.80 92.00 58.00 60.55 35.50 28.35March 68.00 78.40 55.10 58.00 35.75 35.50April 59.00 68.00 54.50 55.10 49.00 35.75May 62.00 59.00 46.10 54.50 48.00 49.00June 55.60 62.00 41.00 46.10 40.65 48.00July 58.00 55.60 38.50 41.00 96.75 45.50August 61.00 58.00 34.95 38.50 40.95 46.75September 61.50 61.00 34.15 34.95 40.00 40.75October 69.50 66.00 33.00 34.15 39.00 40.00November 52.00 51.80 29.95 30.83 38.00 39.00December 55.45 52.00 25.50 29.95 38.10 30.00
Average 65.07 65.00 42.61 44.89 44.17 38.68Dividend 0.0 0.0 0.0
2008 2009
Po P1 Po P137.30 38.10 0.00 0.0043.65 37.30 0.00 0.00
43.00 43.65 33.70 47.7039.95 43.00 43.85 33.0042.00 39.99 38.00 43.8540.00 42.00 38.84 38.000.00 0.00 33.97 33.9746.96 40.00 31.23 31.9748.70 46.99 29.75 31.230.00 0.00 30.01 29.750.00 0.00 29.23 30.010.00 0.00 27.00 29.21
28.46 27.59 27.97 29.061.0 0.0
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Actual Risk
Return (X-Mean)
(X-
Mean)
2
(X-
Mean)
2
/n-1
(X-
Mean)
2
/n-1 -0.11 -0.77 0.59 0.15 0.39 5.35 4.69 22.03 5.51 2.35 -12.44 -13.10 171.70 42.93 6.55 6.60 5.93 35.22 8.81 2.97 3.91 3.25 10.53 2.63 1.62
Mean 0.66 240.08 Variance 7.75
Actual Return
Year P1 - PoDo+(P1-
Po)/PoDo+(P1-
Po)/Po[Do+(P1-Po)/Po] x
1002005 -0.1 -0.1 -0.001 -0.112006 2.3 2.3 0.054 5.352007 -5.5 -5.5 -0.124 -12.442008 0.9 1.9 0.066 6.602009 1.1 1.1 0.039 3.91
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ExpectedReturn
2.70%
R p Rp
-0.015 0.30
-0.004
5
0.015 0.300.004
5
0.045 0.150.006
8
0.075 0.200.015
0
0.105 0.050.005
3
0.02
7
Expected Risk
R p RpR-
Mean(R-
Mean)2(R-
Mean)2p(R-
Mean)2p
-0.015 0.30
-0.004
5
-0.060
00.003
6 0.0011 0.0329
0.015 0.300.004
5
-0.030
00.000
9 0.0003 0.0164
0.045 0.150.006
80.000
00.000
0 0.0000 0.0000 0.075 0.20 0.015 0.030 0.000 0.0002 0.0134
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0 0 9
0.105 0.050.005
30.060
00.003
6 0.0002 0.0134
Mean 0.045 0.02
7
0.001710
0.04144.14
%
PORTFOLIO RETURN AND RISK
Correlation(A&B) -0.648
A=X B=Y XY X2 Y2
11.2 -1.36-
15.2320 125.4400 1.8496
-0.69 0 0.0000 0.4761 0.00002.43 1.21 2.9403 5.9049 1.4641
-2.217 9.93-
22.0148 4.9151 98.6049
2.013 1.36 2.7377 4.0522 1.8496
12.7360 11.1400-
31.5688 140.7883 103.7682
Correlation(A&C) 0.336
Portfolio Return
Co. Name R W RW
Pak Refin 0.199 0.100 0.020
Kohinoor 0.027 0.150 0.004
Abbott labs 5.780 0.050 0.289
P W Mills 3.600 0.400 1.440
G Ahmed 0.027 0.300 0.008
1.76105
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A=X C=Y XY X2 Y2
11.2 0.0390 0.4368 125.4400 0.0015
-0.69 0.0137 -0.0095 0.4761 0.0002
2.43 0.0569 0.1383 5.9049 0.0032
-2.217 0.0311 -0.0689 4.9151 0.0010
2.013 0.0460 0.0926 4.0522 0.002112.7360 0.1867 0.5893 140.7883 0.0080
Correlation(A&D) -0.054
A=X D=Y XY X2 Y2
11.2 -0.036 -0.4032 125.4400 0.0013-0.69 -0.017 0.0117 0.4761 0.00032.43 -0.011 -0.0267 5.9049 0.0001
-2.217 -0.065 0.1441 4.9151 0.00422.013 2.064 4.1548 4.0522 4.2601
12.7360 1.9350 3.8807 140.7883 4.2660
Correlation(A&E) -0.312
A=X E=Y XY X2 Y2
11.2 -0.11 -1.2320 125.4400 0.0121
-0.69 5.35 -3.6915 0.4761 28.6225
2.43 -12.44-
30.2292 5.9049 154.7536
-2.217 6.6-
14.6322 4.9151 43.5600
2.013 3.91 7.8708 4.0522 15.2881
12.7360 3.3100-
41.9141 140.7883 242.2363
Correlation(B&C) -0.100
B=X C=Y XY X2 Y2
-1.36 0.0390 -0.0530 1.8496 0.0015
0 0.0137 0.0000 0.0000 0.0002
1.21 0.0569 0.0688 1.4641 0.0032
9.93 0.0311 0.3088 98.6049 0.0010
1.36 0.0460 0.0626 1.8496 0.0021
11.1400 0.1867 0.3872 103.7682 0.0080
Correlation (B&D) -0.127
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B=X D=Y XY X2 Y2
-1.36 -0.036 0.0490 1.8496 0.0013
0 -0.017 0.0000 0.0000 0.0003
1.21 -0.011 -0.0133 1.4641 0.0001
9.93 -0.065 -0.6455 98.6049 0.0042
1.36 2.064 2.8070 1.8496 4.2601
11.1400 1.9350 2.1972 103.7682 4.2660
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Correlation (B&E) 0.353
B=X E=Y XY X2
Y2
-1.36 -0.11 0.1496 1.8496 0.0121
0 5.35 0.0000 0.0000 28.6225
1.21
-12.44
-15.0524 1.4641 154.7536
9.93 6.6 65.5380 98.6049 43.5600
1.36 3.91 5.3176 1.8496 15.288111.1400 3.3100 55.9528 103.7682 242.2363
Portfolio Risk
AAWAWA0.00039601ABWAWB
-0.00005224
ACWAWCr 0.00193124
ADWAWDr-
0.00153854
AEWAWEr-
0.00005032
BAWBWAr-
0.00005224
BBWBWB 0.00001640
BCWBWCr-
0.00011653
BDWBWDr-
0.00073985
BEWBWEr 0.00001158
CAWCWAr 0.00193124
CBWCWBr-
0.00011653
CCWCWC 0.08352100
CDWCWDr 0.12556578
CEWCWEr-
0.00175251
DAWDWAr-
0.00153854
DBWDWBr-
0.00073985
DCWDWCr 0.12556578
DDWDWD 2.07360000
DEWDWEr 0.00257318
EAWEWAr-
0.00005032
EBWEWBr 0.00001158
ECWEWCr-
0.00175251
EDWEWDr 0.00257318
EEWEWE 0.00006561
2.40926259
p 1.55217995
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Correlation (C&D) 0.302
C=X D=Y XY X2 Y2
0.0390 -0.036 -0.0014 0.0015 0.0013
0.0137 -0.017 -0.0002 0.0002 0.00030.0569 -0.011 -0.0006 0.0032 0.0001
0.0311 -0.065 -0.0020 0.0010 0.0042
0.0460 2.064 0.0949 0.0021 4.2601
0.1867 1.9350 0.0907 0.0080 4.2660
Correlation (C&E) -0.749
C=X E=Y XY X2 Y2
0.0390 -0.11 -0.0043 0.0015 0.0121
0.0137 5.35 0.0733 0.0002 28.6225
0.0569 -12.44 -0.7078 0.0032 154.7536
0.0311 6.6 0.2053 0.0010 43.5600
0.0460 3.91 0.1799 0.0021 15.28810.1867 3.3100 -0.2537 0.0080 242.2363
Correlation (D&E) 0.221
D=X E=Y XY X2 Y2
-0.036 -0.11 0.0040 0.0013 0.0121
-0.017 5.35 -0.0910 0.0003 28.6225
-0.011
-12.44 0.1368 0.0001 154.7536
-0.065 6.6 -0.4290 0.0042 43.5600
2.064 3.91 8.0702 4.2601 15.2881
1.9350 3.3100 7.6911 4.2660 242.2363
CAPITAL ASSET PRICING MODEL (CAPM)
ABBOT Lab Company
Beta = 4.863378
X Y XY x^2
4.43 8.98 39.7814 19.6249
4.31 5.98 25.7738 18.5761
-16.9 -6.98 117.962 285.61
-3.49 -3.46 12.0754 12.1801
-5.71 -5.16 29.4636 32.6041
-17.36 -0.64 225.0562 368.5952
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Risk = 38.1802679
PROSPERITY WAVING MILL
Beta -3.24
Risk -10.44
PAKISTAN REFINERY
Beta 9.8
Risk 67.8
GUL AHMED TEXTILE
Beta 11.5
Risk 78
KOHINOOR TEXTILE MILLS LIMITED
Beta -5.9
Risk -26.4
x y xy x^2
154.25 144 22212 23793.06
209 162.5 33962.5 43681
84 52.42 4403.28 7056
-451 -565 254815 203401
299 207 61893 89401
295.25 0.92 377285.78 367332.1
x y xy x^2
125 212 26500 15625
70 69 4830 4900
206 199 40994 42436
-198 -178 35244 39204
212 201 42612 44944
415 503 150180 147109
x y xy x^2
15 11 165 225
499 535 266965 24900145 -1444 -64980 2025
550 660 363000 302500
401 391 156791 160801
1510 153 721941 714552
x y xy x^2
-11 136 -1496 121
137 0 0 18769
172 121 20812 29584
14 993 13902 196
81 136 11016 6561
393 1386 44234 55231
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PORTFOLIO BETA ()
W Beta() w
0.1 4.863377984 0.486337798
0.15 -3.24 -0.4860.05 9.8 0.49
0.4 11.5 4.6
0.3 -5.9 -1.77
w = 3.320337798
Portfolio Return ()
=Rf+(Rm-Rf)p
=28.92s
TECHINAL ANALYSIS
Pakistan Refinery limited
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0
200
400
600
800
1000
1200
Jan
Feb
Mar Ap
rMa
yJu
nJuly
Aug
Sep
OctNo
vDe
c
2009
2008
2007
2006
2005
Momentum2005 =3722006=2562007=2572008=1032009=148Support Level2005=2002006=4002007=5002008=8002009=900Restricted Level
2005=4002006=6502007=9002008=10202009=1150
Limit Order=Purchase& Sale 2005=250 399
2006=420 6302007=630 9302008 =820 1120
2009=910 1140
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Kohinoor
0
5
10
15
20
25
30
35
Jan
Feb
Mar Ap
rMay Ju
nJuly
Aug
Sep
Oct
Nov
Dec
2009
2008
2007
2006
2005
Support Level2005=52006=8.52007=142009=14Restricted Level2005=62006=112007=162008=252009=27.5Momentum2005=5.5
2006=82007=152008=202009=23
Limit Order = purchase & Sales2005=5 5.52006=7 102007=13 162008=14 232009=18 27
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Abbott Labs
0
100
200
300
400
500
600700
800
900
1000
Jan
Feb
Mar Ap
rMay Ju
nJuly
Aug
Sep
OctNo
vDe
c
2009
2008
2007
2006
2005
Support Level2005=1302006=2802007=3002008=3002009=400Restricted Level2005=2002006=4502007=5802008=7802009=880Momentum Level
2005=1502006=3802007=4502008=6502009=700Limit Order=Purchase & Sale
2005=130 1992006=195 4302007=300 6802008=300 7602009=420 850
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P.W. Mills Limited
0
10
20
30
40
50
60
70
80
Jan Feb M ar Apr M ay Jun July Aug Sep Oct Nov Dec
2009
2008
2007
2006
2005
Support Level2005=192006=302007=402008=422009=52
Restricted level2005=232006=442007=562008=65
2009=70
Momentum2005=282006=372007=482008=532009=61
Limit Order=Purchase& Sales2005=19.5 22.52006=31 422007=41 54
2008=43 632009=54 59
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Gull Ahmed
0
50
100
150
200
250
300
Jan
Feb
M
ar
A
pr
M
ay
Jun
Ju
ly
Aug
Sep
O
ct
Nov
Dec
2009
2008
2007
2006
2005
Support Level2005=582006=952007=1302008=1502009=190Restricted level2005=952006=1452007=1752008=220
2009=270Momentum2005=732006=1252008=1852009=240
Limit Order=Purchase& Sales2005=60 91
2006=98 140
2007=135 170
2008=155 210
2009=196 265
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FORCASTING
Prosperity Waving Mill limitedIncome Statement
Balance Sheet
2009 2010
Assets 30%
Current Assets
Stores, spare parts and loose tools 27,399,424 35619251.2 35619251.2
Stock-in-trade 154,236,445 200507378.5 200507378.5
Trade debts 159,255,867 207032627.1 207032627.1
Advances 9,544,676 12408078.8 12408078.8
Short term prepayments 636,813 827856.9 827856.9Other receivables 1,367,205 1777366.5 1777366.5
Other financial assets 223,036,831 289947880.3 289947880.3
Advance income tax 27,547,593 35811870.9 35811870.9
Sales tax refundable 12,674,599 16476978.7 16476978.7
Cash and bank balances 6,335,052 8235567.6 8235567.6
Total Current Assets 622,034,505 808644856.5 808644856.5
NON-CURRENT ASSETS
Property, plant and equipment 925,210,329 1202773428 1202773428
Year 2009 201030%
Sales - net 3,634,559,244 4724927017
Less: Cost of sales 3,265,697,812 4245407156
Gross profit 368,861,432 479519861.6
Other operating income 6,420,540 8346702
375,281,972 487866563.6
Less: Saling and Admin: Expensive 267,162,255 347310931.5
Profit / (loss) before taxation 108,119,717 140555632.1
Provision for taxation 24,217,938 31483319.4
Profit / (loss) for the year 83,901,779 109072312.7
Earnings / (loss) per share 4.19508895 5.453615635
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Long term deposits 556,797 723836.1 723836.1
Total non-current assets 925,767,126 1203497264 1203497264
Total assets 1,547,801,631 2012142120 2012142120
Liabilities and Owners Equity
LIABILITIES
Current Liabilities 387,065,182 503184736.6 503184736.6
Non-current Liabilities 749097359 749097359 973826566.7
Total Liabilities 1,136,162,541 1,252,282,096 1477011303
Owners Equity 411639090 411639090 535130817
AFN 348,220,935
Total Liabilities and Owners Equity 1,547,801,631 2,012,142,120 2012142120Gull Ahmed Textile
Gull Ahmed Textile LIMITEDIncome Statement
2009 2010
25%
Sales - net 13906465 17383081.25Less: Cost of sales 11568139 14460173.75
Gross profit 2338326 2922907.5
Other operating income 26277 32846.25
2364603 2955753.75
Less: Saling and Admin: Expensive 1155752 1444690
EBIT 1208851 1511063.75
Financial cost 1038990 1298737.5
Provision for taxation 89651 112063.75
Profit / (loss) for the year 80210 100262.5
Balance SheetAssets 2009 2010
25%
Current Assets 7359272 9199090 9199090
Non Current Assets
Property, plant and equipment 6105833 7632291.25 7632291.25
Long term deposits 29034 36292.5 36292.5
Intangible Assets 28883 36103.75 36103.75
Long term Investment 58450 73062.5 73062.5
Long Term Loans & Advances 2262 2827.5 2827.5
Total Non Current Assets 6224462 7780577.5 7780577.5
Total Assets 13583734 16979667.5 16979667.5
Liabilities & Owners Equity
Current Liabilities
Trade Deposit and Other 1735918 2169897.5 2169897.5
Accrued Interest 178405 223006.25 223006.25
Short Term Borrowing 5332208 6665260 6665260
Current Maturity if Long term Loans 503087 628858.75 628858.75
Total Current Liabilities 7749618 9687022.5 9687022.5
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Non-current Liabilities
Long Term Financing 2566604 2566604 3208255
Deferred Liabilities 149280 149280 186600
2715884 2715884 3394855
Total liabilities 10465502
Total Capital 3118232 3118232 3897790
AFN 1458529
Total Liabilities & Owners Equity 13583734 16979667.5 16979667.5
Kohinoor Mills LimitedIncome Statement
Year 2009 2010
15%
Sales - net 7578457178 8715225755Less: Cost of sales 6919319192 7957217071
Gross profit 659137986 758008683.9
Other operating income 307843468 354019988.2
966981454 1112028672
Less: Selling and Admin: Expensive 922443011 1060809463
EBIT 44538443 51219209.45
Financial cost 706299453 812244371
Provision for taxation 60790553 60790553
Profit / (loss) for the year -722551563 -821815714.5
Balance Sheet
2009 2010
15%
Assets
Current Assets 3378900942 3885736083 3885736083
Non-Current Assets
Fixed Assets 5404085959 6214698853 6214698853
Long Term Investment 266629500 306623925 306623925
Long Term Security Deposit 1615751 1858113.65 1858113.65Total noncurrent Assets 5672331210 6523180892 6523180892
Total Assets 9051232152 10408916975 10408916975
Liabilities & Owners Equity
Current Liabilities 6109690788 7026144406 7026144406
Non-current Liabilities
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Long Term Finanacing Secured 948092066 948092066 1090305876
Deffered Tax 68862581 68862581 79191968.15
Total Non-Current Liabilities 1016954647 1016954647 1169497844
Total Liabilities 7126645435 8195642250
Owners Equity 1924586717 1924586717 2213274725AFN 441231204.6
Total Liabilities & Owners Equity 9051232152 10408916975 10408916975
ABBOT LABE LIMITEDIncome Statement
2009 2010
19%
Sales - net 8,431,080 8591270520
Service fee for toll manufacturing 19,038 19399722
8,450,118 8610670242
Cost of goods sold and services 5,987,872 6101641568
Gross profit 2,462,246 2509028674
Selling and distribution expenses 1,137,813 1159431447
Administrative expenses 165,455 168598645
1,158,978 1180998582
Other operating income 141,890 144585910
Other operating charges 132,246 134758674
1,168,622 1190825818
Finance cost 2,525 2572975
Profit before taxation 1,166,097 1188252843
Taxation - net 340,421 346888999
Profit for the year 825,676 841363844
Balance SheetASSETS 2009 2010
CURRENT ASSETS 19%
Stores and spares 69,097 82225.43 82225.43
Stock-in-trade 1,675,000 1993250 1993250
Trade debts 234,185 278680.15 278680.15
Loans and advances 41,277 49119.63 49119.63
Trade deposits 90,634 107854.46 107854.46
Accrued profit 1,425 1695.75 1695.75
Other receivables 81,053 96453.07 96453.07
Taxation recoverable 295,730 351918.7 351918.7
Cash and bank balances 770,784 917232.96 917232.96
Total Current Asset 3,259,185 3878430.15 3878430.15
Fixed assets - property, plant 1,662,785 1978714.15 1978714.15
Long-term loans and advances 31,779 37817.01 37817.01
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Long-term deposits 4,393 5227.67 5227.67
Long-term prepayments 6,434 7656.46 7656.46
Non-current assets 1,705,391 2029415.29 2029415.29
Total Assets 4,964,576 5907845.44 5907845.44
Liabilities & Owners Equity
Current Liabilities 1,606,489 1911721.91 1911721.91
Non-Current Liabilities 119,627 119,627 142356.13
Total Liabilities 1,726,116 2054078.04
Total Equity 3,238,460 3,238,460 3853767.4
AFN 638,037
Total Liabilities & Owners Equity 4,964,576 5,907,845 5907845.44PAKISTAN REFINERY
PAKISTAN REFINERYIncome Statement
2009 2010
25%
Sales 76,861,057 96076321.25
Cost of sales 79,874,195 99842743.75
Gross (loss) / profit -3,013,138 -3766422.5
Distribution cost -120,841 -151051.25
Administrative expenses -164,668 -205835Other operating expenses -3,127 -3908.75
Other income 263,172 328965
Operating (loss) / profit -3,038,602 -3798252.5
Finance cost -2,477,467 -3096833.75
Share of income of associate 14,671 18338.75
(Loss) / profit before taxation -5,501,398 -6876747.5
Taxation - credit / (charge) 929,743 1162178.75
Loss) / profit after taxation -4,571,655 -5714568.75
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PAKISTAN REFINERYBALANCE SHEET2009 2010
ASSETS 25%
CURRENT ASSETS
Stores, spares and chemicals 239,794 299742.5 299742.5
Stock-in-trade 8,367,282 10459102.5 10459102.5
Trade debts 14,431,063 18038828.75 18038828.75
Loans and advances 14,383 17978.75 17978.75
Accrued mark-up 13,160 16450 16450
Trade deposits 8,542 10677.5 10677.5
Other receivables 1,969,604 2462005 2462005
Tax refunds due from government 200,248 250310 250310
Investments
Cash and bank balances 3,909,833 4887291.25 4887291.25
Total Current Asset 29,153,909 36442386.25 36442386.25
Non-current assets
Property, plant and equipment 2,336,063 2920078.75 2920078.75
Intangible assets 6,739 8423.75 8423.75
Investment in associate 57,280 71600 71600
Long-term loans and advances 16,466 20582.5 20582.5
Long-term deposits 14,012 17515 17515
Deferred taxation 978,215 1222768.75 1222768.75
Retirement benefit obligations 4,161 5201.25 5201.25
Total non current assets 3,412,936 4266170 4266170
Total Assets 32,566,845 40708556.25 40708556.25
Liabilities & Owners Equity
Current liabilities 30,383,131 37978913.75 37978913.75
Non-current liabilities 4,372 4,372 5465
Total Liabilities 30,387,503 37984378.75
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Total Equity 2,179,342 2,179,342 2724177.5
AFN 545,929
Total Liabilities & Owners Equity 32,566,845 40708556.25 40708556.25