the jsk strategist (june 2010) afford ability vs. sustanability!!

8/7/2019 The JSK Strategist (June 2010) Afford Ability vs. Sustanability!!

1/19

E & S

ECONOMICS & STRATEGYTHE JSK STRATEGIST

J 07, 2010

Executive Summary

A ,

, J 5. C -

, ,

, C G T (CGT) . N-

V A T (VAT) 15%

-

. A IMF , 6%,

-

.

Economic Recovery: Exceeds Expectations!

F GDP 4.5% 4.1%

FY2010. E

5.6% , 4.6% 3.8% . A, -

. A,

4% GDP FY2011.

National Budget: As It Is!

T - IMF VAT

15%, , GST 17%, 16% -

. I ,

,

.

Key Policy Rate Unchanged At 12.5%, Monetary Stance Undeterred

T M 24, -

12.5%. W

SBP , -

.

Global Markets: Eurozone Crisis, Spillovers Ruin Emerging Markets

D G

M. S -A, S&P

500 9.39% M, MSCI E MSCI E M

7.09% 8.12% , E-

. H, -

, -

M.

Benchmark KSE100 Index: Promising Returns Ahead!

P - 18% 22%

.

Federal Budget 2011: Affordability Vs. Sustainability!!

A Blurry Hype Or A Leap Of Faith??


2/19

2 E & S

J 2010

THE JSK STRATEGIST

Contents

KSE 100: Pre-Budget Fears Cause Upheavals! 3

Federal Budget FY2011: What Was And What Is? 4

Federal Budget FY2011: As It Is! 6

Capital Markets: A Dismayed May! 7

Global Benchmarks Monitor 10

KSE100: A Defensive Strategy With Incentive Tactics 11

Economy: Indicators On The Upside! 15

The Macro View 17

Events Calendar 17

JSK Securities Ltd Contact Details 18


3/19

3 E & S

Federal Budget 2011: Before It Went Live!

J 2010

KSE100: Pre-Budget Fears Cause Upheavals!

I 2009 2010, , KSE100 -

. I 2009, 12%, 7,902

. I ,

KSE100 10% 10,677 , 9,636

J 4, 2010.

C , -

E

. T -

13% , -

3% .

T - -

2009 ;

D 2009, , ,

33%, -

.

T , -

11,500 19.5% -

J 4 .

THE JSK STRATEGIST

S: KSE & JSK R

In a striking similarity with2009, KSE100 index lostalmost 13% in pre-budget

sessions this year

The benchmark index re-

covered 33% after budget

announcements to an yearlytotal of over 60% in 2009

88

92

96

100

104

108

112

116

120

Pre Budget Sessions - Two Months

KSE 100 - Run Down to Budget

FY09 vs FY10 (Rebased)

KSE 100 - 2009 KSE 100 - 2010

Budget Announcements

Post Budget Sessions - Two Months

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

KSE100 Index Relative Performance

2009 2010

S: KSE & JSK R


4/19

4 E & S

J 2010

THE JSK STRATEGIST

Shifting Priorities

F P FY2011 (J-

J) J 5. I - , FY2011 -

. T FY2011

VAT ,

. I I M-

F (IMF),

GDP , 9%,

.

Expenditures And Revenues: What To Expect?

T FY2011 -

, . T

, .

H, -, ,

. T 4.5% GDP,

VAT

GST 100 , 16% 17%,

4%.

A ,

IMF VAT

5% . T

PKR1.7 , .

M,

, ,

R P P,

.

W , E -

KSE100 . C

, CGT

- . A

CGT. H, CGT

- ,

. F -

PKR7.4 .

IMF guidelines remain vital foreconomic managers

FIPI stood at a net PKR7.4

billion in pre-budget sessions

S: FBR & JSK R

Federal Budget 2011: What Was And What Is?

20%

43%

7%

22%

20%

4%

12%

20%

28%

36%

44%

0.0

1.0

2.0

3.0

4.0

FY07 FY08 FY09 FY10 FY11E

PKR TrillionBudget Outlays and Growth

Budg et Outlay (LH S) G row th (RH S)

19% 19%15%

21% 19%

14%

16%

18%

20%

22%

0.0

0.4

0.8

1.2

1.6

2.0

FY07 FY08 FY09 FY10E FY11P

PKR TrillionTax Revenues and Growth

T ax Revenues ( LH S) Revenue Grow th (RHS )


5/19

5 E & S

J 2010

THE JSK STRATEGIST

Focus Areas: All Out efforts

W

.

A (FY2010) 7

N

F C A (NFC). A NFC,

. A -

PSDP PKR446

FY2010 PKR280 FY2011. P,

-

.

T PKR144 FY2010 -

,

. O , -

12.5% FY2010. H, IMF

, -

FY2011. A,

- -

US IMF. H,

, - -

PSDP IMF S--A.

I FY2011 ,

IMF , 6%, ,

36 ,

I VAT ( ), -

.

G

Q4-FY2010

, ,

, .

The government exceeded its

targets of bank borrowing of

S: SBP & JSK R

Federal Budget 2011: What Was And What is?

5%

0%

-3%

2%

7%

-4%

3%

0%-1%

-6%

-4%

-2%

0%

2%

4%

6%

8%

1.8

1.9

2.0

2.1

2.2

2.3

2.4

Jul Aug Sep Oct Nov Dec Jan Feb Mar

PKR Trillion

Govt Domestic Debt - Outstanding FY10

Govt Borrowing (LHS) Growth (RHS)

7th NFC Award Weightage

Population 82.0%

Poverty/backwardness 10.3%Revenue Collection/Generation 5.0%

Inverse population density 2.7%


6/19

6 E & S

J 2010

THE JSK STRATEGIST

Federal Budget FY11: As it is!

Finance Bill: makes its way!T FY11 S - 25% 20% . H, -

VAT -

, IMF . A,

, 4.5% LSM

. F -

GST 100 , 16% 17%,

.

W , VAT

VAT . I , -

-

. I

4% GDP, VAT 3 -

.

A, ,

. H, ,

- -

.

A 2010

, . T

. I

,

. W ,

, -

.

I ,

. T -

-

.

FY10 ( R ) FY11 Growth

Resources 2,497 2,598 4.04%

Internal Resources 1,919 2,211 15.22%

Revenue Receipts 1,397 1,377 -1.43%

Capital Receipts 260 325 25.00%

Financing of PSDP by Provinces 184 342 85.87%

Change i n Provi nci al Cas h Bal ance 78 167 114.10%

External Resources 578 387 -33.04%

Expenditure 2,585 2,765 6.96%

Current Expenditure 2,017 1,998 -0.94%

PSDP 510 663 30.00%Other Devel opment Expenditure 118 124 5.08%

Est. Op. Shortfall (60) (20) -66.67%

Bank Borrowing 88 167 89.77%

BUDGETARY POSITION

The government also vowed

to reform PSEs

VAT implementation delayed

by 3 months

S: M F

FY10-12 FY13 FY14upto 6 months 10.0% 12.5% 14.5%

6-12 months 7.5% 8.0% 8.5%

> 12 months - - -

Capital Gain Tax rates

Source: KSE


7/19

7 E & S

Capital Markets: A Dismayed May!

J 2010

Eurozone Crisis: Spillovers Penetrated

I Fear The Greeks Even When They Bring Gifts

Publius Vergilius Maro (Virgil), 70 - 19 BC.

A US , -

, , E

G . T E

. W US$6 ,

.

T P, I-

, G S, T PIGS. I ,

PIGS , ,

E . A ,

PIGS -

. T ;

D

-

;

E , , -, -

. A , -

, .

G M E E

G . E US$1

,

E, P, S, I, G, I, H

U K. N ,

G, P S ,

, . C

THE JSK STRATEGIST

S: S & G P 2009/2010 -2013, IMF, W B, BIS & JSK R

Global markets have wit-

nessed an abysmal an-

guish during May

A bailout package of

US$1 trillion was an-nounced

Eurozone Government Debt, External Debt, and Internal Investment Position at 2009 Year End


8/19

8 E & S


J 2010

,

, .

I EU , -

, EU ? (E

, ) E, . I ,

EU -

. W

, G

P P 23% G

EU . T P

G .

T G EU -

E . T

E -

E . E

. N, -

EU ,

.

I E , G-

, ,

- - . T

, E

. R, E , -

, C A M

.

A - , US , T

. T ,

16 E, - US$1.2237

. T , ,

US$70 F.

THE JSK STRATEGIST

Portuguese banks hold

23% more Greek bonds

E US$1.2237

1.20

1.24

1.28

1.32

1.36

1.40

1.44

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Euro Vs US$ Year To Date Performance

(14.87%)

1.21

1.25

1.29

1.33

1.37

Apr-10 May-10 Jun-10

Euro Vs US$ (Europe Debt Crisis)

(10.76%)

S: B & JSK R

Germany banned naked

short sales and nakedcredit-default swaps


9/19

9 E & S


J 2010

T , -

,

US$1,238/. T

US E. T -

- .

T PIGS -

. A

M,

. H , -

-

.

THE JSK STRATEGIST

Gold hit a YTD high ofUS$1,238/oz.

Global markets remains

uncertain

76

78

80

82

84

86

88

1,050

1,070

1,090

1,110

1,130

1,150

1,170

1,190

1,210

1,230

1,250

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Gold US$/oz US$ IndexGold Vs US$ Index

Gold (US$/Oz) US$ Index

S: B & JSK R

700

800

900

1,000

1,100

1,200

1,300

30

50

70

90

110

130

150

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10

Oil (US $/bbl) Gold (US$/oz)WTI Crude Oil Vs Gold

Oil (US$/bbl) Gold (US$/oz)

1,050

1,150

1,250

65

70

75

80

85

90

J an -10 F eb -10 Mar-10 A pr -10 May -10 J un -10

Oil (US$/bbl) Gold

(US$/oz)WTI Crude Vs Gold Y TD (2010)

Oil (US$/bbl) Gold (US$/oz)

S: B & JSK R


10/19

10 E & S


J 2010

THE JSK STRATEGIST

S: B & JSK R

NAME COUNTRY OPEN CLOSE CHANGE (%) YTD (%) 2009 (%) 2008 (%) P/E

KARACHI 100 INDEX PK 10,389.46 9,326.42 (10.23) 4.44 60.05 (57.09) 10.50

KARACHI ALL SHARE INDEX PK 7,298.14 6,546.90 (10.29) 3.19 51.46 (54.48) N/M

ISE NATIONAL 100 INDEX TU 58,400.21 54,384.94 (6.88) 1.53 96.64 (51.63) 9.52

FTSE Bursa Malaysia KLCI MA 1,346.89 1,285.01 (4.59) 1.17 45.17 (39.33) 17.41

EGYPT HERMES INDEX EG 667.31 594.70 (10.88) 0.72 34.24 (53.93) 13.43

KARACHI 30 INDEX PK 10,460.46 9,243.66 (11.63) (0.67) 79.57 (67.19) 10.25

DAX INDEX GE 6,166.92 5,964.33 (3.29) (1.35) 23.85 (40.37) 14.54

NASDAQ COMPOSITE INDEX US 2,498.74 2,257.04 (9.67) (2.20) 43.89 (40.54) 28.30

QE Index QA 7,527.89 6,785.96 (9.86) (2.23) 1.06 (28.12) 10.68

KOSPI INDEX SK 1,721.21 1,622.78 (5.72) (2.66) 49.65 (40.73) 11.67

BHSE ALL SHARE INDEX BJ 1,590.66 1,450.28 (8.83) (3.22) (19.17) (34.52) N/M

TADAWUL ALL SHARE INDEX SR 6,891.72 6,120.52 (11.19) (3.22) 27.46 (55.19) 17.51

BEL 20 INDEX BE 2,572.46 2,453.37 (4.63) (3.49) 31.59 (53.76) 11.97

MEXICO IPC INDEX MX 32,832.45 31,547.55 (3.91) (3.51) 43.52 (24.23) 16.11

BSE SENSEX 30 INDEX IN 17,386.08 16,944.63 (2.54) (4.00) 76.35 (52.48) 17.21

SWISS MARKET INDEX SZ 6,607.71 6,312.60 (4.47) (4.24) 18.27 (34.77) 15.14

S&P 500 INDEX US 1,202.26 1,089.41 (9.39) (4.50) 23.45 (38.49) 15.37

DOW JONES INDUS. AVG US 11,151.83 10,136.63 (9.10) (4.76) 18.82 (33.84) 13.87

MSM30 Index OM 6,851.92 6,294.43 (8.14) (4.76) 17.05 (40.73) 13.38

KUWAIT SE PRICE INDEX KU 7,266.40 6,699.70 (7.80) (5.10) (9.99) (38.03) N/M

TOPIX INDEX (TOKYO) JN 956.72 880.46 (7.97) (5.33) 5.63 (41.77) 31.27

NZX 50 INDEX NZ 3,280.35 3,047.75 (7.09) (6.19) 18.94 (32.80) 10.26

FTSE 100 INDEX GB 5,260.99 5,188.43 (1.38) (6.25) 22.07 (31.33) 12.30

AMMAN SE GENERAL INDEX JO 2,550.87 2,401.57 (5.85) (6.49) (8.15) (24.94) 37.26

ADX GENERAL INDEX UA 2,795.38 2,604.17 (6.84) (7.68) 14.79 (47.49) 9.78

RUSSIAN RTS INDEX $ RU 1,517.83 1,384.59 (8.78) (8.73) 128.62 (72.41) 8.66

NIKKEI 225 JN 10,695.69 9,768.70 (8.67) (9.72) 19.04 (42.12) 32.11ALL ORDINARIES INDX AU 4,807.10 4,453.60 (7.35) (10.90) 33.43 (43.01) 29.83

HANG SENG INDEX HK 20,811.36 19,765.19 (5.03) (11.51) 52.02 (48.27) 13.95

TAIWAN TAIEX INDEX TA 7,952.17 7,373.98 (7.27) (12.58) 78.34 (46.03) 16.80

CAC 40 INDEX FR 3,828.46 3,507.56 (8.38) (13.64) 22.32 (42.68) 13.15

ESTX 50 Pr EC 2,816.50 2,610.26 (7.32) (15.23) 21.14 (44.37) 12.20

DFM GENERAL INDEX UA 1,736.61 1,579.54 (9.04) (16.04) 10.22 (72.42) 18.33

IBEX 35 INDEX SP 10,422.80 9,359.40 (10.20) (26.87) 29.84 (39.43) 9.59

SSE COMPONENT STOCK IX CH 10,422.56 10,204.17 (2.10) (27.06) 111.24 (63.36) 21.40

Athex Composite Share Pr GR 1,853.55 1,550.78 (16.33) (34.37) 22.93 (65.50) 9.23

GLOBAL BENCHMARKS YTD RANKED RETURNS

MONTHLY CHANGE

The countrys benchmark KSE100

Index topped our Global Bench-mark Monitor comprising 36 glob-

al benchmarks, in terms of year to

date returns


11/19

11 E & S

J 2010

THE JSK STRATEGIST

KSE100: A Defensive Strategy With Incentive Tactics!

Mitigating Market Correlations Through Defensive Stocks

D , . I , -

E,

. W

-

. A ,

-

.

D M

, M .

T KSE100 A 15, 2010 10,677 , 13.65% D 31, 2009 . W

A 15

.

T A

E

. H, C

, C -

K -

.

O ,

- - , -

CGT ,

- -

.

N,

19.5% J 4 11,500

.

8000

9000

10000

11000

12000

13000

14000

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11

KSE100 Index Investment Case Scenarios

Base Case Scenario

11, 500 points, 19.5%

Upside Potential

Bullish Case Scenario

13,000 points, 35%

Upside Potential

Bearish Case Scenario

10,300 points, 6.88%

Upside Potential

Current Index Level

9,636.88 points

S: B & JSK R

Our base case scenario

suggests a 19.5% upsidepotential for KSE100 Index

from June 4th closing lev-

els.

Domestic markets wit-

nessed a bloodbath duringMay

By following a strict and

disciplined fundamentallybacked quantitative ap-

proach could still harness

signicant benets of port-folio diversication


12/19

12 E & S

J 2010

THE JSK STRATEGIST


A KSE100

, , KSE100 -

, ,

.

B ,

KSE100 ,

.

A

(A 15) . O -

..

. W

. T

. W ,

,

, . U -

, .

T , -

. H,

U ,

. Y -

!

O -

. T KSE100

, , -

.

Current 2009 2008 2009 2008

Pakistan Telecommunication Ltd 8.42 7.67 6.35 5.18 N/M -112.16% 74,804.79 8.55 0.9 9.2

Fauji Fertil izer Co Ltd 13.47 16.29 11.53 23.57 19.04% 36.96% 83,352.07 66.28 5.1 7.9

Hub Power Co 13.96 13.98 8.67 9.62 43.56% -1.75% 69,244.78 38.46 1.3 7.5

Kot Addu Power Co Ltd 14.15 16.13 10.53 13.3 -28.84% 59.61% 42,901.41 22.50 1.6 6.5

Oil & Gas Development Co Ltd 5.48 5.33 11.76 7.64 25.22% -2.00% 329,163.20 N/A 1.8 6.8

Pakistan Petroleum Ltd 6.44 3.54 5.28 8.94 40.58% 17.52% 176,609.90 0.00 4.6 10.5

Pakistan Oilfields Ltd 8.55 8.33 14.62 4.11 -33.68% 22.11% 45,119.75 0.16 2.5 7.8

Bank AL Habib Ltd 6.80 5.5 2.99 4.62 22.53% 8.00% 30,602.36 0.00 1.9 12.2

Allied Bank Ltd 6.35 6.49 4.95 8.34 92.23% 9.43% 38,590.09 271.82 1.7 7.5

Shifa International Hospitals Ltd 9.40 8.8 5.19 4.35 -17.32% 35.40% 1,539.80 151.46 1.5 6.3

D/E

RatioP/B P/E

Dividend YieldCompany

EPS Growth Enterprise

Value (PKR Mn)

S: B & JSK R

Investors should take po-

sitions with a margin ofsafety

Undervalued stocks oer

excellent upside prospects

even if they appreciate totheir respective fair market

values


13/19

13 E & S

J 2010

THE JSK STRATEGIST


F ' KSE100

...

F KSE100

D ,

, -

.

-3.22%

-16.04%

-8.73%

4.44%

-7.68%

-34.48%

-26.87%

-5.10%

-2.66%

2.28%

-2.23%

-6.25%

0.72%

-13.64%

-4.76%-4.24%

-1.35%

-4.76%-3.39%

-11.51%

-4.50%

-12.58%

-3.22%

-10.90%

-6.19%

1.17%

-3.51%-4.00%

-27.06%

-2.20%

-9.72%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

0

2

4

6

8

10

12

14

16

18

20

Valuation (x) Performance (%)Relative Valuation of KSE100 Vs Major Global Mar kets

P/E P/B Y TD Per for ma nc e ( %)

4.44%

-26.87%

-6.19%

-10.90%

-34.48%

-2.23%

-13.64%

-6.25%

0.72%

-16.04%

-12.58%

-3.39%

-7.68%

-1.35%-4.24%

-11.51%

1.17%

-3.22% -4.76%

2.28%

-3.51%

-8.73%

-4.50%

-9.72%

-2.66%

-4.00%

-27.06%

-2.20%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

0

1

2

3

4

5

6

7

8

Dividend Yield (%) Performance (%)Dividend Yields Comparison of KSE100 Vs Major Global Markets

Dividend Yield Estimated Dividend Yield YTD Performance (%)

S: B & JSK R

S: B & JSK R


14/19

14 E & S

J 2010

THE JSK STRATEGIST


T KSE100 10% -A,

. KSE100

5 YTD . M

YTD

.

S: B & JSK R

S: B & JSK R

9,200

9,400

9,600

9,800

10,000

10,200

10,400

10,600

10,800

Jan-10 Feb-10 Mar-10 May-10

KSE100 Index Year To Date Performance

4.44%

9,200

9,700

10,200

10,700

2-Apr 16-Apr 30-Apr 14-May 28-May

KSE100 Index

(10.47%)

(1,000)

(500)

0

500

1,000

1,500

2 -Ap r 1 6- Ap r 30 -Apr 1 4- May 2 8- May

(PKR

Million)

Net Foreign Position

60

80

00

20

40

60

80

00

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10

MSCI Pakistan Vs Global Benchmarks (Rebased)

MSCI PK MSCI World MSCI Europe MSCI North America

-50

0

50

100

(%) Excess Return Over MSCI World

-50

0

50

100

(%) Excess Return Over MSCI North America

-50

0

50

100

(%) Excess Return Over MSCI Europe

70

90

110

130

150

170

190

210

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10

MSCI Pakistan VS Frontier Markets (Rebased)

MSCI PK MSCI Frontier Markets

-50

0

50

100

(%) Excess Return Over MSCI Frontier Markets


15/19

15 E & S

Economy: Indicators On The Upside!

J 2010

Economic Resilience: IMF Monitors Closely

O , P -. E, GDP

. T GDP 4.5% 4.1%

FY2010. E -

5.6% , 4.6% 3.8% .

E

. I

- ,

. H, -

.

A, IMF , -

. R (US$7.3 , J -A

FY2010), C S F (CSF) () -

(PKR45 , J-M FY2010) .

I M F (US$1.2 )

M 6%

. H,

, -

.

5.8%6.8%

4.1%

2.0%

3.5%4.5%

0%

2%

4%

6%

8%

FY06 FY07 FY08 FY09 FY10 FY11P

GDP Growth

-1%

0%

1%

2%

3%


Money Supply and CPI - FY10

Money Supply Growth CPI

THE JSK STRATEGIST

GDP growth target re-vised upward to 4.5%

IMF tranche of US$1.2

billion received in May

-20%

-10%

0%

10%

20%

30%

40%

0

200

400

600

800

1000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

US$ millionRemittances and MoM Growth

R em mi tta nc es (L HS ) MoM G row th (R HS )

-200%

0%

200%

400%

600%

800%

0

2

4

6

8

10

12

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

PKR BillionFIPI and MoM Growth

FIPI (LHS) Growth (RHS)

S: MF & JSK R S: SBP & JSK R

S: SBP & JSK R S: NCCPL & JSK R


16/19

16 E & S

Economy: Indicators On The Upside!

J 2010

F 2010

. N, SBP

, 12.5%.

T

--GDP ( -

) 2% GDP FY2010 (FY2009: 1.5% GDP). T

5.1% FY2010

IMF. T

, 35-40 . H,

-

.

C, FY2011

, 10%

. T -

. T -

. I

, -

. A ,

. B PSE,

PKR200 .

W -

4.3%, 4.5%. H,

CSF, K-L IMF

. A , -

. H, -

-

.

8

10

12

14

16

Jul Oct Jan Apr Jul Oct Jan Apr

%

Deposit & Lending Rates

Wavg Lending Rate Wavg Depos it Rate

-1.61%

-0.88%

2.35%1.79%1.95%

3.09%

-0.43%

0.73%

0.03%

-2%

-1%

0%

1%

2%

3%

4%

2.1

2.3

2.5

2.7

2.9

3.1

3.3

3.5


PKR Trillion

Private Credit & MoM Growth - FY10

Private Credit (LHS) Credit G rowth (R HS )

THE JSK STRATEGIST

CSF, Kerry-Lugar and IMF

inows remain vital for na-

S: SBP & JSK R S: SBP & JSK R


17/19

17 E & S

The Macro View

J 2010

Money Markets

THE JSK STRATEGIST

S: SBP, FBR, FBS, NCCPL JSK R

Tenor 03 - May 31 - May Change

1 Week 11.50% 12.37% 0.87%

2 Week 11.81% 12.31% 0.50%

1 Month 12.03% 12.31% 0.28%

3 Month 12.18% 12.16% -0.02%

6 Month 12.27% 12.27% 0.00%

9 Month 12.60% 12.58% -0.02%

1 Year 12.68% 12.66% -0.02%

2 Year 12.80% 12.77% -0.03%

3 Year 12.88% 12.86% -0.02%

KIBOR

S: SBP & JSK R

Macro Indicators Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Forex Reserves (US$ bn) 11,738 14,266 14,806 14,239 13,735 15,070 14,516 14,786 14,951 15,049 16,149

Remmittances (US$ mn) 745 781 806 758 743 698 668 589 764 756 -

Exports (US$ mn) 1,554 1,467 1,599 1,627 1,431 1,620 1,626 1,527 1,869 1,835

Imports (US$ mn) 2,811 2,171 2,447 2,748 2,191 2,717 2,525 2,330 2,504 2,804

Trade Deficit (US$ mn) 1,257 704 848 1,121 760 1,097 899 803 635 969 -

Forei gn Portfol io I nv (PKR mn) 973 7,855 10,652 3,182 1,076 355 1,289 1,413 9,192 6,744 2,049

Non-Bank Sa vi ngs (PKR mn) 36,082 19,950 6,884 25,602 9,855 16,503 18,902 14,842 20,777 16,655 -

Tax Revenues (PKR mn) 74,680 86,188 102,817 107,956 87,860 122,503 112,489 96,743 118,189 - -

Private Credit (PKR bn) 3,112 3,085 3,157 3,214 3,276 3,378 3,363 3,387 3,388 - -

Banking Spread (%) 4.82 4.36 4.70 4.52 4.75 4.49 4.60 4.62 4.47 4.19 -

Money Supply Growth -0.02% 0.04% 1.98% 0.59% 2.38% 2.19% -0.58% 0.56% 0.43% - -

Consumer Price Index (CPI) 1.50% 1.70% 0.50% 1.00% 1.40% -0.50% 2.40% 0.40% 1.30% 1.70% -

Quantum Index - LSM 197 193 184 197 192 204 217 219 223 - -

FISCAL YEAR 2010

Tenor WTD Avg Yield

3 Year 12.4207%

5 Year 12.4993%

7 Year 12.5941%

10 Year 12.6552%

PAKISTAN INVESTMENT BONDS

Currency 03 - May 31 - May Change

USD 84.1050 85.2393 -1.35%

EUR 110.7729 104.8373 5.36%

GBP 127.9965 123.8894 3.21%JPY 0.8880 0.9335 -5.12%

FOREX

Events Calendar

Event/Announcement Period Expected Date Prior Results

Economic Survey FY10 04 - Jun -

National Budget (PKR tn) FY11 05 - Jun 1.30

Money Supply Growth April 02-10 Jun 0.43%

Export Figures (US$ bn) May 08-12 Jun 1,835

Import Figures (US$ bn) May 08-12 Jun 2,804

Consumer Price Index - YoY May 09-13 Jun 1.70%

Economic Calendar

Corporate Calendar

Company Ticker Period Expected Date Prior Results (EPS)

TRG Pakistan TRG 3QFY10 03 - Jun N/A

Lotte Pakistan PTA Ltd LOTPTA 1QCY10 04 - Jun PKR0.89 - 4QCY09

Arif Habib Securities Ltd AHSL 3QFY10 04 - Jun PKR1.51 - 2QFY10

Bank of Punjab Pakistan BOP CY2009 04 - Jun PKR(19.07) - CY2008

WorldCall Telecom Ltd WTL 3QFY10 04 - Jun PKR(0.57) - FY2009

Pakistan Oilfields Ltd POL 3QFY10 04 - Jun PKR23.59 - FY2009

S: SBP & JSK R


18/19

18 E & S

JSK Contact Information

J 2010

JSK Research

Bilal Subhani

Head Of Research

T: +92 213 537 0681 (D)

M: +92 300 856 9680

E: @.

Osman Kafray

Research Analyst

T: +92 213 582 1238 (E: 107)

M: +92 300 2591091

E: @.

Sundus Naz

Junior Analyst

T: +92 213 582 1239 (E: 108)

Karachi Office

The Plaza, Block 9, Clifton, Karachi, Pakistan

Tel: +92 213 582 1238

Fax: +92 51 289 5115

Email: @.

THE JSK STRATEGIST

JSK Brokerage

Ibrar Bashir

Senior Manager Operations

T: +92 51 289 5118 (D)

M: +92 300 856 7669

E: @.

Trading Desk

T: +92 51 289 5111-12, E:105

Risk Management Desk

T: +92 51 289 5113-14, E:108

Account Management Desk

T: +92 51 289 5113-14, E:103

Islamabad Office

1111, Islamabad Stock Exchange Towers, Jinnah Ave-nue, Islamabad, Pakistan

Tel: +92 51 289 5111

Fax: +92 51 289 5115

JSK Research is also available at Bloomberg

AC


19/19

Analysts CertificationJ 2010

I, Bilal Subhani, hereby certify that all of the views expressed in this report accurately reflect my personalviews about the markets, sectors, securities and companies that are the main subject of this report. I also certi-

fy that no part of my compensation was, is or will be , directly or indirectly, related to the specific recommen-dations or views expressed in this report.

THE JSK STRATEGIST

JSK Research is also available at Bloomberg

DisclosureThis report has been prepared by JSK Securities Limited and is for distribution only under such circumstances asmay be permitted by applicable law. It has no regard to the specific investment objectives, financial situation orparticular needs of any specific recipient. It is published solely for informational purposes and is not to be con-strued as a solicitation or an offer to buy or sell any securities or related financial instruments or the solicita-tion of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. Norepresentation or warranty, express or implied, is provided in relation to the accuracy, completeness or relia-bility of the information contained herein nor is it intended to be a complete statement or summary of the se-

curities, markets or developments referred to in the report. The report should not be regarded by recipients asa substitute for the exercise of their own judgment. Before acting on any advice or recommendation in this ma-terial, clients should consider whether it is suitable for their particular circumstances and, if necessary, seekprofessional advice. The price and value of the investments referred to in this material and the income fromthem may go down as well as up, and investors may realize losses on any investments. Past performance is notnecessarily indicative of future results. Future returns are not guaranteed, and a loss of original capital mayoccur. Any opinions expressed in this report are subject to change without notice and may differ or be contra-ry to opinions expressed by other analysts as a result of using different assumptions and criteria. The analysiscontained herein is based on numerous assumptions. Different assumptions could result in materially differentresults. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel,sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting marketinformation. JSK Securities Limited is under no obligation to update or keep current the information containedherein. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories ofinvestors. Foreign currency rates of exchange may adversely affect the value, price or income of any securityor related instrument mentioned in this report. For investment advice, trade execution or other enquiries, cli-ents should contact regional sales representative. Neither JSK Securities Limited nor any of its affiliates, direc-tors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any partof this report. The material is based on information that we consider reliable, but we do not represent that it isaccurate or complete, and it should not be relied on as such. Additional information will be made available up-on request.

the jsk strategist (june 2010) afford ability vs. sustanability!!

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