AKD Research research@akdsecurities.net

+92-21-111-253-111

Weekly Review

Retracing lost ground following elevated sentiments from the "Davos in the Desert" US$6bn

Saudi funding facility and expectations of additional bilateral assistance, weakened by sub-

sequent earnings misses from index heavy Banks, the KSE-100 index closed at 40,556pts up

5.5%WoW. Key news flows moving the market included: 1) PM Imran Khan described the

US$6bn bailout package as big relief for Pakistan and vowed to mediate between Saudi Ara-

bia and Yemen to end their ongoing conflict, 2) FM Asad Umar constituted a seven-member

core group to formulate a Memorandum of Economic and Financial Policies for discussion

with the IMF aimed at getting financial assistance with the IMF delegation scheduled to visit

Islamabad from Nov 7th-20th for discussion on MEFP with Pakistani authorities, 3) After

deliberating in at least eight meetings, the government approved PkR1.20/KwH average

increase in base tariff at a meeting of the ECC of the cabinet with a cumulative impact of

about PkR124bn, 4) PM Imran Khan will pay his first official visit to China from Nov 2-5th at

the invitation of the Chinese leadership inking a number of agreements, the Foreign Office

announced, and 5) Global Oil prices dropped more than 1% on Friday, heading for a third

weekly loss after Saudi Arabia warned of oversupply. Daily traded volumes jumped 51.1%

WoW to average 301.0mn, with volume leaders being: 1) BOP (146.8mn shares), 2) KEL

(114.5mn shares), 3) LOTCHEM (90.5mn shares), and 4) TRG (54.2mn shares). Gains at the

bourse were led by: 1) KAPCO (+21.6%WoW), 2) GWLC (+14.8%WoW), 3) EFOODS (+14.6%

WoW), and 4) NML (+13.6%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©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.

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TREC Holder & Registered Broker

Pakistan Stock Exchange

REP-019

Find AKD research on Bloomberg

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

Positive outcome of PM Khan's second visit to Saudi Arabia has perpetuated the notion of

further assistance from Malaysia (28th Oct) and China (2nd Nov) where the lack of material

financial assistance could depress sentiment. Data points of significance to global economic

growth, developed market outlooks and oil stock drawdowns could sway commodity prices,

while continuation of earnings announcements is expected to keeps volumes lofty.

26 October 2018

Outlook

Index & Volume Chart

Source: PSX & AKD Research

Universe Gainers & Losers

38,345

37,715

39,271 39,632 40,556

36,000

36,500

37,000

37,500

38,000

38,500

39,000

39,500

40,000

40,500

41,000

210,000

215,000

220,000

225,000

230,000

235,000

240,000

245,000

250,000

22-Oct 23-Oct 24-Oct 25-Oct 26-Oct

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Top-5 Volume Leaders

Symbol Volume (mn)

BOP : 146.81

KEL : 114.49

LOTCHEM : 90.45

TRG : 54.21

PAEL : 45.87

Source: PSX & AKD Research

Indices KSE-100 KSE-30

This week 40,556 19,586

Last week 38,430 18,449

Indices KMI-30 Allshare

This week 69,940 29,668

Last week 65,362 28,423

Mkt Cap. PkRbn US$bn

This week 8,167 61.66

Last week 7,841 58.64

Avg. Daily Turnover ('mn shares)

This week 301.03

Last week 199.22

Change 51.11%

36,000

38,000

40,000

42,000

44,000

46,000

0

55

110

165

220

275

330

385

440

495

Oct

-17

Dec-1

7

Jan-1

8

Feb

-18

Ma

r-1

8

Apr-

18

Ma

y-18

Jul-1

8

Aug-1

8

Sep-1

8

Oct

-18

(Index)(share mn)

Volume (LHS) KSE-100 Index

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

KA

PC

O

GW

LC

EFO

OD

S

NM

L

KEL

UB

L

PO

L

FATI

MA

NB

P

PSM

C

AKD Securities Limited

26 October 2018

StockSmart

Pakistan Weekly Update

This Week’s Daily Reports

2

Oct 25, 2018

Result Previews: NML & ASTL 1QFY19E, (AKD Daily, Oct 26, 2018)

NML – Core earnings on a recovering path: Previewing 1QFY19E result (scheduled today) for NML, we expect the company to post an unconsolidated profit of PkR748mn (EPS: PkR2.13) vs. PkR707mn (EPS: PKR2.01) in 1QFY18, up 6%YoY. The growth shall arise from broad based improvement in core textile business (core EPS: PkR1.29 in 1QFY19 vs. PkR0.65 in 1QFY18), where i) sturdy topline growth (+25%YoY) due to higher demand in low value added segments and ii) gross margin accretion (+88bps) are playing key roles. However, 29%YoY decline in other income due to absence of payouts from power portfolio (i.e. PKGP & LPL) restrains overall earnings growth. Sequentially, 1QFY19 earnings are likely to drop 44%, where i) lower other income (-59%QoQ) and ii) 4QFY18 one-offs (i.e. exchange gain & re-bates adjustment) are the key culprits.

ASTL – volumetric growth to push earnings higher: ASTL is scheduled to announce 1QFY19 results today (Oct 26’18), where we expect the company to post NPAT of PkR427mn (EPS: PkR1.44) vs. PkR195mn in 1QFY18 (EPS: PkR0.66), up 2.18xYoY. The earnings growth is pri-marily a function of i) topline growth (2.1xYoY) which comes from higher prices and volumes (i.e. additional units from dhabeji line) and ii) low base effect (plant shut down for mainte-nance in SPLY). However, margins at gross level are likely to remain under stress (GM: 16.4% in 1QFY19 vs. 18.85% in 1QFY18) due to escalating cost pressures and lower capacity utiliza-tion at new Dhabeji line. On a sequential basis, 1QFY19 earnings are likely to remain 27% lower due to tax credit booked in the 4QFY18. Profit before tax, however, is expected to significantly increase due to sequential margin recovery (+3.2pptsQoQ) and volumetric growth (+24%QoQ).

Pakistan Economy: 'Davos in the Desert’ shines for Pakistan, (AKD Daily, Oct 24, 2018)

Second time lucky, PM Khan and senior cabinet members managed to secure US$6bn sup-port package on their latest overture to the Kingdom of Saudi Arabia, since coming to office. The support package comprises US$3bn as balance of payment support and deferred pay-ment facility up to US$3bn for oil imports (~57% of expected crude oil imports).

Undoubtedly, the support package should truncate near term pressures on external account and should create enabling environment for the GoP to tap other funding sources (i.e. Euro-bond & Sukuk).

We continue to see Pakistan approaching the IMF for initiating another program, consider-ing the relatively large net financing gap (~US$15bn in FY19-20F). However, support from friendly countries could better position the GoP in negotiating the terms of a potential bailout.

From a historical perspective, the market gained 5.9% in 8 trading sessions in the backdrop of Saudi Aid (US$1.5bn) in 2014. Saudi assistance this time should improve investor confi-dence, translating into broad based rally. Further bolstering this sentiment are similar agree-ments potentially to be inked by countries PM Khan is visiting next (i.e. Malaysia and Chi-na).

Pakistan Economy: CAD widens to US$952mn in Sep’18, (AKD Daily, Oct 23, 2018)

CAD for Sep’18 recorded at US$952mn compared to US$592mn in Aug’18, up 61%MoM, where sequential weakness is reflective of the seasonal slowdown in remittance inflows (-29%MoM to US$1.45bn).

Encouragingly, the trade deficit contracted 15%MoM during the month, where both imports and exports witnessed double-digit declines of 15%MoM and 14%MoM, respectively.

We continue to expect the GoP to seek an IMF bailout despite the PM and other officials’ statements indicating otherwise. In this regard, we highlight that dollar inflows from friendly countries may not suffice to bridge the large net financing gaps (US$8.4bn/US$4.71bn in FY19/FY20F).

However, any materialization of the same would improve investors’ sentiment and could provide further impetus to the on-going relief rally at the bourse.

Source: PSX & AKD Research

Oct 24, 2018

Oct 26, 2018

Oct 22, 2018

Oct 23, 2018

39,200

39,400

39,600

39,800

40,000

40,200

40,400

40,600

9:1

5

9:3

9

10:0

3

10:2

6

10:5

0

11:1

3

11:3

7

12:0

0

12:2

4

12:4

7

13:1

0

13:3

4

13:5

7

14:2

1

14:4

4

15:0

8

15:3

2

15:5

5

16:1

9

39,200

39,300

39,400

39,500

39,600

39,700

39,800

39,900

40,000

40,100

40,200

9:3

0

9:5

3

10:1

7

10:4

0

11:0

4

11:2

8

11:5

1

12:1

5

12:3

8

13:0

2

13:2

5

13:4

9

14:1

2

14:3

6

14:5

9

15:2

3

37,400

37,520

37,640

37,760

37,880

38,000

38,120

38,240

38,360

9:3

0

9:5

4

10:1

9

10:4

4

11:0

9

11:3

3

11:5

8

12:2

3

12:4

7

13:1

2

13:3

7

14:0

2

14:2

6

14:5

1

15:1

6

38,400

38,520

38,640

38,760

38,880

39,000

39,120

39,240

39,360

9:3

0

9:5

4

10:1

8

10:4

1

11:0

5

11:2

8

11:5

2

12:1

5

12:3

9

13:0

2

13:2

6

13:4

9

14:1

3

14:3

6

15:0

0

15:2

3

38,200

38,300

38,400

38,500

38,600

38,700

38,800

38,900

9:3

0

9:5

4

10:1

9

10:4

4

11:0

9

11:3

3

11:5

8

12:2

3

12:4

8

13:1

2

13:3

7

14:0

1

14:2

6

14:5

1

15:1

6

AKD Securities Limited

26 October 2018

StockSmart

Pakistan Weekly Update

This Week’s Daily Reports

3

PSO & HASCOL: Results Previews, (AKD Daily, Oct 22, 2018)

Slow volumetric performance, currency fluctuations and range-bound ex-refinery bench-marks are expected to keep the lid on earnings growth for PSO and HASCOL.

HASCOL is expected to report 3QCY18 earnings on Friday, 26th Oct'18, where we expect NPAT of PkR644.6mn (EPS:PkR4.45) +73%YoY/+116%QoQ, where currency based loss is the major factor swaying profitability.

PSO has notified its Board Meeting for Saturday, 27th Oct'18, where our 1QFY19 NPAT fore-cast stands at PkR2.12bn (EPS:PkR5.42/sh) -58%YoY/-5%QoQ, with major dampeners ema-nating from lower volumetric sales (FO sales volume down 84%YoY) and slower inventory gains.

AKD Securities Limited

26 October 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 (2018)

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

Oct-17

Nov-

17

Jan-1

8

Feb

-18

Mar-

18

Apr-

18

May-

18

Jun-1

8

Jul-18

Aug-1

8

Sep-1

8

Oct-18

SPOT Units 26-Oct-18 19-Oct-18 WoW CYTD

TRJ-CRB Points 193.8429 197.1761 -1.69% 0.42%

Nymex (WTI) US$/bbl. 66.59 69.12 -3.66% 11.28%

ICE Brent US$/bbl. 75.83 80.12 -5.35% 14.22%

N. Gas Henry Hub US$/Mmbtu 3.38 3.22 4.97% 9.39%

Cotton USd/Pound 86.25 87.25 -1.15% -3.74%

Gold US$/Tr.Oz 1233.59 1226.9 0.55% -4.74%

Sliver US$/Tr.Oz 14.6225 14.5766 0.31% -13.28%

Copper US$/MT 6253 6228 0.40% -13.80%

Platinum US$/Oz 826.03 830.65 -0.56% -10.99%

Coal US$/MT 99.75 99.75 0.00% 4.61%

SPOT 26-Oct-18 19-Oct-18 Chg +/- WoW CYTD

Dollar Index 96.822 95.713 1.109 1.16% 4.56%

USD/PkR 132.150 133.772 -1.622 -1.21% 19.65%

USD/JPY 112.080 112.550 -0.470 -0.42% -0.70%

EUR/USD 1.135 1.151 -0.017 -1.44% -4.98%

GBP/USD 1.279 1.308 -0.028 -2.16% -4.83%

AUD/USD 0.703 0.712 -0.009 -1.22% -9.78%

NZD/USD 0.647 0.659 -0.012 -1.87% -8.65%

CHF/USD 1.002 0.996 0.006 0.61% 2.40%

CAD/USD 1.315 1.310 0.004 0.33% 4.59%

USD/KRW 1,142 1,132 9.750 0.86% 6.65%

CNY/USD 6.946 6.929 0.017 0.24% 6.31%

Country Bloomberg Code 26-Oct-18 19-Oct-18 WoW CYTD

Pakistan KSE100 Index 40,556 38,430 5.53% 0.5%

Srilanka CSEALL Index 5,832 5,761 1.23% -8.4%

Thailand SET Index 1,629 1,668 -2.34% -6.6%

Indonesia JCI Index 5,785 5,837 -0.90% -8.4%

Malaysia FBMKLCI Index 1,683 1,732 -2.83% -5.4%

Philippines PCOMP Index 7,064 7,152 -1.22% -17.2%

Vietnam VNINDEX Index 901 958 -6.00% -7.8%

Hong Kong HSI Index 24,718 25,561 -3.30% -17.2%

Singapore FSSTI Index 2,972 3,063 -2.95% -12.6%

Brazil IBX Index 34,649 34,684 -0.10% 9.6%

Russia RTSSTD Index 15,275 15,644 -2.36% 12.1%

India SENSEX Index 33,349 34,316 -2.82% -1.5%

S&P SPX Index 2,706 2,768 -2.25% 0.7%

DJIA INDU Index 24,985 25,444 -1.81% 0.6%

UK UKX Index 6,928 7,050 -1.73% -9.1%

Germany DAX Index 11,146 11,554 -3.53% -14.1%

Qatar DSM Index 10,153 10,193 -0.39% 19.1%

Abu Dhabi ADSMI Index 4,882 4,989 -2.13% 11.0%

Dubai DFMGI Index 2,736 2,758 -0.77% -18.8%

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

Oman MSM30 Index 4,453 4,444 0.19% -11.8%

Saudi Arabia SASEIDX Index 7,836 7,648 2.45% 8.4%

MSCI EM MXEF Index 949 971 -2.32% -17.7%

MSCI FM MXFM Index 519 521 -0.41% -18.6%

EPS Growth PE(x)

Pakistan 21.20% 6.73

Indonesia 10.09% 13.68

Malaysia 14.13% 13.22

Philippines 6.99% 15.22

Vitenam 12.96% 14.60

India 22.20% 14.79

China 13.21% 9.37

% ROE Divd Yld

Pakistan 15.8% 7.17

Indonesia 15.16 2.55

Malaysia 10.42 3.61

Philippines 11.62 1.92

Vitenam 18.62 1.66

India 15.37 1.86

China 11.56 3.34

180

183

186

189

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207

Oct-17

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-18

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8

Jul-18

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8

Sep-1

8

Oct-18

5

AKD Securities Limited

26 October 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

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Oct

-17

No

v-1

7

De

c-1

7

Fe

b-1

8

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Se

p-1

8

Oct

-18

KSE100 MSCI EM

MSCI FM

(3,683)

(1,201)

(9,685)

349

(2,983)

(12,000)

(10,000)

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

22-Oct-18 23-Oct-18 24-Oct-18 25-Oct-18 26-Oct-18

(US$'000)

-1.70

-1.30

-0.90

-0.50

-0.10

0.30

0.70

1.10

Oct

-17

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

(%)

Ind., (5.98)

Co., 1.20

Bank/DFI, (3.86)

NBFC, (0.37)

M.Funds, 24.00

Ins, (2.07)

Others, 0.54

Prop. Trading , 3.75

(10.00)

(5.00)

-

5.00

10.00

15.00

20.00

25.00

30.00

0.60

0.70

0.80

0.90

1.00

1.10

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1.30

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1.50

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1.70

1.80

Oct

-17

Dec-1

7

Feb

-18

Ma

r-1

8

Ma

y-18

Jul-1

8

Aug-1

8

Oct

-18

-23%

-18%

-13%

-8%

-3%

2%

7%

12%

17%

Oct

-17

De

c-1

7

Feb

-18

Mar

-18

May

-18

Jul-

18

Sep

-18

Oct

-18

KSE-All Share Index AKD Universe

6

AKD Securities Limited StockSmart

Pakistan Weekly Update

Market PER Chart 2018

Source: AKD Research

26 October 2018

Jul-

07

Jun

-08

Ma

y-0

9

Ap

r-1

0

Ap

r-1

1

Ma

r-12

Feb

-13

Jan

-14

Jan

-15

De

c-15

No

v-1

6

Oct

-17

Oct

-18

14.0

10.5

7.0

3.5

(x)

AKD Universe Valuations

Source: AKD Research

26-Oct-18 2016 2017 2018F 2019F 2020F

EPS (PkR) 7.87 7.41 8.32 9.61 11.72

EPS chg (%) 3.82 (5.90) 12.36 15.44 22.02

EPS chg (%) ex-E&P 19.21 (15.73) 9.06 8.10 35.48

Book Value per Share (PkR) 42.77 46.24 51.07 55.90 62.11

Payout (%) 47.09 47.46 47.65 51.87 44.98

Valuations

Price to Earnings (x) 8.22 8.73 7.77 6.73 5.52

PER (ex-E&P) (x) 6.83 8.10 7.43 6.87 5.07

Price to Book (x) 1.51 1.40 1.27 1.16 1.04

Price to CF (x) 10.52 12.21 8.25 8.34 6.96

Earnings Yield (%) 12.17 11.45 12.86 14.85 18.12

Dividend Yield (%) 5.73 5.43 6.13 7.70 8.15

EV / EBITDA (x) 5.73 5.87 5.53 4.93 4.39

Profitability

Return on Equity (%) 18.40 16.02 16.29 17.18 18.87

Return on Assets (%) 3.75 3.07 3.33 3.54 3.97

Chg in Sales (%) (14.06) 18.71 12.14 11.51 8.53

Gross Margin (%) 32.87 35.23 35.42 35.86 35.81

Operating Margin (%) 21.51 24.89 25.46 26.25 26.28

Net Margin (%) 16.33 12.94 12.97 13.43 15.10

7

AKD Securities Limited StockSmart

Pakistan Weekly Update

AKD Universe Active Coverage Cluster’s Valuations

26 October 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 1,325.48 1,864.00 Buy 165.41 200.66 199.71 8.01 7.02 6.64 3.34 2.83 2.44 8.68 10.56 9.43

Pak Suzuki Motors PSMC 229.18 346.64 Buy 46.49 38.11 32.58 4.93 8.20 9.59 0.64 0.81 0.77 5.24 3.20 2.56

Cements

DG Khan Cement DGKC 94.87 122.00 Buy 18.20 20.17 12.31 5.21 4.70 7.71 0.56 0.54 0.52 7.91 4.48 4.74

Lucky Cement LUCK 471.51 636.00 Buy 42.34 37.72 32.95 11.14 12.50 14.31 1.91 1.77 1.61 2.55 2.76 3.18

Maple Leaf Cement Factory MLCF 43.15 65.00 Buy 8.05 7.92 5.90 5.36 5.45 7.31 1.08 0.83 0.75 7.72 5.79 4.64

Fauji Cement Company Ltd. FCCL 24.33 26.00 Neutral 1.89 2.49 2.36 12.85 9.79 10.33 1.71 1.64 1.60 3.70 8.22 8.22

Pioneer Cement Limited PIOC 47.67 60.00 Buy 12.84 7.24 6.92 3.71 6.59 6.89 0.88 0.79 0.63 11.54 8.54 7.34

Cherat Cement Co Limited CHCC 66.05 96.00 Buy 11.08 12.08 9.46 5.96 5.47 6.98 1.12 1.04 0.96 4.06 4.51 5.30

Gharibwal Cement Ltd GWLC 18.27 36.00 Buy 5.71 3.77 2.70 3.20 4.84 6.77 0.64 0.59 0.59 16.42 8.21 9.58

Cable & Electrical Goods

Pak Elektron Ltd PAEL 31.20 31.44 Buy 6.65 4.32 5.16 4.69 5.33 4.47 0.58 0.40 0.38 8.65 7.81 8.68

Engineering

Amreli Steels Ltd. ASTL 62.00 117.00 Buy 3.62 4.82 11.17 17.15 12.86 5.55 1.65 1.46 1.20 3.23 3.55 8.06

Fertilizers

Engro Corporation ENGRO 330.09 348.84 Neutral 20.47 21.56 27.91 16.13 15.31 11.83 2.09 2.06 1.98 6.36 6.06 6.66

Engro Fertilizers Limited EFERT 81.77 87.75 Buy 8.35 9.40 10.25 9.79 8.70 7.98 2.57 2.50 2.42 10.40 10.35 11.28

Fauji Fert. Bin Qasim Ltd. FFBL 37.82 48.10 Buy 2.03 2.60 2.79 18.60 14.54 13.55 2.63 2.43 2.26 2.25 5.50 5.90

Fauji Fertilizer Company FFC 99.52 104.57 Neutral 8.42 8.75 10.22 11.82 11.37 9.74 4.31 3.84 3.65 7.03 7.87 8.95

Fatima Fertilizer FATIMA 36.57 45.11 Buy 5.06 5.44 6.00 7.23 6.73 6.10 1.41 1.30 1.21 6.15 10.41 11.48

Food Producers

Engro Foods Limited EFOODS 93.94 84.20 Sell 0.75 1.19 1.22 125.56 78.67 76.80 3.89 3.68 3.45 - - -

Oil & Gas

Oil & Gas Development Co. OGDC 157.74 180.00 Buy 14.83 18.00 23.36 10.63 8.76 6.75 1.32 1.20 1.08 3.80 6.34 5.23

Pak Oilfields POL 554.82 562.18 Sell 33.73 39.25 66.04 16.45 14.13 8.40 5.00 4.81 4.09 6.01 6.38 10.10

Pakistan Petroleum PPL 189.19 240.00 Buy 21.72 26.14 33.48 8.71 7.24 5.65 1.99 1.78 1.60 4.14 2.53 7.90

Hascol Petroleum HASCOL 288.70 317.69 Neutral 9.17 14.00 24.25 31.48 20.62 10.72 4.07 3.83 3.14 2.08 2.94 6.06

Attock Petroleum APL 475.49 724.84 Buy 63.89 73.88 80.18 7.44 6.44 5.93 2.42 2.32 2.21 8.94 8.41 14.72

Pakistan State Oil PSO 264.99 399.08 Buy 55.90 53.54 58.22 4.74 4.95 4.55 0.84 0.78 0.72 7.86 4.72 11.32

Power

Hub Power Co. HUBC 87.24 142.70 Buy 9.23 9.56 10.43 7.79 7.02 7.05 3.29 3.23 3.34 8.60 8.48 12.33

K-Electric Co. KEL 5.99 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 53.98 64.38 Buy 10.73 11.09 10.79 5.03 4.87 5.00 1.46 1.40 1.35 16.77 16.95 17.14

Personal Goods

Nishat Mills NML 144.10 169.10 Buy 12.12 14.47 17.09 11.89 9.96 8.43 0.57 0.55 0.53 3.47 4.51 5.38

Nishat Chunian Ltd. NCL 54.88 57.15 Sell 6.75 5.48 7.60 8.13 10.02 7.22 1.10 1.04 0.95 5.01 4.10 5.47

Banks

Allied Bank Limited ABL 101.96 121.50 Buy 11.29 12.77 14.93 9.03 7.98 6.83 1.10 1.04 0.97 6.87 7.85 8.83

Bank AlFalah BAFL 50.08 55.16 Neutral 5.30 6.39 6.84 9.45 7.83 7.32 1.21 1.11 0.98 3.00 3.00 3.00

Habib Bank Limited HBL 131.78 169.20 Buy 5.54 19.74 23.41 23.77 6.67 5.63 1.02 0.93 0.83 6.07 5.31 10.62

MCB Bank Limited MCB 191.41 234.16 Buy 18.53 18.82 23.30 10.33 10.17 8.21 1.45 1.37 1.31 8.36 8.36 8.88

National Bank of Pakistan NBP 48.79 57.74 Buy 10.97 9.86 10.61 4.45 4.95 4.60 0.58 0.47 0.44 - 11.27 17.42

United Bank Ltd UBL 144.04 210.60 Buy 21.39 16.58 23.62 6.73 8.69 6.10 1.01 0.98 0.93 9.03 9.72 9.72

8

AKD Securities Limited

26 October 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 6 - Oc t- 18 1M 3 M 6 M 12 M CYTD High Low

KSE- 10 0 Inde x 4 0 ,5 5 6 .4 5 - 0 .9 - 3 .6 - 10 .8 - 2 .1 0 .2 4 6 ,6 3 7 .6 # # # # # # #

Automobile a nd Pa rts

Indus Motors INDU 1325.48 - 7.9 2.1 - 29.2 - 25.3 - 21.1 1941.95 1030.62

Pak Suzuki Motors PSMC 229.18 - 24.3 - 34.1 - 52.6 - 54.7 - 54.0 566.60 205.45

Ce me nts

DG Khan Cement DGKC 94.87 - 8.2 - 13.1 - 33.6 - 35.2 - 29.1 171.58 81.45

Lucky Cement LUCK 471.51 - 5.0 - 10.3 - 29.0 - 12.7 - 8.9 723.19 395.87

Maple Leaf Cement Factory MLCF 43.15 - 11.8 - 11.3 - 39.4 - 39.2 - 37.0 87.40 35.66

Fauji Cement Company Ltd. FCCL 24.33 5.0 5.8 - 13.0 - 18.2 - 2.7 31.87 19.24

Pioneer Cement Limited PIOC 47.67 16.4 - 2.0 - 27.1 - 30.8 - 24.5 79.30 37.63

Cherat Cement Limited CHCC 66.05 - 15.9 - 28.4 - 48.0 - 42.3 - 40.4 140.72 56.22

Gharibwal Cement Limited GWLC 18.27 - 4.7 - 12.1 - 27.1 - 35.3 - 24.2 31.22 16.48

Engine e ring

Amreli Steel Ltd ASTL 62.00 - 8.8 - 9.2 - 25.8 - 31.7 - 33.1 99.52 54.40

Fe rtilize rs

Dawood Hercules DAWH 109.98 2.3 - 2.7 - 17.3 - 7.0 - 1.7 137.58 95.31

Engro Fertilizers Ltd. EFERT 81.77 8.0 0.0 12.2 51.7 20.7 82.36 60.98

Engro Chemical ENGRO 330.09 5.1 - 0.5 4.7 12.0 20.1 350.22 253.43

Fatima Fertilizer FATIMA 36.57 - 3.4 6.8 11.7 19.9 18.4 37.93 26.83

Fauji Fert. Bin Qasim Ltd. FFBL 37.82 1.5 1.0 - 10.2 8.5 6.4 44.81 31.03

Fauji Fertilizer Company FFC 99.52 2.1 - 0.9 4.3 18.6 25.8 103.68 73.73

Food Produc e rs

Engro Foods Limited EFOODS 93.94 10.1 2.3 - 6.6 4.4 17.0 105.73 70.19

Ca ble & Ele c tric a l Goods

Pak Elektron Limited PAEL 31.20 - 0.4 - 14.7 - 30.1 - 53.9 - 34.3 67.64 21.96

Oil & Ga s

Oil & Gas Development Co. OGDC 157.74 3.6 4.8 - 5.5 5.8 - 3.1 177.31 143.64

Pak Oilfields POL 554.82 1.7 - 16.3 - 17.8 - 5.9 - 6.6 707.34 519.56

Pakistan Petroleum Ltd. PPL 189.19 - 11.8 - 11.1 - 11.8 6.0 - 8.1 222.96 170.68

Pakistan State Oil PSO 264.99 - 18.0 - 15.5 - 21.4 - 26.4 - 9.6 360.21 213.74

Attock Petroleum Ltd. APL 475.49 5.8 - 14.3 - 25.1 - 22.1 - 9.1 639.36 413.75

Hascol Petroleum HASCOL 288.70 7.8 - 8.3 - 8.8 4.2 16.9 322.42 211.63

Powe r

Hub Power Co. HUBC 87.24 - 1.6 - 4.7 - 14.5 - 19.2 - 4.1 108.00 80.36

K- Electric Limited KEL 5.99 12.4 7.9 - 11.3 0.3 - 5.1 7.11 4.77

Kot Addu Power Company KAPCO 53.98 - 4.8 - 1.3 - 10.0 - 19.4 0.1 67.53 46.79

Pe rsona l Goods

Nisaht (Chunian) Ltd. NCL 54.88 5.5 7.6 2.9 - 3.7 19.9 57.01 43.70

Nishat Mills NML 144.10 1.8 4.7 - 8.4 5.9 - 3.6 171.56 124.04

Ba nks

Allied Bank Limited ABL 101.96 1.4 - 6.3 0.5 20.7 20.0 109.95 76.72

Bank AlFalah BAFL 50.08 1.2 - 12.9 - 5.4 20.2 17.8 58.94 38.15

Habib Bank Limited HBL 131.78 - 10.3 - 23.5 - 32.8 - 22.8 - 21.1 218.99 125.10

MCB Bank Limited MCB 191.41 - 4.3 - 10.0 - 9.5 - 10.7 - 9.8 236.56 177.16

National Bank of Pakistan NBP 48.79 - 4.7 - 1.6 - 1.4 3.7 0.5 53.78 43.01

United Bank Ltd UBL 144.04 - 6.9 - 20.7 - 26.9 - 24.2 - 23.4 215.16 133.03

Absolute Pe rforma nc e (%)

9

AKD Securities Limited

26 October 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

Haris Imtiaz +92 111 253 111 (685) haris.imtiaz@akdsecurities.net Economy

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

M.Daniyal Kanani +92 111 253 111 (602) daniyal.kanani@akdsecurities.net Oil & Gas & Power

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

26 October 2018