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AKD Research [email protected]

+92-21-111-253-111

Weekly Review

Supported by significant retail participation, indications of stability in the resumption of commer-cial activity post COVID-19, and better than expected consumer spending outlook, the KSE-100 index closed 3.3%WoW higher, continuing its upward trajectory into a third consecutive week.

Strong uptick in volumes (avg. daily turnover up 39.1%WoW) remained a sign of enhanced liquidi-ty. Successful biding for the HNWI and institutional investor portion of Pakistan first IPO in CY20

(after a fifteen month hiatus since ILP on March’19) which was oversubscribed by 1.7 times land-ing at a strike price at the upper bound of PkR20/sh, drove sentiments at the bourse. Additional news flows included: 1) the SBP extended deadline for consumers, small and medium businesses

to apply for a one-year moratorium on loan repayment till September 30th after recording freeze on nearly PkR600bn of principal amounts, 2) the State Bank slashed applicable rates for two re-

finance schemes to 5% from 7% to boost long-term investment both in domestic and export-oriented sectors, 3) the OICCI’s released the results of its latest Annual Security Survey 2020, cov-ering feedback on the security environment from July 2019 to June 2020, where foreign investors

have shown high level of satisfaction on the fast improving security environment in the main busi-ness centers of Pakistan, Karachi and Lahore, raising the security satisfaction profile of the two cities, and 4) the IMF sponsored program of US$6bn for Pakistan remain contingent upon Islama-

bad’s willingness to comply with tariff adjustments on electricity and gas as well as to undertake reform path to evolve staff level agreement on completion of second review. Stocks posting ma-

jor gains during the week included: 1) NBP (+15.4%WoW), 2) CHCC (+15.2%WoW), 3) INDU (+14.5%WoW), and 4) PAEL (+13.9%WoW), whereas on the flipside, laggards were: 1) ANL (-6.9%WoW), 2) FCEPL (-3.6%WoW), and 3) DAWH (-3.0%WoW). Volume leaders during the week were:

1) TRG (147.2mn shares), 2) PAEL (144.3mn shares), 3) MLCF (92.3mn shares), and 4) HASCOL (90.2mn shares).

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

Barring significant improvement in guidance from major sectors amidst an environment of wider uncertainty (particularly covering the runway for normalization of consumer spending), going by quantitative measures, market momentum is likely to remain choppy (KSE-100 index failing to rise for more than three consecutive weeks CYTD, feat last achieved in Nov-Dec’19 rally). Even so, with results season just around the corner, investors could be nudged to re-asses portfolios to accommodate expected profitability over the previous quarter and by extension, payouts.

10 July 2020

Outlook

Top-5 Volume Leaders

Symbol Volume (mn)

TRG : 147.22

PAEL : 144.32

MLCF : 92.29

HASCOL : 90.17

LOTCHEM : 89.85

Source: PSX & AKD Research

Indic e s KSE- 10 0 KSE- 3 0

This week 36,190 15,694

Last week 35,051 15,203

Change 3.25% 3.23%

Indic e s KMI- 3 0 Allsha re

This week 57,654 25,842

Last week 56,459 25,087

2.12% 3.01%

Mkt Ca p. PkRbn US$ bn

This week 6,842 41.13

Last week 6,642 39.97

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

This week 348.81

Last week 250.82

Change 39.1%


Index & Volume Chart KSE100 Gainers & Losers

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AKD Securities Limited

10 July 2020

StockSmart


This Week’s Daily Reports

2

FFBL & EFERT_2QCY20F Result Previews, (AKD Daily, Jul 10, 2020)

Fauji Fertilizer Bin Qasim Limited: FFBL is expected to announce its 2QCY20F earnings on 24th Jul, 2020. We expect the company to post 2QCY20 NPAT of PkR448mn (EPS: PkR0.48) as com-pared to NLAT of PkR84mn (LPS: PkR0.09) in the same period last year. The turnaround in the bottomline is expected on the back of gross margins expected at 18.8%, up 780bps YoY due to (i) GIDC elimination and (ii) decline in intl. coal prices, resulting in cheaper feed and fuel gas cost. However, 57% YoY lower other income, despite recording dividend from AKBL may keep the bottomline growth in check. On a cumulative basis, FFBL is expected to post NLAT of PkR2.6bn (LPS: PkR2.78) vs. PkR1.9bn (LPS: PkR2.09) in the same period last year, dragged down by disappointing 1QCY20 results. On a sequential basis, the turnaround is expected on the back of: (i) 56% QoQ higher topline led by 2.5x/33% QoQ higher urea/DAP offtake, (ii) gross margins expected to be in double digits as opposed to -6% in 1QCY20, (iii) 54% QoQ higher other income, and (iv) 28% QoQ decline in finance cost due to lower discount rate. Downside risk to our estimates include: higher than anticipated exchange losses and/or taxation.

Engro Fertilizer Limited: EFERT is expected to post a 29% YoY higher NPAT of PkR4.1bn (EPS: PkR3.08) as compared to PkR3.1bn (EPS: PkR2.38) in the same period last year. The increase in earnings are expected on the back of (i) 8% YoY higher topline, where anticipated 28% YoY increase in urea offtake is expected to neutralize 23% YoY decline in DAP offtake and retention prices, (ii) 35% YoY decline in finance cost due to lower discount rate and (iii) lower effective tax rate of 29% vs. 48% in the same period last year (reversal of deferred tax asset in 2QCY19). On the flip side, 86%YoY decline in other income due to absence of one-off recorded in SPLY is expected to contain the earnings growth. On a sequential basis, the 7.2x increase in earnings is expected to be a function of 3.9/2.6x improved urea/DAP offtake, according to provisional numbers. To recall, EFERT brought its urea price at par with FFC in Mar’20, which coupled with pre-buying in Jun’20 (negative budgetary measures, potential gas price hike in offing) led to sequential uptick in offtakes. We also expect the company to announce first interim cash divi-dend of PkR2.5/sh alongside with result announcement, vs. PkR5.0/sh announced in 2QCY19.

BAFL: Price decline makes yield attractive, (AKD Daily, Jul 9, 2020)

Bank Alfalah Limited’s (BAFL) stock price receded by 28.7% in the past 6M matching downward revisions in the bank’s one-year fwd TP to PkR38.0/sh as against PkR48.9/sh previously. In turn, this softening has raised the lure of attractive dividend yield on offer (8.7/8.7% for CY20/21).

Revisions were prompted by weakened earnings outlook given, i) higher sensitivity to interest rates amongst conventional peers (Mar’20: 1.21x vs. avg. 1.02x of our conventional banking universe), and ii) late cycle growth push (50 branches added over the past 1Y, IT related ex-penses up +22.6%YoY) could prop up admin costs in the medium term.

Given the riskier lending book, we have incorporated 0.8/0.8/0.2% cost of provisioning for CY20/21/22F however, i) active management of risks, and ii) authorities focused on bailing out vulnerable sectors/segments, could keep a lid on costs.

Repricing gains and realization of surplus on bonds are the two factors likely governing earn-ings in 2QCY20. We expect bank’s earnings to clock in at PkR1.82/sh, +11.9/-ve 1.1% QoQ/YoY culminating into a 1HCY20 NPAT of PkR6.1bn (EPS: PkR3.4) vs. NPAT of PkR6.5bn (EPS: PkR3.6) in the same period last year.

Pakistan Commodities: Swimming against uncertain tides, (AKD Daily, Jul 08, 2020)

Gradual re-opening of global economies as social costs subside and macro fundamentals recov-er, reflecting on commodities with TRJ index +5.2%MoM, building upon gains from May’20 (+13.0%MoM). However, regional disparities in number of new COVID cases limit economic recovery on a global scale.

This is evidenced from projections by major forecasting agencies. IMF has revised down its global GDP contraction forecast for 2020 to –ve 4.9% from –ve 3.0% in Apr’20. Moreover, a much larger retreat in developed (–8.0%) than emerging economies (–3.0%) is estimated.

Global crude benchmarks moved starkly higher (Brent/Arab Light climbed 13.5/50.4%MoM) to average US$40.0/35.1/bbl for the month of June’20, underpinned by OPEC+ member countries

Jul 10, 2020

Jul 09, 2020

Jul 06, 2020

Jul 07, 2020

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10 July 2020

StockSmart


This Week’s Daily Reports

3

adhering to planned output curbs (106% compliance in June’20 vs. 85% in May’20 according to Platts).

FAO price index avg. at 93.2pts in Jun’20, +2.4%MoM reversing the declining trend wit-nessed since the beginning of CY20 helped by sharp increases in vegetable oils, sugar and dairy products while meat and cereals continue their south journey.

Pace of reopening of business activities are likely to dictate prices with questions over “second wave” and “infection peak” fueling uncertainty over the shape of any recovery. Rise in energy prices are negative for Pakistan, with demand for exported agriculture products (including meat, fruits, vegetables, rice) having to find new markets due to global trade dis-locations.

Pakistan Cement: Ending FY20 on a high, (AKD Daily, Jul 07, 2020)

Local cement dispatches for Jun’20 increased by 20%YoY as restrictions related to COVID-19 eased where backlog of construction being cleared must have played a part. Moreover, pre-buying before price increase cannot be ruled as well as prices were increased by PkR15-20/bag in the last week of Jun’20.

Exports from south stood at 1.6x of local dispatches, increasing by 2.6/1.1x YoY/MoM po-tentially as the backlog gets cleared while economic activity gradually resumed in Bangla-desh and Sri Lanka, propelling clinker demand.

Overall, though low economic activity was a drag on local cement sales (up by 3.9%YoY for 9MFY20), emergence of COVID-19 dealt a severe blow, sending overall growth into negative territory as local dispatches ended the year at ~40mn tons, down 0.9%YoY.

We maintain LUCK (TP: PkR635.9/sh—29% upside), DGKC (TP: PkR105.0/sh—14% upside) and MLCF (TP: PkR39.9/sh—45% upside) as our preferred play from the sector with LUCK being the safest play with a diversified portfolio, while MLCF and DGKC have manageable debt levels where cost saving measures are expected to significantly improve efficiency.

OGDC: All hands on deck, (AKD Daily, Jul 06, 2020)

News reports highlighting the commencement of production from wells Dhok Hussain and Togh (both in Kohat district) bring the largest domestic E&P firm (50/28% of domestic oil/gas production) back into the limelight, where we re-iterate core catalysts driving our ‘BUY’ call on the stock (TP of 172.2/sh).

Our forward earnings estimates are underpinned by FY21/22 Arab Light Price estimate of US$40bbl and US$ appreciation of 4.5/4.5% against the PkR, where the fall in market capi-talization (down ~18%YoY) extended deviations to crude oil fundamentals with the stock currently trading at an implied oil price of US$~15/bbl — a discount of ~65% from the pre-vailing crude price bench-mark (Arab Light currently at US$43.1/bbl) vs. LT avg. of ~30%.

We cover OGDC’s stable success ratios, inroads to meeting planned drilling targets and up-coming LT projects expected to counter depletions and highlight the firm’s relatively frugal exploration efforts, mitigating negative impact from dry wells.

A dollar denominated top-line provides effective hedging in case of currency devaluation, coupled with substantial room to curtail CAPEX, keeps us comfortable on our payout as-sumption (37% for F21). We have a BUY call on OGDC with our June’21 NAV based TP of PkR172.2/sh, implying upside of 53% from last close, while the company’s FY21 dividend yield stands at 6.7%, taking total return to ~60%.


10 July 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 10-Jul-20 3-Jul-20 WoW CYTD

TRJ-CRB Points 140.4571 140.5978 -0.10% -24.40%

Nymex (WTI) US$/bbl. 38.67 40.65 -4.87% -36.67%

ICE Brent US$/bbl. 41.25 42.37 -2.64% -37.90%

N. Gas Henry Hub US$/Mmbtu 1.78 1.611 10.49% -14.83%

Cotton USd/Pound 70.15 70.7 -0.78% -10.47%

Gold US$/Tr.Oz 1808.97 1775.95 1.86% 19.23%

Sliver US$/Tr.Oz 18.7709 18.0214 4.16% 5.15%

Copper US$/MT 6300.35 6023.5 4.60% 2.46%

Platinum US$/Oz 840 810.75 3.61% -13.10%

Coal US$/MT 53.9 55.1 -2.18% -32.37%

SPOT 10-Jul-20 3-Jul-20 Chg +/- WoW CYTD

Dollar Index 96.695 97.172 -0.477 -0.49% 0.32%

USD/PkR 166.176 166.925 -0.749 -0.45% 7.28%

USD/JPY 106.790 107.510 -0.720 -0.67% -1.68%

EUR/USD 1.130 1.125 0.005 0.43% 0.74%

GBP/USD 1.261 1.248 0.013 1.02% -4.88%

AUD/USD 0.696 0.694 0.002 0.26% -0.91%

NZD/USD 0.657 0.653 0.004 0.66% -2.46%

CHF/USD 0.941 0.946 -0.004 -0.47% -2.61%

CAD/USD 1.360 1.355 0.006 0.42% 4.73%

USD/KRW 1,204 1,199 5.800 0.48% 4.17%

CNY/USD 7.000 7.067 -0.066 -0.94% 0.53%

Country Bloomberg Code 10-Jul-20 3-Jul-20 WoW CYTD

Pakistan KSE100 Index 36,190 35,051 3.25% -11.2%

Srilanka CSEALL Index 4,993 5,051 -1.15% -18.5%

Thailand SET Index 1,351 1,372 -1.59% -14.5%

Indonesia JCI Index 5,031 4,974 1.16% -20.1%

Malaysia FBMKLCI Index 1,592 1,553 2.52% 0.2%

Philippines PCOMP Index 6,197 6,373 -2.75% -20.7%

Vietnam VNINDEX Index 871 848 2.78% -9.3%

Hong Kong HSI Index 25,727 25,373 1.40% -8.7%

Singapore FSSTI Index 2,653 2,653 -0.01% -17.7%

Brazil IBX Index 41,970 40,982 2.41% -13.8%

India SENSEX Index 36,594 36,021 1.59% -11.3%

China SHCOMP Index 3,383 3,153 7.31% 10.9%

S&P SPX Index 3,152 3,130 0.70% -2.4%

DJIA INDU Index 25,706 25,827 -0.47% -9.9%

NASDAQ Composite CCMP Index 10,548 10,208 3.33% 17.6%

UK UKX Index 6,072 6,157 -1.38% -19.5%

Germany DAX Index 12,518 12,528 -0.08% -5.5%

Qatar DSM Index 9,316 9,212 1.13% -10.6%

Abu Dhabi ADSMI Index 4,295 4,312 -0.38% -15.4%

Dubai DFMGI Index 2,082 2,061 1.00% -24.7%

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

Oman MSM30 Index 3,494 3,512 -0.51% -12.2%

Saudi Arabia SASEIDX Index 7,417 7,312 1.43% -11.6%

MSCI EM MXEF Index 1,080 1,033 4.51% -3.1%

MSCI FM MXFM Index 484 483 0.24% -17.4%

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10 July 2020

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

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AKD Securities Limited StockSmart


Market PER Chart 2021

10 July 2020

AKD Universe Valuations

Source: AKD Research

Market P/BVS Chart 2021

Source: AKD Research

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10-Jul-20 2017 2018 2019 2020F 2021F

EPS (PkR) 5.82 6.48 7.70 7.40 7.55

EPS chg (%) (15.24) 11.33 18.77 (3.88) 2.03

EPS chg (%) ex-E&P (24.93) 6.73 (0.50) 27.90 17.60

Book Value per Share (PkR) 41.89 44.59 49.40 53.55 57.77

Payout (%) 55.32 49.43 42.43 43.80 53.58

Valuations

Price to Earnings (x) 8.28 7.47 6.65 7.48 7.14

PER (Ex-Banks & E&Ps) (x) 8.41 7.71 8.51 9.15 6.88

Price to Book (x) 1.14 1.08 0.98 0.91 0.89

Price to CF (x) 11.24 8.47 11.58 9.04 5.81

Earnings Yield (%) 12.08 13.38 15.04 13.36 14.01

Dividend Yield (%) 7.42 6.87 6.95 6.95 8.81

EV / EBITDA (x) 6.07 6.02 5.23 4.41 4.49

Profitability

Return on Equity (%) 13.90 14.54 15.58 13.14 12.95

Return on Assets (%) 2.25 2.29 2.45 2.09 2.06

Chg in Sales (%) 16.05 17.88 21.76 (1.62) (4.13)

Gross Margin (%) 35.96 35.14 34.08 34.13 36.51

Operating Margin (%) 24.83 24.40 24.03 23.11 24.54

Net Margin (%) 11.24 10.62 10.36 9.62 10.67

7



AKD Universe Active Coverage Cluster’s Valuations

10 July 2020

Stock Symbol Price TP Stance

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

Automobile and Parts

*Indus Motors INDU 1,138.38 1,375.00 Buy 174.49 68.27 74.68 6.52 16.67 15.24 2.23 2.07 1.91 10.1 2.2 2.6

Pak Suzuki Motors PSMC 178.85 130.00 Sell (35.45) (38.81) 1.73 n.a n.a 103.29 0.57 0.65 0.64 - - 0.3

Cements

DG Khan Cement DGKC 95.97 104.98 Neutral 3.67 (6.39) 5.89 26.12 n.a 16.30 0.59 0.62 0.60 1.0 - 1.2

Lucky Cement LUCK 496.41 635.85 Buy 32.44 8.50 25.86 15.30 58.38 19.20 1.70 1.69 1.55 1.3 - 1.1

Maple Leaf Cement MLCF 29.28 39.89 Buy 2.24 (3.09) 3.34 13.07 n.a 8.76 1.05 0.97 0.87 1.7 - 1.7

Fauji Cement Company FCCL 17.99 18.38 Sell 2.05 (0.09) 1.32 8.79 n.a 13.67 1.19 1.19 1.17 8.3 - 5.9

Pioneer Cement Limited PIOC 69.41 50.12 Sell 3.48 (5.74) (0.32) 19.95 n.a n.a 1.18 1.32 1.33 - - -

Cherat Cement Co CHCC 105.86 65.61 Sell 9.98 (9.53) 2.39 10.61 n.a 44.21 1.59 1.89 1.80 0.9 - -

Engineering

*Amreli Steels Ltd. ASTL 39.02 49.00 Buy 0.11 0.29 2.74 353.08 135.09 14.24 0.95 0.95 0.89 - - -

Fertilizers

*Engro Corporation ENGRO 300.90 331.10 Neutral 28.69 47.72 52.27 10.49 6.31 5.76 0.88 0.77 0.67 8.0 8.8 8.8

Engro Fertilizers Limited EFERT 63.59 55.51 Sell 12.63 8.75 8.31 5.03 7.27 7.65 1.96 1.92 1.90 20.4 12.6 12.6

Fauji Fert. Bin Qasim FFBL 16.85 30.02 Buy (6.34) 0.14 1.55 n.a n.a 10.87 2.30 2.26 1.87 - - -

Fauji Fertilizer Company FFC 110.52 127.00 Buy 13.45 15.17 16.07 8.22 7.28 6.88 3.95 3.55 3.14 9.8 10.9 10.9

Fatima Fertilizer FATIMA 27.91 34.43 Buy 7.54 5.98 4.67 3.70 4.67 5.98 0.80 0.72 0.67 7.2 8.4 6.6

Oil & Gas

Oil & Gas Development OGDC 114.51 172.20 Buy 27.53 24.90 20.72 4.16 4.60 5.53 0.66 0.59 0.54 9.6 7.2 5.9

Pak Oilfields POL 365.04 389.00 Sell 59.44 55.58 44.63 6.14 6.57 8.18 1.77 1.57 1.43 13.7 11.0 9.6

Pakistan Petroleum PPL 94.71 143.40 Buy 27.18 18.92 17.05 3.48 5.01 5.55 0.75 0.69 0.63 2.1 - 4.2

Hascol Petroleum HASCOL 14.60 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Attock Petroleum APL 308.85 400.35 Buy 39.79 16.37 29.73 7.76 18.86 10.39 1.62 1.66 1.48 6.5 2.7 5.8

Pakistan State Oil PSO 164.69 214.62 Buy 22.55 8.24 20.20 7.30 20.00 8.15 0.65 0.65 0.61 6.1 1.2 5.2

Power

Hub Power Co. HUBC 72.22 159.96 Buy 9.37 18.09 20.26 7.71 3.99 3.57 2.38 1.73 1.44 - - 9.7

K-Electric Co. KEL 3.19 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power KAPCO 21.09 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Cable & Electrical Goods

Pak Elektron Ltd PAEL 27.87 24.40 Sell 1.68 0.21 2.15 16.59 132.71 12.96 0.56 0.55 0.54 - - 3.6

Personal Goods

Nishat Mills NML 83.97 132.00 Buy 16.66 8.78 11.00 5.04 9.56 7.63 0.44 0.43 0.41 4.8 2.7 3.9

*Nishat Chunian Ltd. NCL 35.36 60.53 Buy 13.19 5.87 7.08 2.68 6.03 4.99 0.55 0.53 0.49 11.3 6.4 7.8

Banks

Allied Bank Limited ABL 77.99 88.90 Neutral 12.65 13.41 10.29 6.17 5.82 7.58 0.76 0.73 0.73 10.3 11.5 11.5

Bank Al Habib BAHL 54.84 65.00 Buy 10.07 8.18 8.41 5.45 6.71 6.52 0.98 0.88 0.81 6.4 7.3 7.3

Bank AlFalah BAFL 36.22 38.00 Neutral 7.34 6.78 5.61 4.93 5.34 6.46 0.72 0.62 0.59 11.0 8.3 8.3

Habib Bank Limited HBL 106.49 154.40 Buy 10.45 14.47 12.02 10.19 7.36 8.86 0.70 0.65 0.62 4.7 5.6 6.6

Habib Metropolitn Bank HMB 29.39 45.70 Buy 6.34 6.63 6.46 4.64 4.43 4.55 0.64 0.56 0.51 8.5 8.5 8.5

MCB Bank Limited MCB 165.08 211.00 BUY 20.14 18.57 17.29 8.20 8.89 9.55 1.14 1.08 1.01 10.3 10.3 10.3

Meezan Bank Limited MEBL 73.56 100.00 Buy 12.12 11.92 10.09 6.07 6.17 7.29 1.51 1.36 1.27 6.8 8.2 8.2

National Bank of NBP 30.28 45.60 Buy 7.79 7.96 6.81 3.88 3.80 4.44 0.27 0.25 0.23 - - -

United Bank Limited UBL 110.87 160.00 Buy 15.60 15.58 15.70 7.11 7.12 7.06 0.71 0.67 0.64 10.8 10.8 11.7

The Bank Of Punjab BOP 9.30 13.90 Buy 3.12 2.60 1.88 2.98 3.58 4.94 0.52 0.48 0.46 8.1 10.8 10.8

UR - Under Review *earnings estimates are subject to revision due to COVID-19

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

8


10 July 2020

StockSmart


AKD Universe Coverage Cluster’s Performance


Stocks Symbol Price 1 Year 1 Year

10-Jul-20 1M 3M 6M 12M CYTD High Low

KSE-100 Index 36,190.40 3.2 13.0 -16.2 6.9 -11.2 43,218.7 27,228.8

Automobile and PartsIndus Motors INDU 1,138.38 19.5 52.1 8.4 -5.9 -2.0 1244.71 700.38Pak Suzuki Motors PSMC 178.85 5.8 28.5 -20.9 -17.1 -22.5 290.93 124.21

CementsDG Khan Cement DGKC 95.97 16.3 28.9 25.2 84.5 29.2 95.97 42.31Lucky Cement LUCK 496.41 6.2 21.1 0.5 31.0 15.9 566.47 310.30Maple Leaf Cement MLCF 29.28 12.1 22.9 28.2 26.3 26.5 30.74 13.79Fauji Cement Company FCCL 17.99 7.1 13.1 4.8 15.4 15.6 18.69 11.68Pioneer Cement Limited PIOC 69.41 8.9 94.2 131.2 215.8 127.6 69.41 17.37Cherat Cement Limited CHCC 105.86 21.3 42.3 102.5 230.6 99.5 105.86 24.78

EngineeringAmreli Steel Ltd ASTL 39.02 8.4 24.5 4.9 71.5 8.0 41.61 15.83

FertilizersEngro Fertil izers Ltd. EFERT 63.59 5.4 14.0 -15.1 -4.3 -13.4 78.57 50.72Engro Chemical ENGRO 300.90 3.5 7.8 -16.4 12.5 -12.8 366.00 234.78Fatima Fertil izer FATIMA 27.91 -0.3 20.0 2.0 -1.4 5.0 28.72 20.82Fauji Fert. Bin Qasim Ltd. FFBL 16.85 -0.2 17.8 -19.0 -9.2 -13.7 24.54 11.79Fauji Fertil izer Company FFC 110.52 0.5 15.5 7.2 16.4 8.9 112.14 82.71

Cable & Electrical Goods

Pak Elektron Limited PAEL 27.87 15.3 28.3 -0.5 40.8 3.0 29.50 14.32

Oil & GasOil & Gas Development OGDC 114.51 0.6 20.9 -25.7 -12.5 -19.5 154.21 75.01Pak Oilfields POL 365.04 3.7 23.5 -22.1 -8.6 -18.3 473.43 241.11Pakistan Petroleum Ltd. PPL 94.71 0.7 9.6 -36.5 -35.0 -30.9 151.82 69.13Pakistan State Oil PSO 164.69 5.1 16.6 -23.3 1.2 -14.1 216.54 113.98Attock Petroleum Ltd. APL 308.85 8.8 18.2 -19.3 3.0 -16.5 394.43 211.87Hascol Petroleum HASCOL 14.60 1.9 -3.6 -45.7 -75.7 -45.7 61.20 10.65

PowerHub Power Co. HUBC 72.22 -3.8 -8.3 -30.0 -8.6 -22.6 103.21 57.40K-Electric Limited KEL 3.19 3.9 10.0 -31.0 -21.2 -27.0 4.77 2.65Kot Addu Power KAPCO 21.09 -1.6 -0.6 -29.0 -40.6 -33.1 35.49 15.00

Personal Goods

Nisaht (Chunian) Ltd. NCL 35.36 3.8 11.1 -23.3 4.6 -17.1 47.63 23.78Nishat Mills NML 83.97 2.2 26.1 -23.2 -8.4 -20.9 117.81 54.07

BanksAllied Bank Limited ABL 77.99 3.3 -7.5 -22.7 -23.9 -18.4 104.71 66.82Bank AlHabib Limited BAHL 54.84 59.3 48.5 -32.8 -29.5 -28.0 82.00 28.79Bank AlFalah BAFL 36.22 6.0 -7.3 -29.6 -15.7 -20.7 52.99 28.79Habib Bank Limited HBL 106.49 1.4 -1.8 -37.0 -7.8 -32.4 171.24 94.78Bank of Punjab BOP 9.30 2.3 10.8 -30.2 5.8 -17.9 14.13 7.01Habib Metropolitan HMB 29.39 4.2 -2.0 -27.0 -19.3 -19.1 42.00 27.30MCB Bank Limited MCB 165.08 -0.8 8.3 -25.7 -5.8 -19.4 224.53 132.89Meezan Bank Limited MEBL 73.56 7.0 12.8 -27.7 -11.4 -22.7 106.21 55.66National Bank of NBP 30.28 5.8 5.2 -32.2 -17.8 -30.1 46.30 25.53United Bank Ltd UBL 110.87 -5.0 0.9 -39.1 -24.5 -32.6 181.96 89.44

Absolute Performance (%)

9


10 July 2020

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

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

Monetary Rates

T-Bills - 3M % 12.39 12.93 13.43 13.43 13.43 13.43 13.43 13.53 13.43 13.1 n.a n.a n.a

T-Bills - 6M % 12.46 12.98 13.48 13.48 13.48 13.48 13.48 13.48 13.48 13.15 n.a n.a n.a

T-Bills - 12M % 12.6 13.1 13.6 13.6 13.6 13.6 13.6 13.2 13.6 13.26 n.a n.a n.a

PIB 10Y % 13.68 13.67 13.29 12.18 11.3 11.35 11.09 11.04 11.18 10.16 8.47 8.25 8.61

KIBOR 6M % 12.86 13.3 13.82 13.65 13.08 13.48 13.5 11.23 13.23 12.34 12.08 7.75 7.58

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

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

Inflation

National CPI Inflation % 8 8.4 10.5 11.4 11.0 12.7 12.6 14.6 12.0 10.2 8.5 8.2 8.6

Core inflation (Urban) % 7.3 8.2 8.5 8.4 7.7 7.5 7.5 7.9 8.0 7.4 7.7 7.3 7.6

Core inflation (Rural) % 6.7 7.8 8.8 8.8 8.6 8.4 8.1 9 9.4 9.4 9.8 9.7 10.0

Food inflation (Urban) % 7.5 7.9 11.9 15.0 13.7 16.6 16.7 19.5 15.2 13.0 10.4 10.6 12.9

Food inflation (Rural) % 9.1 9.3 12.6 15.0 14.6 19.3 19.7 23.8 19.7 15.5 12.9 13.7 15.2

External Indicators

Export (PBS) US$ (mn) 1,717 1,894 1,859 1,769 2,024 2,011 1,993 1,970 2,140 1,814 957 1,396 1,592

Import (PBS) US$ (mn) 4364 4019 3658 3,785 4,074 3,940 4,037 4,037 4,185 3,316 3,088 2,863 3,715

Trade Deficit (PBS) US$ (mn) (2,647) (2,125) (1,799) (2,016) (2,050) (1,929) (2,044) (2,067) (2,045) (1,502) (2,131) (1,467) (2,123)

Export (SBP) 1800 2228 1,894 1,888 2,189 2,111 2,108 2,052 1,993 1,820 1,407 1,272 n.a

Import (SBP) 3997 4182 3,523 3,326 3,632 3,682 3,791 3,912 3,563 3,321 3,140 2,806 n.a

Trade Deficit (SBP) (2,197) (1,954) (1,629) (1,438) (1,443) (1,571) (1,683) (1,860) (1,570) (1,501) (1,733) (1,534) n.a

Home Remittances US$ (mn) 1,646 2,039 1,691 1,748 2,001 1,820 2,097 1,907 1,825 1,894 1,790 1,873 n.a

Current Account US$ (mn) (995) (678) (614) (284) 70 (364) (367) (534) (210) n.a n.a n.a n.a

Banking Sector

Deposits PkR (bn) 14,458 13,747 13,977 14,026 13,912 14,312 14,632 14,673 14,815 15,126 14,476 15,481 n.a

Advances PkR (bn) 8,097 7,991 7,994 7,975 8,019 8,095 8,158 8,164 8,212 8,259 8,217 8,357 n.a

Investments PkR (bn) 7,624 8,731 8,019 9,269 7,918 7,886 8,801 8,366 8,725 9,297 9,794 10,382 n.a

W. A. lending rate % 11.87 12.69 12.99 13.31 13.52 12.74 12.73 13.35 13.23 13.01 12.00 11.57 n.a

W. A. deposit rate % 5.71 6.18 6.47 6.52 6.69 6.73 6.65 6.95 7.00 6.91 6.91 5.11 n.a

Spread rate % 6.16 6.51 6.52 6.79 6.83 6.01 6.08 6.40 6.23 6.10 5.09 6.46 n.a

Public Finance

Tax collection PkR (bn) 508.40 277.30 298.60 383.10 n.a n.a n.a n.a n.a n.a n.a n.a n.a

Direct taxes PkR (bn) 251.00 95.90 88.00 165.30 n.a n.a n.a n.a n.a n.a n.a n.a n.a

Indirect Taxes PkR (bn) 257.40 181.40 210.60 217.80 n.a n.a n.a n.a n.a n.a n.a n.a n.a

Currency

Fx Reserves US$ (mn) 14,477 15,144 15,644 15,228 15,424 16,003 17,930 18,645 18,881 17,098 18,755 16,943 n.a

USDPkR - Interbank PkR/USD 156.41 159.19 158.24 156.33 156.04 155.40 155.01 154.74 154.34 159.02 164.43 160.58 165.53

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

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

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10 July 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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