AKD Research research@akdsecurities.net

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Weekly Review

Failing to consolidate gains made during the last week, the KSE-100 index gave way to wider macro jitters, amidst an uncertain foreign exchange reserve picture, closing the week at 40,869pts down 1.9%WoW. With the first round of negotiations between the IMF and Paki-stani authorities being inconclusive over fundamental differences on measures to address fiscal imbalances, and GoP expectations of funding from 'friendly countries' failing to mate-rialize, sentiment leaned to favor the bears. During the four session trading week, KSE-100/KSE-All index average volumes stood at 76.58/156.8mn shares per day, moving -35/-26%WoW with KSE-100 volumes averaging 48.8% of total ready market volumes, indicating a shift away from index heavy weights to retail favorites. Key news flows during the week were: 1) The International Monetary Fund (IMF) viewed policy uncertainty and economic imbalances as risks to growth saying that its growth forecasts would slide to 4% in the cur-rent fiscal year from a decade-high of 5.8% in FY18, 2) Pakistan could face a tough time in the coming years as the delegation of Asia Pacific Group (APG)—a subsidiary of Financial Action Task Force (FATF) during its recent visit rated Pakistan partially/non-compliant in 33 out of 40 recommendations, and 3) Prime Minister Imran Khan on Monday led a sharp reac-tion by political leaders to US President Donald Trump's tirade against Pakistan by hinting at review of foreign policy options. CHCC (+9.1%WoW), LUCK (+5.1%WoW) and PIOC (+1.4%WoW) topped the leaderboard during the week, whereas POL (-8.2%WoW), HBL (-5.7%WoW) and DGKC (-5.4%WoW) were laggards. Volume leaders during the week were: 1) LOTCHEM (51.2mn shares), 2) EPCL (36.0mn shares), 3) NRSL (32.4mn shares) and 4) PAEL (32.1mn shares). FIPI outflows reached US$11.6mn, taking MTD outflows to US$48.8mn, marking a continuation a multi-year high outflows from the domestic equity market.

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-019

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As IMF negotiations get delayed, investor expectations of FX reserve funding from China, Saudi Arabia would deliver some welcomed relief. Additionally, expectations of monetary tightening should start factoring into sentiments surrounding commercial banks as the bi-monthly MPS date approaches (expected by 1st Dec). Lastly, the end to the trading year could give rise to calendar-end window dressing, where institutional inflows accelerate in a bid to close books on a promising note.

23 November 2018

Outlook

Index & Volume Chart

Source: PSX & AKD Research

Universe Gainers & Losers

41,353 41,419

40,874

40,869

40,500

40,600

40,700

40,800

40,900

41,000

41,100

41,200

41,300

41,400

41,500

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

19-Nov 20-Nov 22-Nov 23-Nov

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Top-5 Volume Leaders

Symbol Volume (mn)

LOTCHEM : 51.18

EPCL : 36.01

NRSL : 32.40

PAEL : 32.05

STPL : 29.74

Source: PSX & AKD Research

Indices KSE-100 KSE-30

This week 40,869 19,443

Last week 41,661 19,959

Indices KMI-30 Allshare

This week 69,777 29,501

Last week 71,304 30,020

Mkt Cap. PkRbn US$bn

This week 8,096 60.42

Last week 8,235 61.46

Avg. Daily Turnover ('mn shares)

This week 156.89

Last week 213.36

Change -26.47%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

CH

CC

LUC

K

PIO

C

AST

L

MC

B

OG

DC

KEL

DG

KC

HB

L

PO

L

36,000

38,000

40,000

42,000

44,000

46,000

0

55

110

165

220

275

330

385

440

495

Nov-1

7

Dec-1

7

Jan-1

8

Ma

r-1

8

Apr-

18

Ma

y-18

Jun-1

8

Jul-1

8

Aug-1

8

Sep-1

8

Oct

-18

Nov-1

8

(Index)(share mn)

Volume (LHS) KSE-100 Index

AKD Securities Limited

23 November 2018

StockSmart

Pakistan Weekly Update

This Week’s Daily Reports

2

Nov 22, 2018

Pakistan Oil & Gas: Wider Oil price swings are here to stay, (AKD Daily, Nov 23, 2018)

Crude price forecasts have been described as a swinging pendulum, shifting from bullish to bearish, which off-late has accelerated to a point where volatility is the new norm as fore-casts shift at a rapid pace, often on shifty data points and comments made by key decision makers.

Moreover, heightening tensions from global trade tussles, particularly between the US and China, cloud global growth outlooks with noticeable declines in global consumer confidence and moderating PMI data dampen bullish sentiments in Crude.

Citing recent weakness in crude benchmarks as a sign of possible weakness to continue, we highlight the potential for improved macros (US$5/bbl reduction in Crude saves US$1.1bn in the trade bill), while domestic refiners could benefit from shifting dynamics in international cracks for mid distillates.

Advocating a 'buy-on-dips' stance for domestic E&Ps, where any indication of major cuts in the upcoming OPEC meeting (6th Dec) could signal another rally we reiterate our BUY call on OGDC (TP of PkR180/sh) providing total return potential of 32% (inclusive of 7.7% FY19 D/Y).

Pakistan Strategy Market at a crossroad, (AKD Daily, Nov 22, 2018)

Inconclusive IMF talks have extended market uncertainty, however, a lack of definitive bear-ish movement indicates money managers factoring in eventual money flow from different avenues (Saudi, Chinese and IMF).

Timing of fund flows, however, is crucial and holds the key to market direction where nega-tive narrative on fund flow is being countered by positive narrative on eventuality of the same as well as economic benefit of current low oil price (US$5/bbl correction in oil reduces trade bill by US$1.1bn ceteris paribus).

Historical average returns post an IMF program have been slight positive in the 60 and 90 days prior to entry. Current economic situation somewhat resonates with 2001 with IMF program a constant and aid flow from US replaced by China and Saudia, though the back-ground of aid is different.

Highlight defensive plays given uncertainty where picks include Banks (MCB, ABL), select Power (HUBC), Fertilizers (EFERT) and Autos (INDU).

Pakistan Auto: Increased competition = increased CAPEX, (AKD Daily, Nov 19, 2018)

An analysis of updated financial accounts for auto OEMs reveals a clear upswing in industry CAPEX with the last twelve month total outlay reaching PkR7.6bn with PSMC/INDU/HCAR contributing 46/38/16%.

Looking at CAPEX outlays for the three major OEMS, we find that INDU and HCAR maintain higher investment levels per model sold (reflected in frequent model launches, better fea-tures), while PSMC has recently caught up, with CY18 CAPEX/unit hitting levels seen in HCAR (PkR28.4k/unit).

On the other hand, CAPEX is reflected in poor free cash flows, where a historic analysis of cash flows show that variations in net working capital (movement of current assets and liabilities) are a greater threat, where pressures from the same forced PSMC to acquire ST borrowing to fill the gap.

We believe the wheels are in motion for introduction of a new variant (most likely the Alto) to replace the Mehran, with investment in Techno Glass (subsidiary to manufacture wind-shields) offering additional catalysts. Our Dec'19 TP of PkR313/sh (risk free rate/risk premi-um of 13/6%) offers a total return of 28% to last close, while the stock trades at a relatively inexpensive CY19 P/E of 5.1x

Source: PSX & AKD Research

Nov 23, 2018

Nov 19, 2018

Nov 20, 2018

40,640

40,678

40,716

40,754

40,792

40,830

40,868

40,906

40,944

9:1

5

9:3

9

10:0

2

10:2

6

10:4

9

11:1

3

11:3

6

12:0

0

12:2

3

12:4

7

13:1

0

13:3

3

13:5

7

14:2

0

14:4

4

15:0

7

15:3

1

15:5

4

16:1

8

40,700

40,780

40,860

40,940

41,020

41,100

41,180

41,260

41,340

41,420

41,500

9:3

0

9:5

3

10:1

7

10:4

0

11:0

4

11:2

7

11:5

1

12:1

4

12:3

8

13:0

1

13:2

5

13:4

8

14:1

2

14:3

5

14:5

9

15:2

3

41,200

41,240

41,280

41,320

41,360

41,400

41,440

41,480

41,520

9:3

0

9:5

4

10:1

9

10:4

4

11:0

8

11:3

3

11:5

8

12:2

3

12:4

7

13:1

2

13:3

7

14:0

1

14:2

6

14:5

1

15:1

5

41,150

41,220

41,290

41,360

41,430

41,500

41,570

41,640

41,710

9:3

0

9:5

4

10:1

9

10:4

4

11:0

8

11:3

3

11:5

8

12:2

2

12:4

7

13:1

2

13:3

6

14:0

1

14:2

6

14:5

0

15:1

5

AKD Securities Limited

23 November 2018

StockSmart

Pakistan Weekly Update

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 (2019)

Source: AKD Research & Bloomberg

103.0

106.0

109.0

112.0

115.0

118.0

121.0

124.0

127.0

130.0

133.0

136.0

Dec-

17

Jan-1

8

Feb

-18

Mar-

18

Apr-

18

Apr-

18

May-

18

Jun-1

8

Jul-18

Aug-1

8

Sep-1

8

Oct-18

Nov-

18

SPOT Units 23-Nov-18 16-Nov-18 WoW CYTD

TRJ-CRB Points 185.0005 187.2971 -1.23% -4.17%

Nymex (WTI) US$/bbl. 52.23 56.46 -7.49% -12.72%

ICE Brent US$/bbl. 60.18 66.32 -9.26% -9.35%

N. Gas Henry Hub US$/Mmbtu 4.7 4.3 9.30% 58.54%

Cotton USd/Pound 86.75 86.3 0.52% -3.18%

Gold US$/Tr.Oz 1223.22 1221.5 0.14% -5.54%

Sliver US$/Tr.Oz 14.2769 14.41 -0.92% -15.33%

Copper US$/MT 6286.25 6223.5 1.01% -13.34%

Platinum US$/Oz 842.98 845.52 -0.30% -9.16%

Coal US$/MT 93.55 93.75 -0.21% -1.89%

SPOT 23-Nov-18 16-Nov-18 Chg +/- WoW CYTD

Dollar Index 96.805 96.465 0.340 0.35% 4.54%

USD/PkR 134.000 134.000 0.000 0.00% 21.32%

USD/JPY 112.820 112.830 -0.010 -0.01% -0.04%

EUR/USD 1.136 1.142 -0.006 -0.52% -4.92%

GBP/USD 1.283 1.283 -0.001 -0.05% -4.57%

AUD/USD 0.723 0.733 -0.010 -1.39% -7.24%

NZD/USD 0.678 0.688 -0.010 -1.41% -4.28%

CHF/USD 0.997 1.000 -0.003 -0.34% 1.83%

CAD/USD 1.323 1.315 0.008 0.59% 5.21%

USD/KRW 1,131 1,129 1.900 0.17% 5.59%

CNY/USD 6.947 6.938 0.009 0.13% 6.33%

Country Bloomberg Code 23-Nov-18 16-Nov-18 WoW CYTD

Pakistan KSE100 Index 40,869 41,661 -1.90% 1.2%

Srilanka CSEALL Index 5,930 5,955 -0.43% -6.8%

Thailand SET Index 1,622 1,635 -0.79% -7.0%

Indonesia JCI Index 6,006 6,012 -0.10% -4.9%

Malaysia FBMKLCI Index 1,696 1,706 -0.62% -4.7%

Philippines PCOMP Index 7,340 7,083 3.63% -14.0%

Vietnam VNINDEX Index 918 898 2.20% -6.0%

Hong Kong HSI Index 25,928 26,184 -0.98% -13.2%

Singapore FSSTI Index 3,052 3,084 -1.01% -10.2%

Brazil IBX Index 36,074 36,529 -1.25% 14.1%

Russia RTSSTD Index 15,605 15,826 -1.39% 14.5%

India SENSEX Index 34,981 35,457 -1.34% 3.3%

S&P SPX Index 2,650 2,736 -3.16% -1.4%

DJIA INDU Index 24,465 25,413 -3.73% -1.5%

UK UKX Index 6,954 7,014 -0.86% -8.8%

Germany DAX Index 11,149 11,341 -1.69% -14.1%

Qatar DSM Index 10,328 10,214 1.12% 21.1%

Abu Dhabi ADSMI Index 4,985 5,055 -1.40% 13.3%

Dubai DFMGI Index 2,755 2,779 -0.86% -18.3%

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

Oman MSM30 Index 4,453 4,451 0.06% -11.8%

Saudi Arabia SASEIDX Index 7,607 7,662 -0.72% 5.2%

MSCI EM MXEF Index 976 986 -1.05% -15.4%

MSCI FM MXFM Index 528 528 -0.03% -17.1%

EPS Growth PE(x)

Pakistan 20.12% 6.56

Indonesia 8.94% 13.80

Malaysia 13.83% 13.97

Philippines 6.26% 15.57

Vitenam 12.60% 15.31

India 24.68% 16.10

China 12.42% 9.29

% ROE Divd Yld

Pakistan 15.4% 6.90

Indonesia 15.11 2.46

Malaysia 10.23 3.54

Philippines 11.55 1.85

Vitenam 18.57 1.68

India 15.09 1.78

China 11.43 3.40

180

183

186

189

192

195

198

201

204

207

Nov-

17

Dec-

17

Jan-1

8

Mar-

18

Apr-

18

May-

18

Jun-1

8

Jul-18

Aug-1

8

Sep-1

8

Oct-18

Nov-

18

5

AKD Securities Limited

23 November 2018

StockSmart

Pakistan Weekly Update

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

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

No

v-1

7

Jan

-18

Fe

b-1

8

Ap

r-1

8

May

-18

Jul-

18

Au

g-1

8

Se

p-1

8

No

v-1

8

KSE100 MSCI EM

MSCI FM

(4,435)

(3,742)

(2,084)

(1,341)

(5,000)

(4,500)

(4,000)

(3,500)

(3,000)

(2,500)

(2,000)

(1,500)

(1,000)

(500)

-

19-Nov-18 20-Nov-18 22-Nov-18 23-Nov-18

(US$'000)

-1.70

-1.30

-0.90

-0.50

-0.10

0.30

0.70

1.10

No

v-17

Dec

-17

Jan-

18

Feb

-18

Mar

-18

Ap

r-18

May

-18

Jun

-18

Jul-

18

Au

g-18

Sep

-18

Oct

-18

No

v-18

(%)

Ind., (0.22)

Co., (3.00)

Bank/DFI, 4.06

NBFC, (0.98)

M.Funds, 2.39

Ins, 7.98

Others, 2.02

Prop. Trading , (0.63)

(4.00)

(2.00)

-

2.00

4.00

6.00

8.00

10.00

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

Nov-1

7

Jan-1

8

Feb

-18

Apr-

18

Jun-1

8

Aug-1

8

Sep-1

8

Nov-1

8

-23%

-18%

-13%

-8%

-3%

2%

7%

12%

17%

No

v-1

7

Jan

-18

Feb

-18

Ap

r-1

8

Jun

-18

Au

g-1

8

Sep

-18

No

v-1

8

KSE-All Share Index AKD Universe

6

AKD Securities Limited StockSmart

Pakistan Weekly Update

Market PER Chart 2018

Source: AKD Research

23 November 2018

Jul-0

7

Jun-

08

May

-09

May

-10

Apr-1

1

Mar

-12

Mar

-13

Feb-

14

Jan-

15

Jan-

16

Dec-

16

Nov-

17

Nov-

18

14.0

10.5

7.0

3.5

(x)

AKD Universe Valuations

Source: AKD Research

23-Nov-18 2016 2017 2018F 2019F 2020F

EPS (PkR) 7.87 7.41 8.30 9.58 11.62

EPS chg (%) 3.82 (5.90) 12.11 15.33 21.33

EPS chg (%) ex-E&P 19.21 (15.73) 8.71 7.92 34.48

Book Value per Share (PkR) 42.77 46.24 51.06 55.92 62.11

Payout (%) 47.09 47.46 48.16 62.28 52.47

Valuations

Price to Earnings (x) 7.98 8.48 7.56 6.56 5.40

PER (ex-E&P) (x) 6.91 8.19 7.54 6.98 5.19

Price to Book (x) 1.47 1.36 1.23 1.12 1.01

Price to CF (x) 10.27 9.79 7.90 8.24 6.85

Earnings Yield (%) 12.54 11.80 13.22 15.25 18.51

Dividend Yield (%) 5.90 5.60 6.37 9.50 9.71

EV / EBITDA (x) 5.42 5.55 5.22 4.68 4.20

Profitability

Return on Equity (%) 18.40 16.02 16.26 17.12 18.70

Return on Assets (%) 3.75 3.07 3.32 3.52 3.94

Chg in Sales (%) (14.06) 18.71 16.01 8.96 3.79

Gross Margin (%) 32.87 35.23 34.49 35.58 37.08

Operating Margin (%) 21.45 24.85 24.92 26.13 27.23

Net Margin (%) 16.33 12.94 12.51 13.24 15.48

7

AKD Securities Limited StockSmart

Pakistan Weekly Update

AKD Universe Active Coverage Cluster’s Valuations

23 November 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 1,348.82 1,866.00 Buy 165.41 200.66 195.42 8.15 6.72 6.90 3.40 2.89 2.49 8.53 10.38 9.04

Pak Suzuki Motors PSMC 243.95 346.64 Buy 46.49 38.11 32.58 5.25 6.40 7.49 0.68 0.63 0.60 7.62 7.62 4.10

Cements

DG Khan Cement DGKC 104.68 122.00 Buy 18.20 20.17 12.31 5.75 5.19 8.51 0.61 0.59 0.57 7.16 4.06 4.30

Lucky Cement LUCK 532.44 636.00 Buy 42.34 37.72 32.95 12.57 14.12 16.16 2.16 1.99 1.82 2.25 2.44 2.82

Maple Leaf Cement Factory MLCF 51.96 65.00 Buy 8.05 7.92 5.90 6.46 6.56 8.81 1.30 1.00 0.91 6.42 4.81 3.85

Fauji Cement Company Ltd. FCCL 25.15 26.00 Neutral 1.89 2.49 2.36 13.28 10.12 10.68 1.76 1.69 1.65 3.58 7.95 7.95

Pioneer Cement Limited PIOC 54.58 60.00 Buy 12.84 7.24 6.92 4.25 7.54 7.89 1.01 0.91 0.72 10.08 7.46 6.41

Cherat Cement Co Limited CHCC 91.22 96.00 Sell 11.08 12.08 9.46 8.24 7.55 9.65 1.54 1.44 1.33 2.94 3.26 3.84

Gharibwal Cement Ltd GWLC 18.86 36.00 Buy 5.71 3.77 2.70 3.31 5.00 6.99 0.66 0.60 0.61 15.91 7.95 9.28

Cable & Electrical Goods

Pak Elektron Ltd PAEL 32.49 31.44 Sell 6.65 4.32 5.16 4.89 7.51 6.30 0.60 0.57 0.54 8.31 5.54 6.16

Engineering

Amreli Steels Ltd. ASTL 64.97 117.00 Buy 3.62 4.82 11.17 17.97 13.48 5.81 1.73 1.53 1.26 3.08 3.39 7.70

Fertilizers

Engro Corporation ENGRO 330.00 348.84 Neutral 20.47 21.56 27.91 16.12 15.31 11.82 2.09 2.06 1.98 6.36 6.06 6.67

Engro Fertilizers Limited EFERT 76.09 87.75 Buy 8.35 9.40 10.25 9.11 8.09 7.42 2.39 2.32 2.25 11.17 11.12 12.13

Fauji Fert. Bin Qasim Ltd. FFBL 39.99 48.10 Buy 2.03 2.60 2.79 19.66 15.37 14.33 2.78 2.57 2.39 2.13 5.20 5.58

Fauji Fertilizer Company FFC 99.55 104.57 Neutral 8.42 8.75 10.22 11.82 11.38 9.74 4.31 3.84 3.65 7.03 7.87 8.94

Fatima Fertilizer FATIMA 34.00 45.11 Buy 5.06 5.44 6.00 6.72 6.25 5.67 1.31 1.21 1.12 6.62 11.19 12.35

Food Producers

Engro Foods Limited EFOODS 83.01 84.20 Sell 0.75 1.19 1.22 110.96 69.52 67.87 3.44 3.25 3.05 - - -

Oil & Gas

Oil & Gas Development Co. OGDC 143.79 180.00 Buy 14.83 18.00 23.36 9.69 7.99 6.15 1.21 1.10 0.98 4.17 6.95 5.74

Pak Oilfields POL 480.48 562.18 Buy 33.73 39.25 66.04 14.25 12.24 7.28 4.33 4.16 3.54 6.94 7.37 11.66

Pakistan Petroleum PPL 163.67 240.00 Buy 21.72 26.14 33.48 7.54 6.26 4.89 1.72 1.54 1.39 4.78 2.92 9.13

Hascol Petroleum HASCOL 215.01 317.69 Buy 13.61 17.46 22.39 15.80 12.31 9.60 4.21 3.63 3.14 4.07 5.23 7.33

Attock Petroleum APL 498.31 601.08 Buy 53.24 56.83 52.53 9.36 8.77 9.49 3.04 2.76 2.54 8.53 8.03 7.42

Pakistan State Oil PSO 278.13 356.00 Buy 55.90 47.42 53.92 4.98 5.86 5.16 0.88 0.82 0.75 7.49 5.39 73.35

Power

Hub Power Co. HUBC 95.32 142.70 Buy 9.23 9.56 12.37 8.52 7.68 7.71 3.60 3.53 3.65 7.86 7.76 11.27

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

Kot Addu Power Company KAPCO 52.60 41.93 Sell 10.73 12.06 10.90 4.90 4.36 4.83 1.42 1.32 1.27 17.20 17.39 17.58

Personal Goods

Nishat Mills NML 145.91 169.10 Buy 12.12 14.47 17.09 12.04 10.08 8.54 0.58 0.56 0.54 3.43 4.45 5.31

Nishat Chunian Ltd. NCL 61.19 57.15 Sell 6.75 5.48 7.60 9.07 11.18 8.05 1.22 1.16 1.05 4.49 3.68 4.90

Banks

Allied Bank Limited ABL 103.14 121.50 Buy 11.29 12.77 14.93 9.14 8.07 6.91 1.11 1.05 0.98 6.79 7.76 8.73

Bank AlFalah BAFL 49.80 55.16 Neutral 5.30 6.39 6.84 9.40 7.79 7.28 1.21 1.10 0.97 3.01 3.01 3.01

Habib Bank Limited HBL 136.65 169.20 Buy 5.54 19.74 23.41 24.65 6.92 5.84 1.06 0.96 0.86 5.85 5.12 10.25

MCB Bank Limited MCB 200.02 234.16 Buy 18.53 18.82 23.30 10.79 10.63 8.58 1.51 1.43 1.37 8.00 8.00 8.50

National Bank of Pakistan NBP 49.71 57.74 Buy 10.97 9.86 10.61 4.53 5.04 4.68 0.59 0.48 0.45 - 11.06 17.10

United Bank Ltd UBL 139.13 210.60 Buy 21.39 16.58 23.62 6.50 8.39 5.89 0.98 0.94 0.90 9.34 10.06 10.06

8

AKD Securities Limited

23 November 2018

StockSmart

Pakistan Weekly Update

AKD Universe Coverage Cluster’s Performance

Source: PSX & AKD Research

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

2 3 - Nov- 18 1M 3 M 6 M 12 M CYTD High Low

KSE- 10 0 Inde x 4 0 ,8 6 9 .2 8 8 .4 - 3 .7 - 4 .4 1.5 1.0 4 6 ,6 3 7 .6 3 6 ,6 6 3 .4

Automobile a nd Pa rts

Indus Motors INDU 1348.82 6.1 - 10.0 - 16.3 - 22.4 - 19.7 1941.95 1030.62

Pak Suzuki Motors PSMC 243.95 8.1 - 18.9 - 46.5 - 52.1 - 51.0 539.41 205.45

Ce me nts

DG Khan Cement DGKC 104.68 25.1 - 13.2 - 19.5 - 22.8 - 21.7 171.58 81.45

Lucky Cement LUCK 532.44 30.7 - 7.8 - 5.4 3.7 2.9 723.19 395.87

Maple Leaf Cement Factory MLCF 51.96 39.3 - 11.1 - 22.8 - 26.8 - 24.1 87.40 35.66

Fauji Cement Company Ltd. FCCL 25.15 19.2 - 3.0 - 1.8 - 9.4 0.6 31.87 19.24

Pioneer Cement Limited PIOC 54.58 30.2 7.7 0.3 - 12.3 - 13.5 79.30 37.63

Cherat Cement Limited CHCC 91.22 59.7 - 1.5 - 23.3 - 7.9 - 17.8 140.72 56.22

Gharibwal Cement Limited GWLC 18.86 10.2 - 12.9 - 18.2 - 19.7 - 21.8 31.22 16.48

Engine e ring

Amreli Steel Ltd ASTL 64.97 18.1 - 15.9 - 16.8 - 31.6 - 29.9 99.52 54.40

Fe rtilize rs

Dawood Hercules DAWH 130.85 32.6 9.5 6.2 10.2 17.0 137.58 95.31

Engro Fertilizers Ltd. EFERT 76.09 1.1 - 4.8 2.5 41.2 12.4 82.94 60.98

Engro Chemical ENGRO 330.00 10.5 - 3.1 9.8 28.7 20.1 350.22 253.43

Fatima Fertilizer FATIMA 34.00 - 5.0 0.0 19.3 10.7 10.1 37.93 26.83

Fauji Fert. Bin Qasim Ltd. FFBL 39.99 17.1 - 0.1 3.1 12.4 12.5 44.81 31.03

Fauji Fertilizer Company FFC 99.55 12.6 - 2.8 0.8 20.1 25.8 103.68 73.73

Food Produc e rs

Engro Foods Limited EFOODS 83.01 0.4 - 11.1 - 13.9 1.3 3.4 105.73 70.19

Ca ble & Ele c tric a l Goods

Pak Elektron Limited PAEL 32.49 20.5 - 7.0 - 12.6 - 41.3 - 31.6 61.85 21.96

Oil & Ga s

Oil & Gas Development Co. OGDC 143.79 - 2.0 - 6.2 - 11.1 - 8.6 - 11.7 177.31 143.79

Pak Oilfields POL 480.48 - 10.3 - 24.0 - 28.4 - 22.5 - 19.1 707.34 480.48

Pakistan Petroleum Ltd. PPL 163.67 - 4.1 - 22.5 - 23.6 - 16.6 - 20.5 222.96 163.67

Pakistan State Oil PSO 272.33 16.7 - 20.6 - 13.7 - 11.7 - 7.1 352.13 213.74

Attock Petroleum Ltd. APL 498.31 16.8 - 18.7 - 16.5 - 14.6 - 4.7 639.36 413.75

Hascol Petroleum HASCOL 215.01 - 18.9 - 27.3 - 29.5 - 22.3 - 13.0 322.42 211.63

Powe r

Hub Power Co. HUBC 95.32 13.8 - 1.2 - 4.0 - 4.3 4.7 104.87 80.36

K- Electric Limited KEL 5.60 5.9 3.7 - 8.5 - 1.2 - 11.3 7.11 4.77

Kot Addu Power Company KAPCO 52.60 3.8 - 8.9 - 8.2 - 14.5 - 2.4 65.41 46.79

Pe rsona l Goods

Nisaht (Chunian) Ltd. NCL 61.19 20.0 19.6 24.0 29.6 33.7 62.97 43.70

Nishat Mills NML 145.91 12.8 5.4 8.5 1.7 - 2.4 171.56 124.04

Ba nks

Allied Bank Limited ABL 103.14 10.9 - 3.2 5.8 28.8 21.4 109.95 76.72

Bank AlFalah BAFL 49.80 6.0 - 11.5 0.8 22.4 17.2 58.94 38.15

Habib Bank Limited HBL 136.65 9.2 - 11.3 - 21.9 - 17.4 - 18.2 218.99 125.10

MCB Bank Limited MCB 200.02 12.7 - 0.7 - 1.2 - 2.6 - 5.8 236.56 177.16

National Bank of Pakistan NBP 49.71 3.1 - 2.4 - 0.9 13.1 2.4 53.78 43.01

United Bank Ltd UBL 139.13 2.3 - 14.2 - 18.9 - 18.2 - 26.0 215.16 131.28

Absolute Pe rforma nc e (%)

9

AKD Securities Limited

23 November 2018

StockSmart

Pakistan Weekly Update

Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18

Monetary Rates

T-Bills - 3M % 5.99 5.99 6.21 6.26 6.26 6.24 6.26 6.76 7.28 7.73

T-Bills - 6M % 6.01 6.01 5.98 6.23 6.23 6.35 6.35 6.85 7.38 7.84

T-Bills - 12M % 5.91 5.92 6.00 6.28 6.28 6.25 6.38 6.9 7.53 8.05

PIB 10Y % 8.29 8.34 8.42 8.57 8.74 8.56 8.63 8.98 9.6 9.93

KIBOR 6M % 6.18 6.21 6.23 6.44 6.51 6.25 6.34 6.73 7.31 7.79

Discount rate % 6.25 6.25 6.50 6.50 6.50 6.50 7.00 7.00 8.00 8.00

Policy rate % 5.75 5.75 6.0 6.0 6.25 6.00 6.50 6.50 7.50 7.50

Inflation

Headline inflation % 4.0 4.6 4.4 3.8 3.2 3.7 4.2 5.2 5.8 5.8

Core inflation % 5.5 5.5 5.2 5.2 5.8 7.0 7.0 7.1 7.6 7.7

Food inflation % 2.4 3.8 3.7 2.2 0.1 (0.20) 1.0 3.0 3.5 3.3

External Indicators

Export (PBS) US$ (mn) 1,974 1,977 1,971 1,902 2,231 2,133 2,144 1887 1,646 2,017

Import (PBS) US$ (mn) 4,898 4,910 5,607 4,797 5,280 5,066 5,814 5694 4,838 4,992

Trade Deficit (PBS) US$ (mn) (2,924) (2,933) (3,636) (2,895) (3,049) (2,933) (3,670) (3,807) (3,192) (2,975)

Export (SBP) 2,546 2,464 2,111 2,059 2,305 2,246 2,266 2,012 2,009 n.a

Import (SBP) 5,346 5,140 4874 4,334 4,943 4,949 5,166 5,133 5,566 n.a

Trade Deficit (SBP) (2,800) (2,676) (2,763) (2,275) (2,638) (2,703) (2,900) (3,121) (3,557) n.a

Home Remittances US$ (mn) 1,577 1,724 1,639 1,672 1,773 1,651 1,771 1,594 1,929 2,037

Current Account US$ (mn) (1,441) (1,256) (1,617) (1,241) (1,237) (1,947) (2,011) (1,976) (2,200) n.a

Banking Sector

Deposits PkR (bn) 11,969 12,362 12,002 11,933 12,571 12,277 12,258 13,063 12,551 n.a

Advances PkR (bn) 6,280 6,530 6,556 6,629 6,812 6,839 7,046 7,362 7,336 n.a

Investments PkR (bn) 8,475 8,542 7,637 8,127 6,853 7,784 6,733 8,179 7,785 n.a

W. A. lending rate % 7.81 7.74 7.72 7.99 7.60 7.75 7.74 7.85 8.08 n.a

W. A. deposit rate % 2.91 2.89 2.89 2.92 2.95 2.91 2.92 3.00 3.15 n.a

Spread rate % 4.90 4.85 4.83 5.07 4.65 4.84 4.83 4.85 4.93 n.a

Public Finance

Tax collection PkR (mn) 271,046 416,068 273,497 262,464 370,224 294,666 352,501 567,132 n.a n.a

Direct taxes PkR (mn) 98,873 188,476 95,706 89,631 152,524 95,011 125,791 314,441 n.a n.a

Indirect Taxes PkR (mn) 172,173 227,592 177,791 172,833 217,700 199,655 226,710 252,691 n.a n.a

Currency

Fx Reserves US$ (mn) 18,774 20,154 18,957 18,317 17,796 17,540 15,977 16,407 16,891 16,370

USDPkR - Interbank PkR/USD 105.44 109.13 110.53 110.55 111.73 115.60 115.61 119.57 124.83 124.08

10

AKD Securities Limited StockSmart

Pakistan Weekly Update

DISCLOSURES & DISCLAIMERS

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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

Usman Zahid +92 111 253 111 (693) usman.zahid@akdsecurities.net Executive Director Research

Hamza Kamal +92 111 253 111 (603) Hamza.kamal@akdsecurities.net Banking

Ali Asghar Poonawala +92 111 253 111 (646) ali.poonawala@akdsecurities.net OMCs & Automobiles

Waqas Imdad Ali +92 111 253 111 (634) waqas.ali@akdsecurities.net Cements & Fertilizer

Umer Farooq +92 111 253 111 (602) umer.farooq@akdsecurities.net Textiles & Steel

Qasim Anwar +92 111 253 111 (680) qasim.anwar@akdsecurities.net Technical Analysis

Nasir Khan +92 111 253 111 (639) nasir.khan@akdsecurities.net Research Production

Tariq Mehmood +92 111 253 111 (643) tariq.mehmood@akdsecurities.net Library Operations

23 November 2018