stocksmart pakistan weekly update - akd...

AKD Research [email protected]

+92-21-111-253-111

Weekly Review

Politics once again took the center stage deteriorating market sentiment as the ousted PM

Nawaz Sharif returned from London to appear before Accountability Court. Also, NAB

indicted the Finance Minister Ishaq Dar in assets reference case further fueling negative

sentiments. In this backdrop, KSE-100 index lost 341pts (-0.8%WoW) to end the week at

42409pts. Avg. daily trading activity during the week also came down 9.03%WoW to

146.3mn shares, where volume leaders were: 1) KEL (97.05mn shares), 2) BOP (45.57mn

shares), 3) WTL (32.39mn shares), 4) TRG (31.10mn Shares) and 5) KOSM (27.5mn shares).

Key news flows impacting the market during the week included: 1) ECC approving the

PkR5bn sugar export subsidy on 500K tons export quota allotted earlier, 2) ADB maintaining

its growth forecast for Pakistan’s economy at 5.5%YoY while highlighting external sector and

rising debt risks, 3) Supreme Court dismissing the NBP’s appeal against Lahore High Court’s

(LHC) judgment on employees’ pension case, 4) ADB approving the US$800mn multi-

tranche financing facility for Pakistan to rehabilitate and upgrade the road networks and 5)

GoP total external assistance during 2MFY18 amounting to US$709mn. Performance wise,

top gainers during the week included: 1) FATIMA (+13.88%WoW), 2) KEL (+12.28%WoW), 3)

POL (+6.55%WoW), 4) FFC (+5.91%WoW) and 5) PTC (+4.17%WoW), while major losers

were: 1) NBP (-15.32%WoW), 2) GWLC (-7.62%WoW), 3) FCCL (-5.19%WoW), 4) MLCF (-

4.69%WoW) and 5) LUCK (-4.59%WoW). Foreign interest remained intact during the week

with net inflows of US$0.52mn against net inflow of US$0.377mn in the last week.

StockSmart

AKD Equity Research / Pakistan

Pakistan Weekly Update

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

Important disclosures

Copyright©2017 AKD Securities Limited. All rights reserved. The information provided on this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject AKD Securities or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this document constitutes a solicitation or offer by AKD Securities or its affiliates to buy or sell any securities or provide any investment advice or service. AKD Securities does not warrant the accuracy of the information provided herein.

www.akdsecurities.net

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Pakistan Stock Exchange

REP-108

Find AKD research on Bloomberg

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

Key developments over NAB’s references against former PM Nawaz Sharif and his children in the Accountability Court may continue to hold sentiment in the bearish territory. However, strong rebound in oil (Arab Light/Brent +12.4%/9% MTD) and int’l urea prices (up 60% since low of US$163/ton in Jun'17) can keep the respective sectors in limelight.

29 September 2017

Outlook

Index & Volume Chart

Source: KSE & AKD Research

Universe Gainers & Losers

42,744

42,666

42,290 42,363

42,409

42,000

42,100

42,200

42,300

42,400

42,500

42,600

42,700

42,800

-

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

25-Sep 26-Sep 27-Sep 28-Sep 29-Sep

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Indices KSE-100 KSE-30

This w eek 42,409 21,606

Last w eek 42,750 21,881

Change -0.80% -1.26%

Indices KMI-30 Allshare

This w eek 71,443 30,396

Last w eek 72,121 30,462

Change -0.94% -0.22%

Mkt Cap. PkRbn US$bn

This w eek 8,857 84.03

Last w eek 8,884 84.28

Change -0.30% -0.29%

Avg. Daily Turnover ('mn shares)

This w eek 146.37

Last w eek 160.90

Change -9.03%

Top-5 Volume Leaders

Symbol Volume (mn)

KEL : 97.05

BOP : 45.57

WTL : 32.39

TRG : 31.10

KOSM : 27.50

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

FATI

MA

KEL

PO

L

FFC

PTC

LUC

K

MLC

F

FCCL

GW

LC

NB

P

33,000

35,000

37,000

39,000

41,000

43,000

45,000

47,000

49,000

51,000

53,000

-50

50

150

250

350

450

550

650

750

850

950

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun-

17

Jul-1

7

Au

g-17

Au

g-17

Sep

-17

(Index)(share mn)

Volume (LHS) KSE-100 Index

AKD Securities Limited

29 September 2017

StockSmart


This Week’s Daily Reports

2

Sep 28, 2017

Pakistan E&Ps: Triggers in the making, (AKD Daily, Sep 29, 2017)

Arab Lite has recently hit US$55/bbl mark bringing the index heavy Oil and Gas exploration sector back into limelight (outperformed KSE-100 index by 3.8%CYTD). Fueled by geo-political tensions and hopes of a market rebalance, intl. oil prices are firming up and the domestic E&P sector remains a major beneficiary where companies in our universe derive ~43% of the FY18E revenue through oil. Moreover, taking advantage of low cost Oil Field Services around the globe post FY14, the companies embarked on multiple exploration programs including geological surveys, seismic data acquisition (total 2D/3D seismic data acquisition reached its peak in FY16 with 7632kms/6585 sq. kms) and drilling of wells in lesser explored areas of Balochistan and KPK. A sneak peek at the ongoing E&P activities reveals that post- security clearance, seismic activities are underway in blocks of Balochistan and KPK by OGDC and PPL. Workovers in Adhi, Sui, Kandhkot and various other fields, appraisal and tie-in of newer discoveries in TAL block (Tolanj West, Makori Deep etc), and plans to spud 100 wells in FY18 shall act as major volumetric triggers in times to come. In this backdrop, PPL remains our top-pick with a TP of PkR205/sh, providing a potential upside of 17.2% from last close.

Power: The boat has sailed on low generation costs, (AKD Daily, Sep 28, 2017)

CPPA generation numbers for 2MFY18 clocked-in at 47.8TwH, 11.8% higher over 2MFY17. Hydel and FO based generation maintained the highest share of the power mix with 8.0/6.3TwH contributed. Increased generation was largely led by RLNG/coal based production adding 1,070/509MW in net dependable capacity, as new plants were tied-in to the grid in the recent months. Unit cost of electricity moved up by 12.3%YoY to PkR4.98/KwH, in tandem with global oil price movements (reflected in FO/RLNG cost of generation climbing). Having said this, we highlight the worsening circular debt position which has crossed PkR400bn mark as per the latest news flows with NEPRA rejecting to incorporate PkR235bn in to the consumer tariff. KAPCO looks attractive based on a high probability of an extension in PPA for 15 years and its recent plan to acquire 17.4% stake in HUBC while maintaining hefty payouts (FY18E/19F D/Y of 12. 7%/12.7%).

Pakistan Fertilizers: much needed boost, (AKD Daily, Sep 27, 2017)

As per Aug'17 NFDC data, fertilizer offtake continues to recover on the back of persistent support of subsidy package and inspiring kharif season. According to latest figures, total fertilizer sales in Aug'17 stood at 1.15mn tons against 842k tons sold in Aug'16 (up 37%YoY/55%MoM). Similarly, urea sales have also jumped by 65%YoY/180%MoM to 948k tons during the month under review. Furthermore, imported urea sales also depicted improvement (65k tons sold in Aug'17 vs. 46k tons in Jul'17) due to availability at significant discount to local urea prices (15% discount). DAP sales on the other hand registered a decline of 38%YoY/71%YoY to 83k tons in Aug'17. On a cumulative basis, total fertilizer sales posted encouraging growth of 26%YoY to 6.04mn tons during 8MCY17 where urea offtake posted a significant growth of 26%YoY to stand at 3.99mn tons. Moreover, the recent recovery in int'l urea prices (up 60% since low of US$163/ton in Jun'17) alongwith normalization of inventory level (urea inventory standing at 653k tons vs. 1.15mn tons in Aug’16) makes room available for local manufacturers to reduce the prevailing discount offerings while further reducing inventory levels by exporting excess urea at better prices.

Autos: Weak JpY to fatten margins, (AKD Daily, Sep 26, 2017)

Having weakened 1.94% during the month of September'17 and averaging 110.9JpY/US$ for 3QCY17, a weak Yen continues to suppress costs for automotive OEMs. Despite this, possible shelving of Punjab Orange cab scheme and lackluster earnings due to tepid margins on new offerings have cemented Auto industry weakness, with PSMC/INDU losing -42/-2%FYTD. Even though current JpY averages match levels we have assumed in our forecasts (110.94JpY/US$ average for FY18E), we highlight heightened geopolitical tensions in the Korean peninsula and possible elections in Japan as furthering weakness in the Yen. News reports reveal relatively subdued picture on new entrants, with current OEMs expected to lay out plans for fending off market share accordingly. Barring any substantial initiatives Source: KSE & AKD Research

Sep 27, 2017

42,000

42,100

42,200

42,300

42,400

42,500

42,600

42,700

9:3

0

9:5

5

10:2

0

10:4

4

11:0

9

11:3

4

11:5

9

12:2

4

12:4

9

13:1

3

13:3

8

14:0

3

14:2

8

14:5

3

15:1

8

Sep 29, 2017

42,050

42,100

42,150

42,200

42,250

42,300

42,350

42,400

42,450

42,500

9:3

0

9:5

4

10:1

7

10:4

1

11:0

5

11:2

8

11:5

2

12:1

5

12:3

9

13:0

3

13:2

6

13:5

0

14:1

3

14:3

7

15:0

1

15:2

5

Sep 26, 2017

42,600

42,655

42,710

42,765

42,820

42,875

42,930

42,985

9:3

0

10:0

2

10:3

5

11:0

7

11:3

9

12:1

1

12:4

3

13:1

5

13:4

7

14:1

9

14:5

1

15:2

4

42,270

42,314

42,358

42,402

42,446

42,490

42,534

42,578

9:1

5

9:4

4

10:1

2

10:4

0

11:0

9

11:3

7

12:0

6

12:3

4

13:0

2

13:3

0

13:5

8

14:2

6

14:5

4

15:2

3

15:5

1

16:2

0

Sep 25, 2017

42,600

42,677

42,754

42,831

42,908

42,985

43,062

43,139

9:3

0

10:0

2

10:3

5

11:0

7

11:3

9

12:1

1

12:4

3

13:1

5

13:4

7

14:1

9

14:5

1

15:2

4


29 September 2017

StockSmart


This Week’s Daily Reports

3

mitigating increased competition, and emphasizing relative value in the space we maintain our BUY calls on INDU and PSMC.

EFOODS: Fundamental issues remain deeply rooted, (AKD Daily, Sep 25, 2017)

EFOODS has lost 52%CYTD struggling on account of continuous slowdown in earnings - 1HCY17 profits have been the lowest ever. Topline growth remains the biggest concern (down 22.5%YoY) in the backdrop of intensifying competition, with EFOODS losing out presence in all major dairy categories. Moreover, declining GM has added on to the pressure, straining profitability further. With international milk prices on an uptrend (FAO dairy index +44.3%YoY in 8MCY17) and effective marketing strategy deployment by new entrants (particularly in the tea whitener segment where EFOODS commands a leadership position), we see a challenging operating environment for EFOODS. Citing the aforementioned factors, we revise down our CY17F/CY18F earnings estimates by 55%/53% while consequently bringing down our TP to PkR84.20/sh. Going forward, fundamental weakness is likely to persist with pressure on volumes remaining intact. Product initiations under the new management remains the only bright spot, however nothing in this regard has been put forward yet. At current price level, the stock trades at unjustifiably high multiples (forward PE/PS at 80.3x/1.74x) vindicating our Reduce stance.

*3-Days


29 September 2017

StockSmart


4

Commodities

International Major Currencies

Source: Bloomberg

Source: Bloomberg

Major World Indices’ Performance

Source: Bloomberg

TRJ-CRB Index

Source: Bloomberg

PkR/US$ Trend

Source: Bloomberg

Regional Valuations (2017)

Source: Bloomberg & AKD Universe

165

168

171

174

177

180

183

186

189

192

195

198

Sep-1

6

Oct-16

Nov-

16

Dec-

16

Jan-1

7

Feb

-17

Mar-

17

Apr-

17

May-

17

Jun-1

7

Jul-17

Aug-1

7

104.0

104.5

105.0

105.5

106.0

106.5

107.0

Sep-1

6

Oct-16

Nov-

16

Dec-

16

Jan-1

7

Feb

-17

Mar-

17

Apr-

17

May-

17

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

SPOT Units 29-Sep-17 22-Sep-17 WoW CYTD

TRJ-CRB Points 182.9904 183.5685 -0.31% -4.95%

Nymex (WTI) US$/bbl. 51.44 50.66 1.54% -4.24%

ICE Brent US$/bbl. 57 56.64 0.64% 2.87%

N. Gas Henry Hub US$/Mmbtu 2.9222 2.9448 -0.77% -20.64%

Cotton USd/Pound 78.8 78.55 0.32% -0.76%

Gold US$/Tr.Oz 1286.61 1297.4 -0.83% 11.66%

Sliver US$/Tr.Oz 16.8085 16.995 -1.10% 5.59%

Copper US$/MT 6473.5 6415.75 0.90% 17.21%

Platinum US$/Oz 919 933 -1.50% 1.72%

Coal US$/MT 90.6 89.5 1.23% 8.18%

SPOT 29-Sep-17 22-Sep-17 Chg +/- WoW CYTD

Dollar Index 93.076 92.171 0.905 0.98% -9.35%

USD/PkR 105.415 105.420 -0.005 0.00% 0.56%

USD/JPY 112.510 111.990 0.520 0.46% -3.46%

EUR/USD 1.181 1.195 -0.014 -1.20% 12.55%

GBP/USD 1.339 1.350 -0.012 -0.87% 9.18%

AUD/USD 0.783 0.796 -0.013 -1.63% 8.49%

NZD/USD 0.722 0.733 -0.011 -1.51% 3.65%

CHF/USD 0.971 0.969 0.001 0.12% -5.13%

CAD/USD 1.244 1.234 0.010 0.81% -7.87%

USD/KRW 1,145 1,137 8.700 0.77% -5.17%

CNY/USD 6.652 6.590 0.062 0.94% -4.38%

Country Bloomberg Code 29-Sep-17 22-Sep-17 WoW CYTD

Pakistan KSE100 Index 42,409 42,750 -0.80% -11.3%

Srilanka CSEALL Index 6,438 6,427 0.17% 3.4%

Thailand SET Index 1,673 1,659 0.85% 8.4%

Indonesia JCI Index 5,901 5,912 -0.18% 11.4%

Malaysia FBMKLCI Index 1,756 1,771 -0.87% 6.9%

Philippines PCOMP Index 8,171 8,281 -1.33% 19.5%

Vietnam VNINDEX Index 804 807 -0.34% 21.0%

Hong Kong HSI Index 27,554 27,881 -1.17% 25.2%

Singapore FSSTI Index 3,220 3,220 -0.01% 11.8%

Brazil IBX Index 30,487 31,296 -2.58% 23.0%

Russia RTSSTD Index 13,382 13,223 1.21% -9.2%

India SENSEX Index 31,284 31,922 -2.00% 17.5%

S&P SPX Index 2,510 2,502 0.31% 12.1%

DJIA INDU Index 22,381 22,350 0.14% 13.3%

UK UKX Index 7,369 7,311 0.80% 3.2%

Germany DAX Index 12,751 12,592 1.26% 11.1%

Qatar DSM Index 8,312 8,361 -0.58% -20.4%

Abu Dhabi ADSMI Index 4,397 4,455 -1.29% -3.3%

Dubai DFMGI Index 3,564 3,633 -1.89% 0.9%

Kuwait KWSEIDX Index 6,680 6,849 -2.47% 16.2%

Oman MSM30 Index 5,137 5,100 0.72% -11.2%

Saudi Arabia SASEIDX Index 7,283 7,326 -0.59% 1.0%

MSCI EM MXEF Index 1,072 1,102 -2.71% 24.4%

MSCI FM MXFM Index 602 607 -0.84% 20.6%

EPS Growth PE(x)

Pakistan 18% 8.05

Indonesia 10% 15.18

Malaysia 13% 15.51

Philippines 6% 15.45

Vitenam 12% 17.79

India 25% 16.10

China 13% 13.02

% ROE Divd Yld

Pakistan 16.3% 6.33

Indonesia 14.89 2.37

Malaysia 9.98 3.39

Philippines 12.18 1.57

Vitenam 15.58 2.54

India 15.78 1.66

China 11.24 2.22

5


29 September 2017

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

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

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

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Sep

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Ap

r-17

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-17

KSE100 MSCI EM

MSCI FM

4,679

(6,658)

4,570

(1,507)

(560)

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

25-Sep-17 26-Sep-17 27-Sep-17 28-Sep-17 29-Sep-17

(US$'000)

-2.00

-1.50

-1.00

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0.00

0.50

1.00

Sep

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Oct

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Ap

r-17

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Jun

-17

Jul-

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Au

g-17

Au

g-17

Sep

-17

(%)

Ind., (2.04)

Co., 2.22

Bank/DFI, (10.32)

NBFC, (0.07)

M.Funds, 6.23

Ins, (0.24)Others, (1.69)

Prop. Trading , 5.38

(12.00)

(10.00)

(8.00)

(6.00)

(4.00)

(2.00)

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Ma

r-1

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Ma

y-17

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Jul-1

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-9%

-4%

1%

6%

11%

16%

21%

26%

31%

36%

Oct

-16

No

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De

c-1

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Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

KSE-All Share Index AKD Universe

6

AKD Securities Limited StockSmart


Market PER Chart 2017

Source: AKD Research

Market P/BVS Chart 2017

Source: AKD Research

29 September 2017

Jul-0

7

Jun-

08

May

-09

Apr

-10

Mar

-11

Feb-

12

Jan-

13

Dec

-13

Nov

-14

Oct

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14.0

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7.0

3.5

(x)

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7

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May

-09

Apr-

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Mar

-11

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Jan-

13

Dec-

13

Nov

-14

Oct

-15

Oct

-16

Sep-

17

2.5

2.0

1.5

1.0

(x)

7



AKD Universe Active Coverage Cluster’s Valuations

29 September 2017

Source: AKD Research UR Urder Review

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

(PkR) (PkR) 16 17F 18F 16 17F 18F 16 17F 18F 16 17F 18F

Automobile and Parts

Indus Motors INDU 1,720.82 2,289.38 Buy 145.74 165.41 163.11 11.81 10.40 10.55 4.90 4.34 3.82 5.81 6.68 6.39

Pak Suzuki Motors PSMC 457.67 800.66 Buy 33.69 44.98 57.33 13.58 10.17 7.98 1.44 1.28 1.13 1.20 1.97 2.40

Cements

DG Khan Cement DGKC 146.86 263.00 Buy 20.06 19.73 22.71 7.32 7.44 6.47 0.98 0.85 0.77 4.09 4.09 4.77

Lucky Cement LUCK 565.18 1,150.00 Buy 40.03 42.34 44.96 14.12 13.35 12.57 2.64 2.29 2.00 1.77 2.12 2.30

Maple Leaf Cement Factory MLCF 83.97 166.00 Buy 9.26 10.01 11.51 9.07 8.39 7.30 2.08 1.73 1.46 4.76 4.76 5.95

Fauji Cement Company Ltd. FCCL 32.52 43.00 Buy 3.89 1.89 3.54 8.36 17.18 9.18 2.43 2.28 2.15 8.46 2.77 9.23

Pioneer Cement Limited PIOC 89.94 170.00 Buy 11.09 13.65 13.62 8.11 6.59 6.60 1.91 1.64 1.48 6.95 7.12 8.62

Cherat Cement Co Limited CHCC 119.98 198.00 Buy 7.96 12.24 15.45 15.08 9.80 7.77 2.32 1.89 1.63 1.61 2.23 5.00

Gharibwal Cement Ltd GWLC 33.21 100.00 Buy 6.70 5.71 7.39 4.93 5.84 4.49 1.35 1.20 1.06 7.53 9.79 12.80

Engineering

Amreli Steels Ltd. ASTL 101.97 106.00 Neutral 4.31 3.72 7.11 23.68 27.41 14.34 2.83 2.62 2.34 1.96 1.96 3.43

Fertilizers

Engro Corporation ENGRO 303.09 374.00 Buy 131.94 19.21 21.32 13.54 9.90 8.52 1.85 1.75 1.59 4.43 5.56 6.45

Engro Fertilizers Limited EFERT 62.91 72.82 Accumulate 6.76 7.19 7.23 9.31 8.75 8.70 1.98 2.03 1.92 11.09 8.57 9.19

Fauji Fert. Bin Qasim Ltd. FFBL 35.85 62.60 Buy 1.43 2.27 1.70 25.02 15.81 21.08 2.63 2.48 2.40 1.39 5.53 4.15

Fauji Fertilizer Company FFC 83.14 96.86 Accumulate 9.26 6.97 7.66 8.98 11.93 10.86 3.75 3.64 3.52 9.50 7.54 8.29

Fatima Fertilizer FATIMA 34.05 45.11 Buy 4.66 5.06 5.44 7.31 6.73 6.26 1.44 1.31 1.21 8.21 9.66 11.18

Food Producers

Engro Foods Limited EFOODS 95.03 84.20 Reduce 3.11 0.75 1.19 30.52 127.00 79.58 4.25 3.94 3.72 - - -

Oil & Gas

Oil & Gas Development Co. OGDC 148.64 190.00 Buy 13.94 14.83 18.46 10.66 10.02 8.05 1.34 1.23 1.11 3.50 4.04 3.70

Pak Oilfields POL 532.04 437.00 Reduce 30.58 40.92 61.32 17.40 13.00 8.68 4.17 4.00 3.64 6.58 7.52 9.77

Pakistan Petroleum PPL 174.69 205.00 Accumulate 8.47 18.10 19.82 20.62 9.65 8.82 1.79 1.64 1.47 3.29 5.15 4.58

Hascol Petroleum HASCOL 281.09 422.53 Buy 9.97 16.44 21.55 28.19 17.10 13.04 5.52 4.96 4.38 2.49 3.82 4.98

Attock Petroleum APL 625.73 745.14 Accumulate 46.16 65.27 75.54 13.56 9.59 8.28 3.53 3.37 3.20 6.39 9.08 10.51

Pakistan State Oil PSO 441.76 539.31 Buy 37.81 63.38 64.82 11.68 6.97 6.82 1.32 1.17 1.06 2.83 5.66 6.11

Power

Hub Power Co. HUBC 111.81 142.70 Buy 10.00 8.29 12.42 9.89 9.99 9.00 4.69 4.22 4.14 9.84 6.71 9.84

K-Electric Co. KEL 7.04 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 76.04 85.00 Accumulate 10.31 10.84 11.40 7.38 7.01 6.67 2.16 2.08 1.99 11.84 11.90 12.82

Fixed Line Telecommunication

Pakistan Telecommunication PTC 14.73 19.00 Buy (0.58) 1.67 1.92 8.76 7.29 7.32 0.82 0.83 0.85 15.27 15.27 16.97

Personal Goods

Nishat Mills NML 145.10 185.29 Buy 14.00 17.11 18.73 10.36 8.48 7.75 0.62 0.59 0.56 3.45 4.65 5.86

Banks

Allied Bank Limited ABL 87.49 106.61 Buy 12.84 13.16 13.92 6.82 6.65 6.28 0.98 0.91 0.85 8.00 8.57 9.14

Bank AlFalah BAFL 42.42 48.43 Accumulate 4.97 5.40 5.51 8.53 7.86 7.70 1.11 1.02 0.89 - - 2.36

Habib Bank Limited HBL 180.76 253.08 Buy 23.23 22.13 24.11 7.78 8.17 7.50 1.35 1.25 1.16 7.75 7.75 7.75

MCB Bank Limited MCB 209.00 232.52 Accumulate 19.82 19.91 23.56 10.54 10.50 8.87 1.59 1.55 1.47 7.66 7.66 8.61

National Bank of Pakistan NBP 49.14 73.67 Buy 8.35 8.59 10.12 5.89 5.72 4.85 0.56 0.55 0.53 14.25 14.25 15.26

United Bank Ltd UBL 190.17 250.87 Buy 22.70 22.31 24.32 8.38 8.52 7.82 1.42 1.33 1.25 6.84 6.84 6.84

8


29 September 2017

StockSmart


AKD Universe Coverage Cluster’s Performance

Source: KSE & AKD Research

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

2 9 - Se p- 17 1M 3 M 6 M 12 M CYTD High Low

KSE- 10 0 Inde x 4 2 ,4 0 9 .2 7 2 .9 - 9 .2 - 12 .3 5 .2 - 11.3 52,876.5 39,872.9

Automobile a nd Pa rts

Indus Motors INDU 1720.82 0.5 - 5.9 8.2 18.7 6.6 2044.30 1449.98

Pak Suzuki Motors PSMC 457.67 - 2.3 - 42.1 - 28.2 - 18.7 - 25.3 903.91 436.74

Ce me nts

DG Khan Cement DGKC 146.86 - 1.6 - 30.7 - 36.9 - 21.8 - 33.8 245.37 146.86

Lucky Cement LUCK 565.18 - 6.2 - 33.1 - 33.9 - 17.7 - 34.8 994.65 565.18

Maple Leaf Cement Factory MLCF 83.97 - 4.4 - 25.7 - 33.4 - 13.6 - 34.2 137.64 83.97

Fauji Cement Company Ltd. FCCL 32.52 - 4.1 - 22.1 - 24.1 - 8.2 - 27.9 48.19 32.16

Pioneer Cement Limited PIOC 89.94 - 6.1 - 32.6 - 38.0 - 15.1 - 36.7 160.02 87.78

Cherat Cement Limited CHCC 119.98 - 10.2 - 32.3 - 36.9 - 6.8 - 31.1 212.00 119.98

Gharibwal Cement Limited GWLC 33.21 - 8.3 - 27.5 - 44.9 - 38.5 - 33.5 67.48 33.21

Engine e ring

Amreli Steel Ltd ASTL 101.97 9.1 - 16.4 n.a. n.a. 53.1 137.97 57.77

Fe rtilize rs

Dawood Hercules DAWH 123.36 8.3 - 12.1 - 6.6 - 6.2 - 14.5 161.23 109.27

Engro Fertilizers Ltd. EFERT 62.91 10.5 12.0 - 1.9 16.7 - 7.5 73.28 51.90

Engro Chemical ENGRO 303.09 5.5 - 9.2 - 18.7 5.3 - 4.1 399.16 279.14

Fatima Fertilizer FATIMA 34.05 19.4 2.4 - 11.8 0.1 - 7.7 41.29 27.26

Fauji Fert. Bin Qasim Ltd. FFBL 35.85 8.4 - 13.1 - 31.8 - 30.6 - 30.0 58.41 32.17

Fauji Fertilizer Company FFC 83.14 18.3 - 1.7 - 20.5 - 20.4 - 20.3 118.96 70.07

Food Produc e rs

Engro Foods Limited EFOODS 95.03 14.4 - 23.9 - 43.7 - 31.8 - 50.5 207.82 83.07

Oil & Ga s

Oil & Gas Development Co. OGDC 148.64 3.1 2.4 1.5 5.0 - 10.1 188.71 133.69

Pak Oilfields POL 532.04 11.0 18.0 19.5 33.8 - 0.5 559.58 396.51

Pakistan Petroleum Ltd. PPL 174.69 3.8 16.5 14.0 7.0 - 7.2 193.32 143.73

Pakistan State Oil PSO 441.76 4.8 13.2 3.2 6.9 1.7 486.05 368.35

Attock Petroleum Ltd. APL 625.73 - 1.0 - 0.7 - 1.6 19.6 - 8.6 749.39 520.00

Hascol Petroleum HASCOL 281.09 - 8.9 - 13.5 - 10.5 27.7 - 16.7 389.41 220.12

Powe r

Hub Power Co. HUBC 111.81 - 1.1 - 8.1 - 16.2 - 6.8 - 9.5 145.43 103.15

K- Electric Limited KEL 7.04 15.6 2.8 - 15.4 - 21.8 - 24.9 10.67 6.08

Kot Addu Power Company KAPCO 76.04 6.1 5.7 - 5.5 - 9.7 - 3.5 85.02 69.48

Fixe d Line Te le c ommunic a tion

Pakistan Telecommunication PTC 14.73 7.2 - 5.9 - 10.7 - 18.9 - 14.3 19.45 13.63

Pe rsona l Goods

Nisaht (Chunian) Ltd. NCL 54.52 3.9 10.7 - 11.9 21.9 - 12.7 72.67 44.55

Nishat Mills NML 145.10 1.8 - 9.1 - 12.8 7.3 - 4.7 185.63 135.20

Ba nks

Allied Bank Limited ABL 87.49 1.9 - 1.5 - 8.1 - 10.6 - 26.6 122.00 84.34

Bank AlFalah BAFL 42.42 10.6 5.1 15.9 47.7 11.7 47.24 28.59

Habib Bank Limited HBL 180.76 - 8.2 - 32.0 - 35.1 - 17.7 - 33.8 308.57 152.94

MCB Bank Limited MCB 209.00 9.4 - 2.1 - 7.1 - 3.6 - 12.1 262.10 190.43

National Bank of Pakistan NBP 49.14 - 13.8 - 15.7 - 34.6 - 32.8 - 34.4 82.66 48.73

United Bank Ltd UBL 190.17 0.8 - 19.3 - 16.4 - 4.7 - 20.4 275.38 184.31

Absolute Pe rforma nc e (%)

9


29 September 2017

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17

T-bill

3M % 5.84 5.85 5.85 5.85 5.85 5.85 5.85 5.85 5.85 5.85

6M % 5.86 5.89 5.90 5.90 5.90 5.90 5.90 5.90 5.90 5.90

12M % 5.86 5.90 5.90 5.90 5.90 5.90 5.90 5.90 5.90 5.90

PIB 10Y % 8.05 8.44 8.21 8.17 8.24 8.26 8.21 8.18 8.2 8.23

KIBOR 6M % 5.84 5.89 5.87 5.87 5.88 5.91 5.90 5.90 5.89 5.90

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

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

Inflation

Headline inflation % 3.81 3.73 3.66 4.22 4.94 4.78 5.00 3.9 2.9 3.4

Core inflation % 5.30 5.20 5.40 5.30 5.30 5.50 5.50 5.5 5.6 5.5

Food inflation % 3.30 3.00 2.60 3.70 5.00 4.40 4.90 2.4 (0.10) 1.3

External Indicators

Export (PBS) US$ (mn) 1,762 1,727 1,780 1,638 1,801 1,805 1,627 1,912 1,631 1,866

Import (PBS) US$ (mn) 4,230 4,488 4,724 4,419 5,009 4,998 5,092 4,534 4,835 4,952

Trade Deficit (PBS) US$ (mn) (2,468) (2,761) (2,944) (2,781) (3,208) (3,193) (3,465) (2,622) (3,204) (3,086)

Export (SBP) 1,841 1,860 1,783 1,769 2,061 1,766 1,954 1,865 1,828 2,104

Import (SBP) 3,785 4,109 4,196 4,017 4,305 4,108 4,633 5,054 4,720 4,262

Trade Deficit (SBP) (1,944) (2,249) (2,413) (2,248) (2,244) (2,342) (2,679) (3,189) (2,892) (2,158)

Home Remittances US$ (mn) 1,616 1,584 1,488 1,417 1,694 1,539 1,867 1,840 1,542 1,955

Current Account US$ (mn) (836) (1,037) (1,202) (822) (562) (1,337) (1,651) (1,431) (2,051) (550)

Banking Sector

Deposits PkR (bn) 10,472 11,203 10,704 10,730 11,170 11,214 10,993 11,981 11,702 11,651

Advances PkR (bn) 5,251 5,572 5,468 5,477 5,697 5,777 5,936 6,176 6,028 6,035

Investments PkR (bn) 7,053 7,233 7,374 7,467 7,670 7,794 7,849 8,166 7,989 8,145

W. A. lending rate % 8.06 8.04 8.01 7.99 7.89 7.85 7.87 7.86 7.88 n.a

W. A. deposit rate % 3.09 3.02 3.05 3.02 2.99 2.98 2.89 2.84 2.91 n.a

Spread rate % 4.97 5.02 4.96 4.97 4.90 4.87 4.98 5.02 4.97 n.a

Public Finance

Tax collection PkR (mn) 216,273 382,686 223,856 225,486 346,999 249,958 330,957 511,449 n.a n.a

Direct taxes PkR (mn) 81,120 182,988 81,741 80,019 147,242 78,407 117,084 247,210 n.a n.a

Indirect Taxes PkR (mn) 135,153 199,698 142,115 145,467 199,757 171,551 213,873 264,239 n.a n.a

Currency

Fx Reserves US$ (mn) 23,383 23,200 22,242 22,072 21,572 21,019 21,190 21,402 20,223 20,387

USDPkR - Interbank PkR/USD 104.83 104.58 104.84 104.84 104.82 104.79 104.84 104.86 105.48 105.38

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 investment objectives, financial situation or needs of individual recipients. Before acting on any information in this publication/communication, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice. Neither AKD Securities Limited nor any of its affiliates or any other person connected with the company accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained therein.

Subject to any applicable laws and regulations, AKD Securities Limited, its affiliates or group companies or individuals connected with AKD Securities Limited may have used the information contained herein before publication and may have positions in, may from time to time purchase or sell or have a material interest in any of the securities mentioned or related securities or may currently or in future have or have had a relationship with, or may provide or have provided investment banking, capital markets and/or other services to, the entities referred to herein, their advisors and/or any other connected parties.

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Any recipient, other than a U.S. recipient that wishes further information should contact the company.

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

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

Waqas Imdad Ali +92 111 253 111 (637) [email protected] Fertilizer & Textile

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

29 September 2017

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