stocksmart pakistan weekly update - akd traderesearch.akdtrade.com/documents/stock smart weekly nov...

AKD Research [email protected]

+92-21-111-253-111

Weekly Review

The market started off on a weak note, with the market participants pricing in rising domestic COVID-19 cases and uncertainty on the US election outcome. The benchmark KSE-100 index shed 775pts (-1.94%) on the first trading session of the week. Softer than expected inflation reading (8.9%YoY vs. 9.2% consensus estimate), encouraging volumetric offtakes in Cement and OMC sectors, electricity package for the SME (50% tariff reduction on incremental usage) and general industry (25% tariff reduction on incremental usage), and rebound in global markets turned the tide, with KSE-100 index registering 3.5% gain on the second trading session, paring all previous day losses. After a brief respite on Wednesday, the domestic market regained momentum in line with its global peers, pricing in relatively better visibility on the US election outcome, with Demo-crats likely to take control of the White House and Republicans expected to maintain their majori-ty in Senate. Overall, the KSE-100 index gained 2.11%WoW (+844pts) to close the week at 40,732pts. Market participation witnessed a reduction of 21.6%WoW, with an average daily trad-ing volume of 368.2mn shares. Activity remained concentrated in high beta stocks, with UNITY (203.2mn shares), HASCOL (133.6mn shares), POWER (123.1mn shares), PRL (101.5mn shares), and TRG (82.4mn shares) being the top-5 volume churners. Other key news flows impacting the market performance during the week included: i) ECC approving PM’s PKR24 package for farmers, with a proposal to reduce DAP prices by PKR1000 per bag, ii) the federal gov’t marginally reducing the POL product prices (MOGAS/HSD: -PKR1.57/0.84 per ltr), iii) SC dismissing review petitions against GIDC while extending the payment deadline by another 36 months, iv) FBR raising PKR1.33trn in tax collection during 4MFY21, surpassing its relatively soft target of PkR1.32trn, and v) trade balance improving by 14.46%YoY/28.5%MoM during Oct’20, with exports growing by 3.07%/10.16%MoM while imports declining by 5.73%YoY/11.595MoM. Performance-wise, TRG (+17.1%WoW) , HMB (+15.6%WoW) , LOTCHEM (+14%WoW) , FFBL (+10.9%WoW), and POL (+9.6%WoW) were the top gainers, while laggards included GATI (+7.2%WoW), MUREB (-4.0%WoW), APL (-3.2%WoW), ANL (-2.8%WoW), and PAKT (-2.8%WoW).

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.

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AKD Securities

TREC Holder & Registered Broker

Pakistan Stock Exchange

REP-019

Find AKD research on Bloomberg

(AKDS), firstcall.com and Reuters Knowledge

In the near term, the domestic market will continue to closely track global markets, with the out-come of the US presidential election dictating market sentiment. On the domestic front, a rising C-19 caseload could trigger risk-off sentiment, keeping the market under pressure. Relatively weaker market participation in the latter part of the week also points towards some risk aversion. From a macro vantage, CA numbers and MPS announcement later this month will be on top of investors’ minds, where encouraging trade numbers point to another positive reading on the external side. On MPS, we expect the central bank to remain on hold with a view to support do-mestic economic activity.

6 November 2020

Outlook

Top-5 Volume Leaders

Symbol Volume (mn)

UNITY : 203.26

HASCOL : 133.64

POWER : 123.12

PRL : 101.57

TRG : 82.48

Source: PSX & AKD Research

Indic e s KSE- 10 0 KSE- 3 0

This week 40,732 17,082

Last week 39,888 16,750

Change 2.11% 1.98%

Indic e s KMI- 3 0 Allsha re

This week 65,176 28,668

Last week 63,497 28,186

2.64% 1.71%

Mkt Ca p. PkRbn US$ bn

This week 7,537 47.40

Last week 7,400 46.18

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

This week 368.24

Last week 469.60

Change - 21.6%


Index & Volume Chart KSE100 Gainers & Losers

39,112

40,481

40,282 41,071

40,732

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AKD Securities Limited

6 November 2020

StockSmart


This Week’s Daily Reports

2

Pak Strategy: US elections – More things change, more they stay the same, (AKD Daily, Nov 06, 2020)

In arguably one of the most analyzed events occurring at regular intervals (every four years) globally, we find clarity emerging in the impasse for the US Presidential election vote count, where it seems highly likely (multiple paths to electoral majority) that we will find a 46th occu-pant of the White House in Former Vice President Joe Biden.

In this rare event of a US president losing reelection, we opine on the role played by US macros asserting that outperformance by emerging markets during Republican terms have more to do with dollar positioning (strength/weakness) rather than any political setups, hence flagging the negligible role in forecasting equity market performance solely on the basis of political regime.

Looking ahead, a sustained environment of negative real interest rates and the need to en-courage foreign investors to fund US deficits in the wake of the stimulus package would keep the dollar under pressure where conventional understanding assumes Biden is able to execute his proposal to raise corporate taxes, driving outflows from US equities.

From a domestic macro perspective, commodity prices could undergo a bull-run, fueled by historic low-interest rates, trillions in US fiscal stimulus, recovering pandemic-struck economies across the globe (amidst vaccine optimism) where we remain cautious on the external math unraveling (~5% rise in core import/oil commodity prices would expand CAD by ~US$1.0/0.35bn).

For Pakistan, under a Biden presidency, re-setting of relations with China is the major bench-mark for US foreign policy going forward, where unilateral or antagonistic actions could take a back seat. Pakistan is expected to remain prominent, not just in terms of US troops pulling out from Afghanistan (major shifts in policy unlikely) but also with any re-engagement of US policy with Muslim majority countries, and of course developments in the domain of China & India relations.

Pakistan Cement: Demand remains upbeat, calling for expansions, (AKD Daily, Nov 05, 2020)

Local cement dispatches extended their outstanding run with an increase of 16/19% YoY/MoM to 4.9mn tons for Oct’20 where South fared better amongst the two regions, witnessing an increase of 18/23%YoY/MoM while North posted an increase of 16/18% YoY/MoM.

Exports slowed down with a sequential decline of 22% as local players shift their sales mix to-wards local market to take advantage of higher retention prices at offer with impressive de-mand growth in the backdrop. For 4MFY21, local dispatches stand at 10.8mn tons, up 19%YoY.

Given high utilization (101% for North) and support being provided by government in terms of expediting regulatory procedures and a concessionary financing facility (TERF), we believe announcements of capacity expansion can arrive earlier than expected.

We continue to like MLCF (TP: PkR47.4/sh) and LUCK (TP: PkR761.3/sh) from the AKD cement universe with the former being one of the lowest cost producers implying lower sensitivity to retail price variations, while latter’s cost efficiencies coupled with diversified investments make it a safe play.

Pakistan OMCs: FO volumes refuse to stay down, (AKD Daily, Nov 04, 2020)

OMC volumes witnessed an increase of 6%YoY for Oct'20 where sporadic FO sales took the lead (up 46%YoY) on the back of increased FO-based power generation (captive and grid), while retail staples, MS/HSD witnessed a meagre increase of 1/3%YoY translating into ex-FO sales remaining flat.

Overall, local OMC sales have started FY21 on a strong footing, up 9%YoY for 4MFY21 (up 4% excluding FO) where FO again leads the pack with growth of 33%YoY while MS/HSD follow with growth of 6/8% YoY.

Market shares remain in flux with PSO/APL/HASCOL/SHEL accounting for market shares of 45/10/5/8% during Oct'20 where a comparison with Oct'19 reveals decreasing share of PSO/HASCOL/SHEL by 0.6/2.5/0.7ppts while market share of APL increased by 0.4ppts.

APL (TP: PkR400.2/sh, 25.2% upside) continues to be the safe stalwart in the sector with high refinery upliftment guarding the company against fluctuating oil prices. PSO's investment case

Nov 03, 2020

Nov 06, 2020

Nov 05, 2020

Nov 02, 2020

40,500

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6 November 2020

StockSmart


This Week’s Daily Reports

3

remains pinned to "reading the tea leaves" on circular debt clearance following the Govt's agreement with IPPs (yet to be formalized), where a strong policy response can result in significant price performance.

HUBC: An exciting story; twists and turns ahead, (AKD Daily, Nov 03, 2020)

We revisit our investment case on Hub Power Company Ltd post release of detailed financial accounts. The company posted 46/20% YoY/QoQ higher NPAT of PkR8.4bn (EPS: PkR6.28) in 1QFY21. More importantly, HUBC also announced first interim cash dividend of PkR4.0/sh, after a dry spell since 8 consecutive quarters.

Analyzing details of debt repayments (particularly for equity investments), we flag a promi-nent FY23 peak burdening cash flows and shaping payouts to trend in a “U-shape” going forward. Aware of the same, management may remain conservative in the near term to avoid any unsustainable bump in payout policy. Based on lower of the two, FCFE/sh and ROEs of existing power projects, we forecast DPS of PkR7.0/10.0 per share in FY21/22F (dividends from CPHGC, a determining factor).

We also tweak our earnings estimates for HUBC, as we incorporate (i) HUBC’s 38.3% stake in ThalNova Power Project (financial close achieved in Sep’20; expected CoD: Jun’22), (ii) 6 months’ delay in CoD of 60% owned Thar Energy Ltd (TEL), and (iii) 25% tax rate on income from 2015 power policy projects.

Management is also considering multiple plans for utilization of hitherto closed Base plant, where any cash injection after signature of agreements with GoP (Feb’20) should make room for CAPEX. Our revised TP of PkR168/sh implies an upside of 107% at last close—Buy.

Pakistan Strategy: Market momentum bent not broken, (AKD Daily, Nov 02, 2020)

Holding out against COVID-19 resurgence, FATF plenary outcome and political noise amidst a consolidating macro backdrop, the KSE-100 index succumbed, falling 1.7%MoM, with aver-age volumes depleting 25%MoM, and a seasonal pivot to blue-chip plays ahead of earnings season

Isolating sectoral performance MoM we highlight the role of side-stocks and idiosyncratic sectoral catalysts in driving market performance, where further comparison on CYTD basis emphasizes the role played by these “off-board” sectors favored by retail investors, where improved risk appetite drove performance more than improved fundamentals

Conducive policy actions to address supply chain hurdles driving food inflation, limiting gas and power tariff hikes, rehabilitating macros and supportive policy guidance reinforced by execution of tax incentives for construction sector., bolster our view of catalysts over-powering risks emanating from political or event risks

From a fund flow perspective, individuals took gains home (US$15.5mn net sell) followed by mutual funds (US$6.3mn) where as Insurance (US$26.5mn net buy) and Banks (US$15.7mn) were buyers for the month where FPI remained net sellers (US$39.1mn, US$426.7mn net sell CYTD)

We believe the Government would prefer smart/micro lockdowns, restricting non-essential activities over completely disrupting business activities in the country. Our preference tilted towards Banks (particularly top tier) as expectation of resumption in payouts could drive stock performance in the near term, Construction-related sectors, Power and Textiles.


6 November 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 6-Nov-20 29-Oct-20 WoW CYTD

TRJ-CRB Points 149.1553 144.8095 3.00% -19.72%

Nymex (WTI) US$/bbl. 37.56 36.17 3.84% -38.49%

ICE Brent US$/bbl. 38.95 37.13 4.90% -41.36%

N. Gas Henry Hub US$/Mmbtu 2.67 3.03 -11.88% 27.75%

Cotton USd/Pound 77 76.95 0.06% -1.72%

Gold US$/Tr.Oz 1953.44 1867.59 4.60% 28.75%

Sliver US$/Tr.Oz 25.7368 23.2585 10.66% 44.17%

Copper US$/MT 6842.75 6716.5 1.88% 11.28%

Platinum US$/Oz 904.71 848.98 6.56% -6.40%

Coal US$/MT 62.1 59.4 4.55% -22.08%

SPOT 6-Nov-20 29-Oct-20 Chg +/- WoW CYTD

Dollar Index 92.328 93.955 -1.627 -1.73% -4.21%

USD/PkR 159.150 160.254 -1.104 -0.69% 2.75%

USD/JPY 103.340 104.610 -1.270 -1.21% -4.85%

EUR/USD 1.187 1.167 0.020 1.70% 5.88%

GBP/USD 1.312 1.293 0.019 1.44% -1.06%

AUD/USD 0.726 0.703 0.023 3.31% 3.43%

NZD/USD 0.679 0.663 0.016 2.35% 0.67%

CHF/USD 0.901 0.915 -0.015 -1.58% -6.82%

CAD/USD 1.307 1.333 -0.026 -1.93% 0.60%

USD/KRW 1,121 1,131 -10.950 -0.97% -3.09%

CNY/USD 6.608 6.715 -0.107 -1.59% -5.10%

Country Bloomberg Code 6-Nov-20 29-Oct-20 WoW CYTD

Pakistan KSE100 Index 40,732 39,888 2.11% 0.0%

Srilanka CSEALL Index 6,080 5,727 6.17% -0.8%

Thailand SET Index 1,260 1,202 4.86% -20.2%

Indonesia JCI Index 5,336 5,128 4.04% -15.3%

Malaysia FBMKLCI Index 1,520 1,495 1.63% -4.4%

Philippines PCOMP Index 6,686 6,249 6.98% -14.5%

Vietnam VNINDEX Index 938 919 2.09% -2.4%

Hong Kong HSI Index 25,713 24,587 4.58% -8.8%

Singapore FSSTI Index 2,579 2,451 5.22% -20.0%

Brazil IBX Index 42,925 41,097 4.45% -11.8%

India SENSEX Index 41,893 39,750 5.39% 1.5%

China SHCOMP Index 3,312 3,273 1.20% 8.6%

S&P SPX Index 3,510 3,310 6.05% 8.7%

DJIA INDU Index 28,390 26,659 6.49% -0.5%

NASDAQ Composite CCMP Index 11,891 11,186 6.31% 32.5%

UK UKX Index 5,897 5,582 5.64% -21.8%

Germany DAX Index 12,461 11,598 7.44% -6.0%

Qatar DSM Index 9,889 9,691 2.05% -5.1%

Abu Dhabi ADSMI Index 4,718 4,660 1.24% -7.0%

Dubai DFMGI Index 2,160 2,188 -1.25% -21.9%

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

Oman MSM30 Index 3,551 3,558 -0.20% -10.8%

Saudi Arabia SASEIDX Index 8,089 7,908 2.29% -3.6%

MSCI EM MXEF Index 1,166 1,120 4.12% 4.6%

MSCI FM MXFM Index 526 518 1.48% -10.3%

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6 November 2020

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

Average PIB and E/Y differential

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

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(US$'000)Ind., 5.37

Co., (0.61)

Bank/DFI, 0.37 NBFC, 0.11

M.Funds, (2.11)

Ins , 3.63

Others , 1.73

Prop. Trading

, (2.98) (4.00)

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AKD Securities Limited StockSmart


Market PER Chart 2021

6 November 2020

AKD Universe Valuations

Source: AKD Research

Market P/BVS Chart 2021


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6-Nov-20 2017 2018 2019 2020F 2021F

EPS (PkR) 5.82 6.47 7.68 7.66 8.80

EPS chg (%) (15.24) 11.08 18.79 (0.30) 14.88

EPS chg (%) ex-E&P (24.94) 6.38 (0.50) 4.80 17.30

Book Value per Share (PkR) 41.89 44.59 49.40 53.74 57.94

Payout (%) 55.32 49.54 42.51 41.96 45.50

Valuations

Price to Earnings (x) 8.98 8.12 7.23 7.63 6.96

PER (Ex-Banks & E&Ps) (x) 9.48 8.72 9.64 13.25 8.29

Price to Book (x) 1.24 1.17 1.07 0.98 0.90

Price to CF (x) 12.19 9.19 12.56 9.93 6.33

Earnings Yield (%) 11.13 12.32 13.84 13.11 14.37

Dividend Yield (%) 6.84 6.33 6.40 6.34 8.03

EV / EBITDA (x) 6.17 6.13 5.32 4.49 4.57

Profitability

Return on Equity (%) 13.90 14.50 15.55 13.14 12.91

Return on Assets (%) 2.25 2.29 2.45 2.09 2.04

Chg in Sales (%) 16.05 17.88 21.76 (1.43) (4.02)

Gross Margin (%) 35.96 35.12 34.06 34.09 36.41

Operating Margin (%) 24.85 24.38 24.00 23.07 24.42

Net Margin (%) 11.24 10.59 10.34 9.64 10.64

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AKD Universe Active Coverage Cluster’s Valuations

6 November 2020


Stock Symbol Price TP Stance

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

Automobile and Parts

Indus Motors INDU 1,220.05 1,375.00 Buy 174.49 64.88 74.68 6.99 18.80 16.34 2.39 2.33 2.04 9.4 2.5 2.5

Pak Suzuki Motors PSMC 214.00 130.00 Sell (35.45) (38.81) 1.73 n.a n.a 123.59 0.68 0.77 0.77 - - 0.2

Cements

DG Khan Cement DGKC 110.02 117.01 Sell 3.67 (4.93) 7.40 29.94 n.a 14.86 0.68 0.71 0.67 0.9 - 1.3

Lucky Cement LUCK 682.86 761.30 Neutral 32.44 10.34 29.70 21.05 66.04 22.99 2.34 2.23 2.03 1.0 - 0.9

Maple Leaf Cement MLCF 42.64 47.40 Neutral 1.33 (4.40) 2.50 31.96 n.a 17.06 1.53 1.42 1.27 0.6 - 1.3

Fauji Cement Company FCCL 21.21 19.38 Sell 2.05 (0.04) 1.45 10.36 n.a 14.68 1.40 1.39 1.36 7.1 - 5.5

Pioneer Cement Limited PIOC 94.87 64.18 Sell 3.48 (0.92) 1.85 27.27 n.a 51.30 1.62 1.77 1.71 - - 0.4

Cherat Cement Co CHCC 136.62 76.02 Sell 9.98 (9.74) 3.75 13.69 n.a 36.47 2.05 2.42 2.26 0.7 - 0.6

Engineering

Amreli Steels Ltd. ASTL 42.49 56.00 Buy 0.11 (3.79) 1.57 384.48 n.a 27.07 1.03 1.13 1.09 - - -

Fertilizers

Engro Corporation ENGRO 304.78 305.91 Neutral 28.69 37.83 46.50 10.62 8.06 6.55 0.90 0.78 0.68 7.9 9.8 9.8

Engro Fertilizers Limited EFERT 65.62 55.50 Sell 12.63 8.75 8.31 5.19 7.50 7.89 2.02 1.98 1.96 19.8 12.2 12.2

Fauji Fert. Bin Qasim FFBL 25.80 30.0 Buy (6.34) 0.14 1.55 n.a n.a 16.65 3.53 3.46 2.87 - - -

Fauji Fertilizer Company FFC 104.75 127.00 Buy 13.45 15.17 16.07 7.79 6.90 6.52 3.75 3.36 2.98 10.3 11.5 11.5

Fatima Fertilizer FATIMA 27.65 34.43 Buy 5.75 5.98 4.67 4.81 4.62 5.92 0.79 0.71 0.67 7.2 8.5 6.7

Oil & Gas

Oil & Gas Development OGDC 94.53 172.20 Buy 27.53 23.27 20.72 3.43 4.06 4.56 0.65 0.58 0.54 11.6 7.1 7.1

Pak Oilfields POL 349.17 379.00 Buy 59.44 57.69 44.63 5.87 6.05 7.82 2.38 2.37 2.30 14.3 14.3 10.0

Pakistan Petroleum PPL 84.87 143.40 Buy 21.85 18.47 15.85 3.88 4.60 5.35 0.77 0.74 0.71 2.4 1.2 2.4

Hascol Petroleum HASCOL 15.28 UR UR - - - - - - - - - - - -

Attock Petroleum APL 315.17 400.35 Buy 39.79 10.13 29.73 7.92 31.11 10.60 1.66 1.69 1.51 6.3 2.9 5.7

Pakistan State Oil PSO 201.45 214.62 Neutral 22.55 (13.77) 20.20 8.93 n.a 9.97 0.79 0.80 0.75 5.0 - 4.2

Power

Hub Power Co. HUBC 81.66 168.00 Buy 9.37 19.31 19.85 8.72 4.23 4.11 1.84 1.26 1.02 - - 8.6

K-Electric Co. KEL 3.74 UR UR - - - - - - - - - - - -

Kot Addu Power KAPCO 28.90 UR UR - - - - - - - - - - - -

Cable & Electrical Goods

Pak Elektron Ltd PAEL 34.13 37.37 Neutral 1.68 0.09 2.66 20.32 379.53 12.83 0.55 0.55 0.53 - - 3.5

Personal Goods

Nishat Mills NML 89.68 132.00 Buy 16.66 9.97 11.00 5.38 8.99 8.15 0.47 0.46 0.44 4.5 4.5 3.6

Nishat Chunian Ltd. NCL 38.02 55.74 Buy 13.19 1.11 5.37 2.88 34.25 7.08 0.60 0.61 0.57 6.6 2.6 5.9

Banks

Allied Bank Limited ABL 84.50 88.90 Buy 12.65 13.91 11.29 6.68 6.07 7.48 0.83 0.79 0.79 9.5 10.7 10.7

Bank Al Habib BAHL 68.62 65.00 Sell 10.07 15.40 13.41 6.81 4.46 5.12 1.23 1.10 1.01 5.1 5.8 5.8

Bank AlFalah BAFL 35.26 40.59 Buy 7.34 6.49 6.20 4.80 5.43 5.69 0.70 0.61 0.57 11.3 11.3 11.3

Habib Bank Limited HBL 127.83 141.63 Buy 10.45 22.66 23.62 12.23 5.64 5.41 0.83 0.71 0.66 3.9 4.7 5.5

Habib Metropolitn Bank HMB 37.55 45.70 Buy 6.34 9.63 8.46 5.92 3.90 4.44 0.82 0.71 0.65 6.7 6.7 6.7

MCB Bank Limited MCB 168.32 211.00 Buy 20.14 22.35 24.61 8.36 7.53 6.84 1.17 1.10 1.03 10.1 11.9 11.9

Meezan Bank Limited MEBL 94.77 100.00 Neutral 12.12 15.92 16.09 7.82 5.95 5.89 1.94 1.75 1.64 5.3 6.3 6.3

National Bank of NBP 40.45 45.60 Neutral 7.79 12.09 10.81 5.19 3.35 3.74 0.36 0.33 0.31 - - -

United Bank Limited UBL 111.56 138.68 Buy 15.60 16.29 18.74 7.15 6.85 5.95 0.72 0.64 0.61 10.8 10.8 10.8

The Bank Of Punjab BOP 9.07 13.90 Buy 3.12 2.60 2.20 2.91 3.49 4.12 0.51 0.47 0.45 8.3 11.0 11.0

UR - Under Review NML,NCL,PSO,DGKC, LUCK & MLCF - Unconsolidated

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

8


6 November 2020

StockSmart


AKD Universe Coverage Cluster’s Performance


Stocks Symbol Price 1 Year 1 Year

6-Nov-20 1M 3M 6M 12M CYTD High Low

KSE-100 Index 40,731.61 4.1 1.4 33.2 23.3 0.0 43,218.7 27,228.8

Automobile and Parts

Indus Motors INDU 1,220.05 -0.5 -12.4 62.8 25.1 5.0 1429.98 700.38

Pak Suzuki Motors PSMC 214.00 16.1 -13.1 52.0 23.6 -7.2 290.93 124.21

Cements

DG Khan Cement DGKC 110.02 3.6 2.5 62.2 90.0 48.1 117.63 50.05

Lucky Cement LUCK 682.86 8.5 13.2 66.3 87.8 59.4 702.14 310.30

Maple Leaf Cement MLCF 42.64 17.5 18.1 77.6 140.2 84.3 43.92 16.74

Fauji Cement Company FCCL 21.21 11.6 -1.2 26.9 38.2 36.3 22.56 11.68

Pioneer Cement Limited PIOC 94.87 2.4 3.7 191.0 311.6 211.2 104.88 22.81

Cherat Cement Limited CHCC 136.62 23.9 0.4 103.6 299.5 157.5 146.30 41.69

Engineering

Amrel i Steel Ltd ASTL 42.49 4.4 -9.2 44.0 71.3 17.6 53.46 21.28

Fertilizers

Engro Ferti l i zers Ltd. EFERT 65.62 11.3 -3.5 14.3 -4.8 -10.6 78.57 50.72

Engro Chemica l ENGRO 304.78 3.7 -3.2 13.3 11.2 -11.7 366.00 237.65

Fatima Ferti l i zer FATIMA 27.65 -3.8 -2.5 18.1 5.7 4.0 31.88 20.82

Fauji Fert. Bin Qas im Ltd. FFBL 25.80 46.2 32.4 80.5 57.8 32.2 26.15 11.79

Fauji Ferti l i zer Company FFC 104.75 -0.6 -4.0 16.2 12.0 3.2 114.54 82.71

Cable & Electrical Goods

Pak Elektron Limited PAEL 34.13 11.7 1.9 73.0 91.7 26.1 40.37 16.62

Oil & Gas

Oi l & Gas Development OGDC 94.53 -4.5 -17.0 4.5 -24.1 -33.6 154.21 75.01

Pak Oi l fields POL 349.17 -12.2 -15.7 18.7 -4.8 -21.8 473.43 241.11

Pakis tan Petroleum Ltd. PPL 84.87 -1.7 -15.5 4.0 -37.7 -38.1 151.82 69.13

Pakis tan State Oi l PSO 201.45 4.2 10.0 52.7 19.3 5.1 216.54 113.98

Attock Petroleum Ltd. APL 315.17 -6.0 -7.8 16.8 2.0 -14.8 394.43 211.87

Hascol Petroleum HASCOL 15.28 -3.6 10.3 10.3 -35.0 -43.2 52.08 10.65

Power

Hub Power Co. HUBC 81.66 8.1 0.9 11.1 11.6 -12.5 103.21 57.40

K-Electric Limited KEL 3.74 -2.3 -2.6 35.5 -7.7 -14.4 4.77 2.65

Kot Addu Power Company KAPCO 28.90 19.4 18.0 41.5 -17.3 -8.3 35.46 15.00

Personal Goods

Nisaht (Chunian) Ltd. NCL 38.02 4.1 -3.4 34.0 2.5 -10.9 47.63 23.78

Nishat Mi l l s NML 89.68 -6.6 -7.8 46.3 2.4 -15.5 117.81 54.07

Banks

Al l ied Bank Limited ABL 84.50 1.8 0.6 5.0 -2.9 -11.6 104.71 66.82

Bank AlHabib Limited BAHL 68.62 8.2 8.2 27.1 1.9 -11.6 82.00 50.98

Bank AlFa lah BAFL 35.26 0.7 -6.6 2.1 -17.7 -22.8 52.99 28.79

Habib Bank Limited HBL 127.83 -0.9 -1.2 17.4 1.4 -18.8 171.24 94.78

Bank of Punjab BOP 9.07 -3.6 -12.7 9.9 -1.1 -19.9 14.13 7.01

Habib Metropol i tan Bank HMB 37.55 14.5 5.5 27.5 24.9 3.3 42.00 27.30

MCB Bank Limited MCB 168.32 -2.0 -8.2 9.4 -0.8 -17.9 224.53 132.89

Meezan Bank Limited MEBL 94.77 22.0 15.2 43.9 29.0 -0.4 106.21 55.66

National Bank of NBP 40.45 4.0 21.7 31.3 20.9 -6.6 46.30 25.53

United Bank Ltd UBL 111.56 -4.5 -7.1 -1.1 -19.8 -32.2 181.96 89.44

Absolute Performance (%)

9


6 November 2020

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

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

Monetary Rates

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



PIB 10Y % 11.3 11.35 11.09 11.04 11.18 10.16 8.47 8.25 8.61 8.83 9.41 9.58 9.96

KIBOR 6M % 13.08 13.48 13.5 11.23 13.23 12.34 12.08 7.75 7.58 6.79 7.2 7.29 7.09

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

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

Inflation

National CPI Inflation % 11.0 12.7 12.6 14.6 12.0 10.2 8.5 8.2 8.6 9.3 8.2 9.0 8.9

Core inflation (Urban) % 7.7 7.5 7.5 7.9 8.0 7.4 7.7 7.3 7.6 7.8 7.1 7.7 7.3

Core inflation (Rural) % 8.6 8.4 8.1 9.0 9.4 9.4 9.8 9.7 10.0 11.5 9.9 11.1 11.3

Food inflation (Urban) % 13.7 16.6 16.7 19.5 15.2 13.0 10.4 10.6 12.9 15.1 11.3 12.4 13.9

Food inflation (Rural) % 14.6 19.3 19.7 23.8 19.7 15.5 12.9 13.7 15.2 17.8 13.5 15.8 17.7

External Indicators

Export (PBS) US$ (mn) 2,024 2,011 1,993 1,970 2,140 1,814 957 1,396 1,599 2,001 1,584 1,889 2,081

Import (PBS) US$ (mn) 4,074 3,940 4,037 4,037 4,185 3,316 3,088 2,863 3,719 3,687 3,324 4,321 3,820

Trade Deficit (PBS) US$ (mn) (2,050) (1,929) (2,044) (2,067) (2,045) (1,502) (2,131) (1,467) (2,120) (1,686) (1,740) (2,432) (1,739)

Export (SBP) 2,189 2,111 2,108 2,052 1,993 1,820 1,407 1,259 1,582 1,897 1,510 1,951 n.a

Import (SBP) 3,632 3,682 3,791 3,912 3,563 3,321 3,140 2,800 3,559 3,555 3,237 3,818 n.a

Trade Deficit (SBP) (1,443) (1,571) (1,683) (1,860) (1,570) (1,501) (1,733) (1,541) (1,977) (1,658) (1,727) (1,867) n.a

Home Remittances US$ (mn) 2,001 1,820 2,097 1,907 1,825 1,894 1,790 1,873 2,466 2,768 2,095 2,284 n.a

Current Account US$ (mn) 70 (364) (367) (534) (210) (9) (530) 344 (96) 508 211 73 n.a

Banking Sector

Deposits PkR (bn) 13,912 14,312 14,632 14,673 14,815 15,126 14,476 15,481 16,229 16,122 16,327 16,886 16,664

Advances PkR (bn) 8,019 8,095 8,158 8,164 8,212 8,259 8,217 8,357 8,202 8,120 8,053 8,094 8,116

Investments PkR (bn) 7,918 7,886 8,801 8,366 8,725 9,297 9,794 10,382 10,681 10,809 10,869 11,090 10,942

W. A. lending rate % 13.52 12.74 12.73 13.35 13.23 13.01 11.18 10.75 10.08 8.94 8.72 8.26 n.a

W. A. deposit rate % 6.69 6.73 6.65 6.95 7.00 6.91 6.00 5.11 4.31 3.94 3.84 3.77 n.a

Spread rate % 6.83 6.01 6.08 6.40 6.23 6.10 5.18 5.65 5.77 5.00 4.88 4.49 n.a

Public Finance

Tax collection PkR (bn) 323.00 335.30 476.70 318.10 326.30 322.00 243.00 229.30 464.00 n.a n.a n.a n.a

Direct taxes PkR (bn) 105.40 102.80 227.40 112.60 107.70 137.10 82.70 84.70 213.40 n.a n.a n.a n.a

Indirect Taxes PkR (bn) 217.60 232.50 249.30 205.50 218.50 184.90 160.20 144.60 250.60 n.a n.a n.a n.a

Currency

Fx Reserves US$ (mn) 15,424 16,003 17,930 18,645 18,881 17,098 18,755 16,943 18,886 19,599 19,908 19,385 n.a

USDPkR - Interbank PkR/USD 156.04 155.40 155.01 154.74 154.34 159.02 164.43 160.58 165.53 166.87 167.95 166.02 162.82

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

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6 November 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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