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AKD Research [email protected]

Weekly Review

Despite oil rising to its 40-month high of ~US$73/bbl, the KSE-100 could not sustain the am-nesty scheme-led rally, slipping -565.76pts (-1.21%WoW) to close at 46,071.86pts on the back of: 1) FATF/IMF raising concerns over the Tax-amnesty scheme aimed at bringing off-shore assets back to Pakistan, 2) ADB becoming skeptical over Pakistan’s growth outlook in FY19 due to Balance of Payment constraints and 3) SC ordering silicosis centers to be set up at all cement factories across the country, leading to pressure on the cement sector. Aver-age daily traded volumes for the week depressed to 247mn shares (-4.59%WoW) where main activity was witnessed in 1) KEL (95.67mn shares), 2) EPCL (75.49mn shares), 3) LOTCHEM (52.21mn shares), 4) FFL (47.68mn shares) and 5) AGL (44.3mn shares). Major news highlights during the week include: 1) power sector receivables crossing PkR805bn (+10.27%FYTD) for Jan 31’18 vs. PkR750bn of Jun 30’17, 2) Federal Cabinet ratifying the decision of Cabinet Committee on Privatization (CCoP) for issuance of National Security Cer-tificate for sale of KES Power’s 66.4% shares in KEL, 3) exports/imports for Mar’18 rising 24%/5%, narrowing trade deficit 5%YoY to US$3.04bn for the month, 4) remittances grow-ing 3.5% for 9MFY18 to US$14.6bn and 5) gov’t required to pay US$3.3bn in debt servicing by Jun’18, further weakening the Forex reserves. Outperformers of the AKD universe during the week included: 1) FFC (3.47%WoW), 2) KEL (2.89%WoW), 3) FFBL (2.04%WoW) , 4) PPL (0.90%WoW) and 5) EFERT (0.88%WoW) while the laggards were: 1) KAPCO (-8.07%WoW), 2) FCCL (-5.19%WoW), 3) DGKC (-4.65%WoW), 4) HBL (-4.48%WoW) and 5) CHCC (-4.37%WoW). Foreigners seemed to take advantage of the recent PkR/USD devaluations with con-secutive third week of net inflows, flowing -in US$17.45mn for the week vs. US$3.62mn in the previous week.

StockSmart

AKD Equity Research / Pakistan

Pakistan Weekly Update

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

Important disclosures

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

www.akdsecurities.net

AKD Securities

TREC Holder & Registered Broker

Pakistan Stock Exchange

REP-108

Find AKD research on Bloomberg

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

Investors look forward to upcoming results season starting next week (POL, NRL, ATRL, APL,

BAHL, UBL, etc.) with special focus on companies that are to benefit from the PkR devalua-

tion (E&Ps, Power and Textiles from our coverage Universe). That said, any pre-budget pro-

posals can also direct the sentiments of market- players accordingly.

13 April 2018

Outlook

Index & Volume Chart

Source: PSX & AKD Research

Universe Gainers & Losers

46,581

46,477

46,486 46,332

46,072

45,800

45,900

46,000

46,100

46,200

46,300

46,400

46,500

46,600

46,700

(40,000)

10,000

60,000

110,000

160,000

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260,000

310,000

9-Apr 10-Apr 11-Apr 12-Apr 13-Apr

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Top- 5 Volume Leaders

Symbol Volume (mn)

KEL : 95.67

EPCL : 75.49

LOTCHEM : 52.21

FFL : 47.68

AGL : 44.30


Indices KSE-100 KSE-30

This w eek 46,072 23,031

Last w eek 46,638 23,460

Change -1.21% -1.83%

Indices KMI-30 Allshare

This w eek 78,677 33,097

Last w eek 79,229 33,313

Change -0.70% -0.65%

Mkt Cap. PkRbn US$bn

This w eek 9,443 81.68

Last w eek 9,532 82.46

Change -0.93% -0.94%

Avg. Daily Turnover ('mn shares)

This w eek 247.47

Last w eek 259.37

Change -4.59%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

FFC

KEL

FFB

L

PPL

EFER

T

CH

CC

HBL

DG

KC

FCCL

KA

PCO

33,000

35,000

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-50

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Apr-

17

Ma

y-1

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Jun-1

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Jul-1

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Sep-1

7

Oct-

17

Nov-1

7

Dec-1

7

Jan-1

8

Feb

-18

Ma

r-1

8

Apr-

18

(Index)(share mn)

Volume (LHS) KSE-100 Index

AKD Securities Limited

13 April 2018

StockSmart


This Week’s Daily Reports

2

Apr 12, 2018

POL : 3QFY18F Result Previews, (AKD Daily, Apr 13, 2018)

POL’s BoD is scheduled to meet on Monday, Apr 16’18 to deliberate on its 3QFY18 accounts, where we anticipate the company to publish earnings of PkR3.75bn (EPS: PkR15.85) cumu-lating to 9MFY18 profitability of PkR8.51bn (EPS: PkR35.96), up 14.0% from last year’s PkR7.47bn (EPS: PkR31.55). While the 9M profitability is higher on account of elevated oil prices (Arab Lite +22.0%YoY) and enhanced production by 4.8%YoY on BOE basis (majorly due to Jhandial’s addition), it is pertinent to note that the results incorporate older gas pric-es for TAL block fields considering that the decision in this regard is still pending. Recall, the company reversed enhanced revenues amounting to PkR3.01bn in 2QFY18 earlier being accounted for TAL block fields from Jul 1’15 till Dec 31’17 prior to the Windfall levy issue (as discussed upon in our daily “Pakistan E&Ps: The looming Risk” dated Feb 27’18). Despite the absence of dry wells, exploration expenses in the period are expected to grow by 118%YoY as the company conducted seismic surveys on Balkassar lease & DG Khan concession along with processing data from Joyamair/Khaur North leases as well. Moreover, while other in-come can show an increment of 85%YoY on account of exchange gains on US$ denominated financial assets, losses on account of US$ denominated decommissioning costs can limit the net positive impact. In-line with its policy, we do not expect the company to declare a divi-dend in this quarter.

APL: 3QFY18F Result Previews, (AKD Daily, Apr 13, 2018)

For APL, we expect NPAT for 3QFY18 to amount to PkR1.41bn, up 17%YoY but down a mut-ed 5%QoQ. Following on, a 3%QoQ hike in volumes and smooth upwards sailing of MS & HSD ex-refinery prices in Feb & March 18 could lead to inventory gains in the quarter (expected at ~PkR750mn). That said, exchange losses from PkR devaluations vs. the green-back are expected to deplete the bottom- line, resting at ~PkR226mn for the quarter. Look-ing ahead, growth from fuel farm venture with PSO at the Islamabad airport (expected to be inaugurated on Apr 20’18), expansion in storage facilities and iretail fuels are expected to supplement earnings in the medium term. We have a FCFE based TP of PkR725/sh, implying a BUY stance. Keeping in step with the OMCs bi-annual payout policy, no payout is expected to accompany results.

Autos: Attractive 1QCY18 sales keep the pot boiling, (AKD Daily, Apr 12, 2018)

Monthly PAMA data reads total industry sales at 23,406 units for Mar'18 (+10.2%YoY), ex-tending stamina throughout 1QCY18, closing the quarter nearing 71.5K units (+12.6%YoY). While Passenger Car sales clocked in at 18,988 (-0.2%MoM), a major shift is noticed in the OEMs contribution with HCAR/INDU taking the lead +18.7%/+13.6%MoM and PSMC losing grounds (-13.9%MoM) on the back of slowdown in Wagon-R sales (fulfillment of orders, introduction of minor face lift follows) and LCV segment sales flattening. Fulfillment of cor-porate order for PSMC led to weakening of 1000CC and below segment sales (-11.3%/-14.3%MoM) with 1300CC and above premium segment sales contributing +16.1%MoM. Even so, resilience in sales of Trucks/Buses/Tractors with +29.6%/+58.9%/+18.3%, highlight operational progress from GHNI/MTL/AGTL where sales for the OEMs crossed 1,053/11,025/8,827 units for 1QCY18. Cumulative 9MFY18 sales reach 200K units (+22.5%YoY) supported by growth from Passenger cars/LCVs and pickup segment (161,371/31,362 units for the period, 16.8%/+64.7%YoY), where a healthy 1QCY19 also bodes well for Pas-senger car OEMs. With expansion activity nearing completion (2QCY18 expected on-boarding); increasing capacity to 75K units, national polls drawing closer leading to fleet sales (specially in 4X4 segment) and stratification of Corolla adding value (expectations de-tailed in previous notes), INDU remains our top pick with a DCF based TP of 2,192/sh (raised in Mar'18) positing 18.4% upside from current price levels.

Pakistan Commodities_Mar’18 Review, (AKD Daily, Apr 11, 2018)

Supported by robust growth dynamics prevailing in the world's largest economies, funda-mental growth drivers seen in the Eurozone, US and China continued to cement momentum in global commodity markets (TRJ Core Commodity Index moving +0.73%MoM/+0.77%CYTD). Energy commodities persisted to climb (Brent/Arab Light +1.04/+0.51%MoM) sup-


Apr 11, 2018

Apr 13, 2018

Apr 10, 2018

Apr 09, 2018

45,850

45,900

45,950

46,000

46,050

46,100

46,150

46,200

46,250

46,300

46,350

46,400

9:1

4

9:4

3

10:1

1

10:4

0

11:0

8

11:3

7

12:0

5

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3

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1

13:2

9

13:5

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0

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3

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1

11:1

4

11:3

8

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2

12:2

6

12:4

9

13:1

3

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7

14:0

0

14:2

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14:4

8

15:1

2

46,300

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9

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0

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5

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3

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3

15:1

8

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4

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9

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4

11:0

9

11:3

4

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9

12:2

4

12:4

8

13:1

3

13:3

8

14:0

3

14:2

8

14:5

2

15:1

7


13 April 2018

StockSmart


This Week’s Daily Reports

3

ported by continued (and collectively adhered to) OPEC supply limits draining inventory overhangs. Contrary to liquid fuels, Richards Bay Coal was down 4.2%MoM (averaging US$92.2/mton for March'18 down -1.8%MoM) on soft demand from India. In the agricul-ture space, Cotton prices rallied from strong demand uptick (COTLOOK average up 4.4%MoM) with prices at a four year high mark, while Urea prices weakened slightly (monthly average fell 2.3%MoM). Food commodity prices hardened where the FAO food price index rose 1.1%MoM led by dairy price index hike of 3.3%MoM, whereas continued sugar supply glut kept a lid on global prices. Steel prices (CRC/HRC prices dip 2.23/2.56%MoM) offered a sign of possible roadblocks in the form of trade tensions. Despite expectations of robust global industrial activity (PMIs for US, Eurozone, China, India & Brazil stronger in March) fears of a trade-war, sparked by imposition of tariffs on Chinese steel and aluminum prod-ucts by the US, and reciprocation by the Chinese have riled commodity markets, where a continuation of the spat is seen to be detrimental to global trade dynamics.

OMCs: Lubes and Storage Update, (AKD Daily, Apr 10, 2018)

Two crucial data sets regarding the OMC sector are difficult to tabulate and verify, one is regarding lubricant sales and market shares, which are excluded from monthly OCAC vol-umes and other is mid-stream storage infrastructure. Updating our data sets through the annual OCAC Pakistan Oil Report 2016-17, we observe: 1) 47.9%YoY increase in lubricant sales volumes for FY17 steered by 73%YoY rise in passenger motor car lubricant sales, 2) SHEL maintaining leadership in the segment (44% market share), and 3) total storage infra-structure for POL products growing by ~131k tons, up ~4%YoY. In-line with expectations of an FO-lite future, these data sets show that the OMC space (listed players at the least) are ready to put power sectors consumers (and accompanying arrears) in the rear view. Re-iterating strong retail dynamics furthered by core drivers (motor vehicles on road/total in-dustry sales climbing +4.4/+17.9%YoY for FY17), we remain upbeat on the sector with APL offering the highest upside (~20% to DCF based TP of PkR725/sh) at current levels. .

Power: FO on the sidelines, (AKD Daily, Apr 09, 2018)

Subdued demand at the tail-end of winters restricted overall output in Feb'18 to 6.98TwH, reflecting additional generation of 9.4%YoY. FO vacuum (865MW vs. 2,496MW in Feb'17) was largely filled by the inclusion of coal and RLNG in the system where both fuels contrib-uted 15.8% and 19.2% towards the total generation. Despite having a pure RLNG based generation capacity of ~3,600MW which includes Bhikki, Balloki and Haveli Bahadur Shah, almost 91% of the total RLNG based generation of 1,995MW came from IPPs including KAP-CO (558MW), Rousch (291MW), Saif (~160MW) and others as the new plants continue to suffer from teething issues. During the month, HUBC's base plant operated at a meagre 8.6% load factor while the Narowal plant was able to operate at 55%, KAPCO, on the other hand delivered 625MW of energy with RLNG as the preferred source. At current levels, we continue to vouch for KAPCO with an attractive FY18/19E D/Y of 15.4%/15.0% while the stock trades at a discount of 5.9% from its fair value of PkR63.78/sh.


13 April 2018

StockSmart


4

Commodities

International Major Currencies

Source: Bloomberg

Source: Bloomberg

Major World Indices’ Performance

Source: Bloomberg

TRJ-CRB Index

Source: Bloomberg

PkR/US$ Trend

Source: Bloomberg

Regional Valuations (2018)

Source: Bloomberg & AKD Universe

165

168

171

174

177

180

183

186

189

192

195

198

201

204

Apr-

17

May-

17

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-17

Nov-

17

Dec-

17

Jan-1

8

Feb

-18

Mar-

18

Apr-

18

103.0

104.4

105.8

107.2

108.6

110.0

111.4

112.8

114.2

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117.0

Apr-

17

May-

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Jul-17

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SPOT Units 13-Apr-18 6-Apr-18 WoW CYTD

TRJ-CRB Points 199.8566 192.2514 3.96% 3.09%

Nymex (WTI) US$/bbl. 67.26 62.06 8.38% 11.32%

ICE Brent US$/bbl. 72.7 66.78 8.86% 8.80%

N. Gas Henry Hub US$/Mmbtu 2.7096 2.7294 -0.73% -23.45%

Cotton USd/Pound 93.05 92.05 1.09% 3.85%

Gold US$/Tr.Oz 1345.29 1333.65 0.87% 3.24%

Sliver US$/Tr.Oz 16.672 16.3875 1.74% -1.58%

Copper US$/MT 6787.25 6729.5 0.86% -5.82%

Platinum US$/Oz 930.13 917.5 1.38% -0.04%

Coal US$/MT 93.55 93.4 0.16% -1.73%

SPOT 13-Apr-18 6-Apr-18 Chg +/- WoW CYTD

Dollar Index 89.798 90.108 -0.310 -0.34% -2.52%

USD/PkR 115.610 115.610 0.000 0.00% 4.67%

USD/JPY 107.540 106.930 0.610 0.57% -4.57%

EUR/USD 1.233 1.228 0.005 0.37% 2.68%

GBP/USD 1.426 1.409 0.017 1.17% 5.51%

AUD/USD 0.778 0.768 0.010 1.30% -0.32%

NZD/USD 0.737 0.726 0.010 1.42% 3.78%

CHF/USD 0.962 0.959 0.003 0.31% -1.25%

CAD/USD 1.259 1.278 -0.020 -1.54% 0.11%

USD/KRW 1,070 1,070 -0.100 -0.01% -0.10%

CNY/USD 6.277 6.303 -0.026 -0.42% -3.53%

Country Bloomberg Code 13-Apr-18 6-Apr-18 WoW CYTD

Pakistan KSE100 Index 46,072 46,638 -1.21% 13.8%

Srilanka CSEALL Index 6,484 6,455 0.44% 1.8%

Thailand SET Index 1,767 1,740 1.57% 0.8%

Indonesia JCI Index 6,270 6,175 1.54% -1.3%

Malaysia FBMKLCI Index 1,868 1,837 1.71% 4.0%

Philippines PCOMP Index 7,900 7,946 -0.57% -7.7%

Vietnam VNINDEX Index 1,157 1,200 -3.57% 17.6%

Hong Kong HSI Index 30,808 29,845 3.23% 3.0%

Singapore FSSTI Index 3,501 3,443 1.71% 2.9%

Brazil IBX Index 34,694 34,945 -0.72% 9.7%

Russia RTSSTD Index 14,457 15,003 -3.64% 5.7%

India SENSEX Index 34,193 33,627 1.68% 0.4%

S&P SPX Index 2,658 2,604 2.06% -0.6%

DJIA INDU Index 24,436 23,933 2.10% -1.1%

UK UKX Index 7,259 7,184 1.05% -5.6%

Germany DAX Index 12,437 12,241 1.60% -3.7%

Qatar DSM Index 8,918 8,793 1.43% 4.6%

Abu Dhabi ADSMI Index 4,653 4,689 -0.76% 5.8%

Dubai DFMGI Index 3,094 3,083 0.36% -8.2%

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

Oman MSM30 Index 4,777 4,799 -0.47% -5.4%

Saudi Arabia SASEIDX Index 7,824 7,953 -1.62% 8.2%

MSCI EM MXEF Index 1,177 1,162 1.28% 1.6%

MSCI FM MXFM Index 657 662 -0.72% 3.0%

EPS Growth PE(x)

Pakistan 15% 8.88

Indonesia 10% 14.55

Malaysia 12% 14.39

Philippines 7% 15.45

Vitenam 13% 15.58

India 19% 15.16

China 14% 10.79

% ROE Divd Yld

Pakistan 15.9% 5.88

Indonesia 15.42 2.32

Malaysia 10.54 3.44

Philippines 12.20 1.74

Vitenam 21.36 1.40

India 15.56 1.73

China 12.18 2.65

5


13 April 2018

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

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

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

-30%

-20%

-10%

0%

10%

20%

30%

40%

Ap

r-17

May

-17

Jun

-17

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Au

g-17

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-17

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-17

No

v-17

Jan-

18

Feb

-18

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-18

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r-18

KSE100 MSCI EM

MSCI FM

3,214

1,780

1,346

6,349

4,762

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

9-Apr-18 10-Apr-18 11-Apr-18 12-Apr-18 13-Apr-18

(US$'000)

-1.70

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-0.90

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0.70

1.10

Ap

r-17

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-17

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-17

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No

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18

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-18

Mar

-18

Ap

r-18

(%)

Ind., 11.89

Co., (21.99)

Bank/DFI, (9.04)

NBFC, 0.09

M.Funds, 6.64

Ins, 0.65

Others, (6.42)

Prop. Trading , 0.72

(25.00)

(20.00)

(15.00)

(10.00)

(5.00)

-

5.00

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y-17

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y-17

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Sep-1

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Oct

-17

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Nov-1

7

Dec-1

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Jan-1

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Feb

-18

Feb

-18

Ma

r-1

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Apr-

18

-32%

-27%

-22%

-17%

-12%

-7%

-2%

3%

8%

Ap

r-1

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May

-17

Jun

-17

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g-1

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-17

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-17

No

v-1

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Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

KSE-All Share Index AKD Universe

6

AKD Securities Limited StockSmart


Market PER Chart 2018

Source: AKD Research

Market P/BVS Chart 2018

Source: AKD Research

13 April 2018

Jul-0

7

Apr

-08

Feb-

09

Dec

-09

Oct

-10

Aug

-11

Jun-

12

Apr

-13

Feb-

14

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Oct

-15

Aug

-16

Jun-

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Apr

-18

14.0

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7.0

3.5

(x)

Jul-0

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Apr

-08

Feb-

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-10

Aug

-11

Jun-

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-15

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-16

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Apr

-18

2.5

2.0

1.5

1.0

(x)

7



AKD Universe Active Coverage Cluster’s Valuations

13 April 2018

Source: AKD Research UR Under Review

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

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

Automobile and Parts

Indus Motors INDU 1,850.38 2,191.48 Accumulate 165.41 188.74 199.71 11.19 9.80 9.27 4.66 3.96 3.41 6.21 6.38 6.76

Pak Suzuki Motors PSMC 501.18 691.51 Buy 60.67 70.15 66.46 8.26 7.14 7.54 1.34 1.16 1.03 3.71 2.79 2.59

Cements

DG Khan Cement DGKC 159.63 198.00 Buy 18.20 21.33 21.17 8.77 7.49 7.54 0.93 0.84 0.78 4.70 5.32 5.32

Lucky Cement LUCK 684.77 898.00 Buy 42.34 34.15 37.79 16.17 20.05 18.12 2.78 2.65 2.39 1.75 1.46 1.75

Maple Leaf Cement Factory MLCF 76.01 107.00 Buy 8.05 7.09 7.58 9.45 10.72 10.03 1.90 1.44 1.19 4.39 8.02 8.02

Fauji Cement Company Ltd. FCCL 29.60 39.00 Buy 1.89 2.59 3.22 15.63 11.44 9.19 2.08 1.98 1.86 3.04 6.76 8.45

Pioneer Cement Limited PIOC 70.01 109.00 Buy 12.84 9.04 10.54 5.45 7.75 6.64 1.30 1.22 1.12 7.86 7.14 8.57

Cherat Cement Co Limited CHCC 128.93 140.00 Accumulate 11.08 10.71 12.79 11.64 12.03 10.08 2.18 2.00 1.77 2.08 3.10 3.88

Gharibwal Cement Ltd GWLC 27.52 58.00 Buy 5.71 4.07 4.49 4.82 6.76 6.14 0.97 0.92 0.89 10.90 11.81 9.99

Engineering

Amreli Steels Ltd. ASTL 90.05 138.00 Buy 3.62 4.82 13.23 24.90 18.67 6.80 2.40 2.12 1.68 2.22 2.22 6.11

Fertilizers

Engro Corporation ENGRO 313.68 348.84 Accumulate 20.47 21.56 27.91 15.33 14.55 11.24 1.99 1.96 1.88 6.69 6.38 7.01

Engro Fertilizers Limited EFERT 71.27 79.94 Accumulate 7.17 8.32 8.71 9.94 8.56 8.18 2.29 2.23 2.17 11.89 10.51 11.00

Fauji Fert. Bin Qasim Ltd. FFBL 44.51 48.10 Accumulate 2.03 2.60 2.79 21.88 17.11 15.95 3.09 2.86 2.67 1.91 4.68 5.02

Fauji Fertilizer Company FFC 99.90 96.86 Neutral 6.97 7.66 8.34 14.33 13.04 11.98 4.37 4.23 4.08 7.01 6.90 7.51

Fatima Fertilizer FATIMA 31.97 45.11 Buy 5.06 5.44 6.00 6.32 5.88 5.33 1.23 1.14 1.05 - 11.90 13.14

Food Producers

Engro Foods Limited EFOODS 103.36 84.20 Reduce 0.75 1.19 1.22 138.16 86.56 84.50 4.28 4.05 3.80 - - -

Oil & Gas

Oil & Gas Development Co. OGDC 175.73 192.00 Accumulate 14.83 18.23 18.25 11.85 9.64 9.63 1.46 1.33 1.22 3.41 3.70 3.70

Pak Oilfields POL 696.06 718.17 Neutral 40.46 52.00 58.47 17.20 13.38 11.90 5.23 4.97 4.58 5.75 6.32 7.11

Pakistan Petroleum PPL 214.98 227.00 Accumulate 18.10 23.40 26.15 11.88 9.19 8.22 1.96 1.74 1.55 4.19 4.42 4.88

Hascol Petroleum HASCOL 268.84 317.69 Accumulate 13.61 17.46 22.39 19.76 15.40 12.01 5.26 4.54 3.93 3.25 4.18 5.86

Attock Petroleum APL 606.53 724.84 Accumulate 63.89 73.88 80.18 9.49 8.21 7.56 3.09 2.95 2.81 7.01 10.72 11.54

Pakistan State Oil PSO 332.27 399.08 Buy 55.90 53.54 58.22 5.94 6.21 5.71 1.05 0.98 0.90 6.27 8.13 9.03

Power

Hub Power Co. HUBC 104.87 142.70 Buy 11.20 12.42 12.37 9.37 8.44 8.48 3.96 3.88 4.01 7.15 10.49 10.25

K-Electric Co. KEL 7.11 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 59.21 64.38 Accumulate 10.73 11.09 10.79 5.52 5.34 5.49 1.60 1.54 1.48 15.28 16.04 15.62

Fixed Line Telecommunication

Pakistan Telecommunication PTC 12.58 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Personal Goods

Nishat Mills NML 159.81 169.10 Accumulate 12.12 15.48 18.09 13.18 10.32 8.84 0.63 0.61 0.58 3.13 4.38 5.16

Nishat Chunian Ltd. NCL 52.58 69.26 Buy 6.75 9.55 10.66 7.79 5.51 4.93 1.05 0.93 0.83 5.23 7.13 8.08

Banks

Allied Bank Limited ABL 98.50 101.44 Neutral 11.95 13.01 14.62 8.24 7.57 6.74 1.05 0.99 0.93 7.11 8.12 9.14

Bank AlFalah BAFL 51.72 48.43 Reduce 5.33 5.44 5.98 9.70 9.50 8.66 1.26 1.10 0.98 2.88 1.92 2.88

Habib Bank Limited HBL 209.17 253.08 Buy 22.13 24.11 26.29 9.45 8.68 7.96 1.44 1.34 1.24 3.82 6.69 6.69

MCB Bank Limited MCB 214.94 249.14 Accumulate 18.53 20.18 23.66 11.60 10.65 9.08 1.63 1.52 1.45 7.44 7.44 7.91

National Bank of Pakistan NBP 52.26 65.27 Buy 8.60 9.08 10.46 6.07 5.75 4.99 0.56 0.54 0.51 - 10.52 16.26

United Bank Ltd UBL 204.51 243.64 Accumulate 21.39 19.25 24.65 9.56 10.62 8.30 1.43 1.37 1.29 6.36 6.85 6.85

8


13 April 2018

StockSmart


AKD Universe Coverage Cluster’s Performance


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

13 - Apr- 18 1M 3 M 6 M 12 M CYTD High Low

KSE- 10 0 Inde x 4 6 ,0 7 1.8 6 5 .6 7 .3 15 .6 - 3 .9 13 .8 5 2 ,8 7 6 .5 3 7 ,9 19 .4

Automobile a nd Pa rts

Indus Motors INDU 1850.38 4.9 5.3 8.9 9.6 10.1 2044.30 1603.38

Pak Suzuki Motors PSMC 501.18 0.4 0.1 10.7 - 24.6 0.7 903.91 436.74

Ce me nts

DG Khan Cement DGKC 159.63 4.1 16.3 16.7 - 30.8 19.4 244.74 112.74

Lucky Cement LUCK 684.77 5.5 18.2 41.4 - 20.4 32.3 994.65 445.80

Maple Leaf Cement Factory MLCF 76.01 5.9 - 4.1 14.6 - 39.0 11.1 128.82 63.05

Fauji Cement Company Ltd. FCCL 29.60 4.8 9.9 3.6 - 29.5 18.4 47.30 21.00

Pioneer Cement Limited PIOC 70.01 - 2.0 5.4 - 1.6 - 51.7 10.9 160.02 48.92

Cherat Cement Limited CHCC 128.93 - 2.5 12.7 27.6 - 32.1 16.2 212.00 88.50

Gharibwal Cement Limited GWLC 27.52 6.6 10.3 - 1.1 - 53.2 14.1 62.55 19.79

Engine e ring

Amreli Steel Ltd ASTL 90.05 - 6.9 - 2.7 12.9 - 5.5 - 2.8 137.97 79.11

Fe rtilize rs

Dawood Hercules DAWH 132.50 9.2 12.3 22.4 3.5 18.4 148.50 105.45

Engro Fertilizers Ltd. EFERT 71.27 1.1 3.3 18.8 32.2 5.2 72.04 51.90

Engro Chemical ENGRO 313.68 4.1 9.2 11.7 - 9.9 14.2 399.16 253.43

Fatima Fertilizer FATIMA 31.97 3.9 4.5 6.2 - 15.7 3.5 37.92 26.83

Fauji Fert. Bin Qasim Ltd. FFBL 44.51 23.7 14.0 30.9 - 15.2 25.2 52.97 32.17

Fauji Fertilizer Company FFC 99.90 15.5 10.4 25.8 0.3 26.3 102.31 70.07

Food Produc e rs

Engro Foods Limited EFOODS 103.36 16.6 33.5 30.9 - 35.4 28.7 162.81 70.19

Oil & Ga s

Oil & Gas Development Co. OGDC 175.73 6.6 5.1 21.2 14.6 7.9 188.71 133.69

Pak Oilfields POL 696.06 14.1 13.8 22.0 52.0 17.1 707.34 429.75

Pakistan Petroleum Ltd. PPL 214.98 6.7 2.0 27.9 32.3 4.4 216.59 143.73

Pakistan State Oil PSO 332.27 11.1 9.7 - 0.9 - 21.0 13.4 475.29 265.17

Attock Petroleum Ltd. APL 606.53 6.4 5.5 3.7 - 3.6 16.0 703.86 490.02

Hascol Petroleum HASCOL 268.84 2.1 1.5 1.7 - 17.6 8.8 389.41 211.63

Powe r

Hub Power Co. HUBC 104.87 6.2 14.6 - 1.1 - 18.0 15.2 136.57 89.90

K- Electric Limited KEL 7.11 13.8 9.0 15.4 - 12.0 12.7 8.24 5.34

Kot Addu Power Company KAPCO 59.21 - 2.9 5.5 - 14.8 - 21.7 9.9 78.03 49.39

Fixe d Line Te le c ommunic a tion

Pakistan Telecommunication PTC 12.58 2.9 - 5.8 - 7.2 - 20.7 - 3.6 16.76 11.80

Pe rsona l Goods

Nisaht (Chunian) Ltd. NCL 52.58 8.5 3.9 - 11.1 - 5.9 14.9 62.35 44.03

Nishat Mills NML 159.81 0.3 - 1.0 14.7 1.1 6.9 177.74 130.03

Ba nks

Allied Bank Limited ABL 98.50 8.2 9.4 14.6 6.8 15.9 103.44 76.72

Bank AlFalah BAFL 51.72 4.2 12.0 25.4 39.8 21.7 54.73 36.03

Habib Bank Limited HBL 209.17 1.8 7.4 24.6 - 22.5 25.2 308.57 152.41

MCB Bank Limited MCB 214.94 2.4 - 4.1 4.7 - 2.0 1.2 262.10 190.43

National Bank of Pakistan NBP 52.26 8.4 10.6 8.1 - 15.7 7.6 68.96 43.01

United Bank Ltd UBL 204.51 5.7 - 3.3 7.8 - 13.1 8.8 275.38 163.40

Absolute Pe rforma nc e (%)

9


13 April 2018

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

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

T-bill

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

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

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

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

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

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

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

Inflation

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

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

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

External Indicators

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

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

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

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

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

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

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

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

Banking Sector

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

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

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

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

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

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

Public Finance

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

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

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

Currency

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

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

10



DISCLOSURES & DISCLAIMERS

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

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

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

AKD Research Team

Analyst Tel no. E-mail Coverage

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

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

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

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

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

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

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

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

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

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

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

13 April 2018

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