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  • جو شخص بہانہ بنانے میں بہت اچھا ہو ، وہ کسی اور کام میں اچھا نہیں ہو سکتا
  • پیسہ بدترین آقا ہے، مگر بہترین غلام بھی ہے
  • کسی فرد یا قوم کو برباد کرنا ہے تو اس کی امید کو مار ڈالیے اور اگر اسے تعمیر کرنا ہے اس کی امید کا دیا روشن کیجئے
  • کامیابی سوچ سے ملتی ہے
  • زندگی کی دوڑ میں دوسروں سے آگے نکلنے کیلئے تیز چلنا ضروری نہیں، بلکہ ہر رکاوٹ کے باوجود چلتے رہنا اور مسلسل چلتے رہنا ضروری ہے
  • جب باتیں آمنے سامنے ہوتی ہیں تو جھوٹ اور غلط فہممی کا خاتمہ ہو جاتا ھے
  • بہت اونچے پہاڑ پر چڑھنے کے لئیے قدم آہستہ آہستہ اٹھانا پڑتے ہیں
  • تین چیزیں نیکی کی بنیاد ہیں، تواضع بے توقع, سخاوت بے منت اور خدمت بے طلبِ مکافات
  • غربت اور افلاس کی وجہ پیداوار کی کمی نہیں، بلکہ اسکی غلط تقسیم ہے
  • دولت ہونے سے آدمی اپنے آپ کو بھول جاتا ہے اور دولت نہ ہونے سے لوگ اس کو بھول جاتے ہیں
  • مصروف زندگی نماز کو مشکل بنا دیتی ہے , لیکن نماز مصروف زندگی کو بھی آسان بنا دیتی ہے
  • گناہ کو پھیلانے کا ذریعہ بھی مت بنو, کیونکہ ہوسکتا ہے آپ تو توبہ کرلو, لیکن جس کو آپ نے گناہ پر لگایا ہے وہ آپ کی آخرت کی تباہی کا سبب بن جائے
  • اپنی زندگی میں ہر کسی کو اہمیت دو, جو اچھا ہوگا وہ خوشی دے گا اور جو برا ہوگا وہ سبق دے گا
  • درخت جتنا اونچا ہو گا اس کا سایہ اتنا ہی چھوٹا ہو گا, اس لیے اونچا بننے کی بجائے بڑا بننے کی کوشش کرو
  • جو شخص کوشش اور عمل میں کوتاہی کرتا ہے, پیچھے رہنا اس کا مقدر ہے
  • جو لوگ میانہ روی اختیار کرتے ہیں, کسی کے محتاج نہیں ہوتے
  • حقیقی بڑا تو وہ ہے جو اپنے ہر چھوٹے کو پہچانتا ہوں اور اس کی ضروریات کا خیال رکھتا ہو

xResearch

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22 FEBRUARY 2018


  • KSE100 had a surprise turn of event since last evening, when the news regarding Nawaz Sharif’s position as Party Chief broke and investors across the board took the news as negative. Market was anticipated to go down, which it did early in the session amidst low volumes. However, buying interest from investors saw a major recovery of ~1200pts from negative 535pts to positive 709pts that result in several stocks trading at upper circuits, contrary to the trading activity taking place earlier in the day. POL was one scrip which stood out from the beginning on the back of updation of their balance recoverable reserves as notified in PPIS records.
  • The Index closed at 43,528pts as against 42,920pts yesterday, showing an increase of 609pts (+1.4% DoD). Sectors contributing to this performance includeCommercial Banks (+153pts), E&P (+151pts), Fertilizer (+120pts), Cement (+54pts) and Power (+26pts).
  • Volumes increased from yesterday’s 188mn shares to 190.6mn shares today (+1.3% DoD). Average traded value also increased by 6.6% to reach US$ 81.8 mn fromUS$ 76.7 mn.
  • Stocks that contributed significantly to the volumes include DSL, ANL, LOTCHEM, FFL and MFL reflecting 32% of total volumes.
  • Scripts that contributed positively include HBL (+100pts), ENGRO (+81pts), POL (+64pts), PPL (+56pts) and UBL (+54pts). Stocks that contributed negatively include MUREB (-10pts), PSO (-7pts), HMB (-5pts), EFUG (-4pts) and ABL (-4pts).
 

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22 FEBRUARY 2018


Daily Closing: KSE-100 skyrocketed 608.73 points as China, Turkey and Saudi Arabia took a strong stance in favor of Pakistan
  • Initially bourse plunged 526points as the market took an impact of Nawaz Sharif's decision of disqualification as the party head. However, market soon took a U-turn as Pakistan got the helping hand from its allies against FATF decision causing index to skyrocket up and closed at 43,528.51points with a gain of 608.73 points. The top scrips which contributed for pulling up the market were HBL (+PKR 6.56), ENGRO (+PKR 13.47), POL (+PKR 28.32), PPL (+PKR 5.56) and UBL (+PKR 5.34) cumulatively adding 354.19 points to the index.
  • Sectorwise, banking remained in the limelight as UBL clarified its position regarding rumors of financial charges being charged against it. Amongst some of the scrips UBL/HBL/MCB/NBP gained PKR 5.34/6.56/0.19/0.52 in its share price. Furthermore, E&P's also outshined the market as PPIS released reserves data where reserves of POL doubled post inclusion of Jhandial in its production fields. Following this, POL gained PKR 28.32 in its share value followed by MARI (+PKR 21.99), PPL (+PKR 5.56) and OGDC
    (+PKR 1.64). MARI performed well due to the company announcing a dividend of
    PKR 3.5 per share.
  • Scripwise, MUREB closed at its lowerlock as shareholders did not approve increment of authorized share capital for 1500% bonus issue. MTL gained PKR 45.03 as the board decided to invest 18% in Hyundai Nishat Motor. Futhermore, MTL also announced its result where EPS clocked in at PKR 36.39 showing an increase of 38% QoQ.
  • The broader market witnessed a trading activity with volumes of 190.64mn shares as compared to previous session which was 188.06mn shares, increasing by 1.37% DoD with a value of PKR 9.0bn, up by 5.8% DoD. The advance to decline ratio of remained in the favor of the bulls. A total of 346 companies changed hands where 208 advanced, 123 declined and 15 remained unchanged.
  • On the sector front, engineering remained as the top traded sector with volumes of 27mn shares, followed by cement (20.61mn), chemical (18.40mn), textile composite (17.49mn) and food and personal care products (16.54mn).
News & Corporate Announcements:
  • Merit Packaging Ltd disclosed its financial results for the half year ended Dec'17 showing an EPS of PKR 0.17 as against an EPS of PKR 0.07 SPLY, increase by 142x% YoY. The surge in earning in current quarter is because company received a tax rebate of 6mn (per share impact of PKR 0.07 out of total EPS of PKR 0.079) and profit before taxation was down by 83% to stand at PKR 0.4mn as against PKR 2.3mn in SPLY.
  • Bestway Cement posted its half yearly results for Dec'17 showing an EPS of PKR 10.39 for 1HYFY18 as against EPS of PKR 11.92 SPLY, down by 13% YoY.
  • MTL posted results for the half year ended Dec'17 showing an EPS of PKR 62.73 as against an EPS of 35.66 SPLY, increased by 76% YoY. Company also paid a DPS of PKR 60/share.
  • MTL notified PSX that in a meeting ,today, board decided to invest 18% (i.e. PKR 1.530 billion) in equity of Hyundai Nishat Motor by acquiring fully paid 153 million ordinary shares of PKR 10/ each to enter in
    agreements with joint venture partners with regard to equity investment in Hyundai Nishat Motors. Hyundai Nishat is setting up a green field project for assembly and sale of Hyundai passenger and 1-ton range commercial vehicles.
  • Al-Shaheer Corporation posted its half year financial result for Dec'17 showing an LPS of PKR 0.24 as against EPS of PKR 0.25 SPLY, down by 4% YoY. The result for 2QFY18 showed an LPS of PKR 0.12 as against an LPS of PKR 0.12, as company is working on its break even.
  • MARI announced its financial results for 2QFY18, where EPS of the company clocked in at PKR 29.05, up by 73% YoY. Earnings fell by 12% QoQ from PKR 32.9 per share (1QFY18). Finance cost of the company increased by 51% YoY to PKR 313mn. Moreover, company declared interim dividend of PKR 3.5 per share. Effective tax rate during the quarter was 19%.
  • OLPL disclosed its financial results for the half year ended Dec'17 posting an EPS of PKR 2.93 as against an EPS of PKR 4.58 SPLY, down by 36% YoY. The EPS of 2QFY18 stands at PKR 1.57 as against an EPS of PKR 1.54 in 1QFY18, increased by 1.94%.
  • MUREB notified PSX that their dispute with its shareholders Kingsway Fund stands resolved.
  • In a notice released by Pakistan Petroleum Limited (PPL) on the local bourse, the company has provided an update on the windfall levy case on TAL block fields, indicating that the court has granted a status quo thus allowing plaintiffs to maintain their position. As per our understanding and discussion with industry sources, the court has granted a stay on their petition where the parties should follow the supplemental agreements signed under PP12. Furthermore, the company updated that the matter is pending in court of law where the court has directed the respondents i.e., Petroleum Division (Ministry of Energy) to submit their report and para-wise comments before the next hearing which is adjourned till March 15, 2018.
  • ATBA disclosed its financial results for the half year ended Dec'17 showing an EPS of PKR 15.21 as against an EPS of PKR 41.91 SPLY, decreased by 64% YoY.
  • SAPT disclosed its financial results for the half year ended Dec'17 showing an EPS of PKR 35.81 as against an EPS of PKR 81.02 SPLY, decreased by 56% YoY. The EPS in 2QFY18 stands at PKR 11.39 as against EPS of PKR 24.42 in 1QFY18.
 

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23 FEBRUARY 2018


Bears dominate the scene
Market Commentary


KSE- 100 this week shed 360pts (-0.8%) WoW from 43,627pts to 43,267pts. During the week there was uncertainty amongst investors regarding Pakistan potentially being added to the terrorist financing watch list of the Financial Action Task Force (FATF). Later in the week, the Supreme Court disqualified Nawaz Sharif from leading the party which added to the prevailing political uncertainty. However, the market was able to hold its ground and recovered 1,200pts intraday. This was majorly led by POL closing on its upper cap level, since a significant increase in its reserves according to the latest PPIS Oil and Gas reserves data led to euphoria at the index. Meanwhile, on the last day of trading, stampede at the index was observed amid unconfirmed news that Pakistan was added to the terror financing list. The market went down by -514pts DoD. That said, announcement of financial results of scrips such as INDU, KAPCO and NML prevented the market from losing more points, closing it at -261pts DoD.

Sectors that faced downward pressure include i) Commercial Banks (-200pts) on account of UBL falling victim to selling due to contingencies disclosed in its annual report regarding pensions expense and its written agreement of 2013 regarding AML compliance , ii) Cements (-50pts), and iii) OMCs (-43pts). Whereas, positive contribution came from Oil & Gas Exploration (78pts) and Food & Personal Care Products (20pts).

Stocks that negatively contributed to the index this week were UBL (-68pts), MCB (-43pts), OGDC (-43pts) and FCCL (-27pts). On the flip side, stocks that remained positive include POL (127pts), LUCK (39pts) and NESTLE (23pts).

That said, major foreign selling was witnessed in Commercial Banks (USD 3.9mn), Fertilizers (USD 3.9mn) and Technology and Communication (USD 0.2mn). On the domestic front, buying was reported by Insurance Companies (USD 14.5mn), Other Organizations (USD 8.0mn) and Companies (USD3.6 mn) while Individuals and Mutual Funds Offloaded USD 9.0mn and USD 6.0mn, respectively. Volumes settled at 184mn shares (down by 7.5% WoW) while value traded clocked in at USD 73mn (down by 10 % WoW).

Other major news: i) Government to retain 51% PIA shares, ii) Customs value of pipes and pipe fittings revised, iii) ADB shows interest in co-financing, iv) All oil-fired power plants to be shut down by 2019-20 according to State Minister Water and Power, v) NEPRA slashes power tariff by PKR 3.34 per unit, and vi) Import bill surges due to oil price spike.

Outlook and Recommendation

The market will imitate the decision taken by FATF, which is expected later today. If the decision is in favor of the country then it could lead the index to turn green. While any adverse verdict may lead the equities to bear losses. While volatility in international oil prices on the commodity front may dictate E&P scrips. Our top picks are OGDC, ABL, PSO, DGKC, ASTL, HCAR, EPCL, EFERT, KAPCO, HUBC, POL and PSMC. The KSE-100 index is currently trading at a cheaper PER of 9.3x (2018) compared to Asia Pac regional average of 13.8x and while offering DY of ~5.0% versus ~2.5% offered by the region.
 

xResearch

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26 FEBRUARY 2018


  • KSE100 index had a relatively dull session, with investor interest weaning due to host of negative news on macro-economic drivers and political uncertainty. Bearish sentiments kept the investors at bay and little activity was seen in blue chip scrips. PAEL carried on with the news of debarment by World Bank to participate in tendering for the next 33 months that is likely to affect its forward earnings. Interest in trades was seen at tomorrow’s floor price, however, the trades failed to materialize due to non-interest. ISL was seen as one prized asset among the blue chips that saw decent volumes and price spike. Besides, the news of IBEX going for IPO with intention to list on NASDAQ triggered TRG to trade at upper circuit and ranked 5th among total volume leaders.
  • The Index closed at 42,911pts as against 43,267pts on Friday, showing a decline of 356pts (-0.8% DoD). Sectors contributing to this decline include Commercial Banks (-100pts), E&P (-97pts), Cement (-45pts), OGMCs (-44pts) and Textile (-31pts).
  • Volumes declined again to 167.6 mn shares as compared to 244.5 mn shares on Friday (-31% DoD). Average traded value also declined by 29% DoD to reach US$ 64.9 mn as against US$ 91.1 mn.
  • Stocks that contributed significantly to the volumes include DSL, ANL, FFL, BAFL and TRG reflecting 39% of total volumes.
  • Scripts that contributed positively include PAKT (+25pts), TRG (+17pts), INIIL (+14pts), DAWH (+10pts) and EFERT (+7pts). Stocks that contributed negatively include PPL (-45pts), HBL (-43pts), OGDC (-32pts), ENGRO (-32pts) and LUCK (-28pts).
 

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27 FEBRUARY 2018


  • Market had a slow start today, which changed after news of DGKC flashed on Bloomberg, implying that it will likely book PKR 2.9bn as tax credit in 4QFY18. This changed the mood of the investors and majority of cement sector scrips went green after that with the exception of LUCK. PAEL came out of the woods today, where early part of the day saw investors showing no interest on trading the stock at tomorrow’s lower circuit were seen buying in significant volumes and the stock which had a meagre volume of below 300k at the beginning was seen crossing 14mn by day end. During the day, the market went from ~300pts negative to ~+100pts positive at market close and investors’ interest improved significantly.
  • Top volume leaders for today were PAEL, TRG, AGL, DSL and FF, contributing 33% to the total volume.
  • The market volume decreased by 14% DoD from 168mn to 145mn. Whereas, traded value decreased by 5% DoD to USD 61.
  • Sector-wise positive contribution came from Cement (+34pts), E&Ps (+31pts), Tobacco (+26pts), Commercial Banks (+19pts) and Power Generation & Distribution (+11pts).
  • Scrip-wise positive contributors were MCB (+34pts), HBL (+30pts), PAKT (+26pts), PPL (+24pts) and DGKC (+22pts). Scrips such as UBL (-37pts), DAWH (-16pts), MUREB (-9pts), NATF (-9pts) and NBP (-8pts) kept the index under stress.
 

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1 MARCH 2018


  • KSE100 index performed well in line with expectation and traded in green zone throughout the day. What energized the trading session was fast paced trading at upper circuit of majority Cement stocks, which were fueled by the news of higher Cement price / bag in the North zone. The effect was further accentuated with the expectation of further increases in Cement price / bag in the near future. Yesterday’s rebalancing of FTSE (which will take effect March 19th) and MSCI was followed by Foreigner’s selling in blue chip stocks. Selling pressure was observed in large cap banks like HBL and UBL. Healthy activity was also observed in ENGRO and PKGS, which is expected to be from the Companies. Power sector also saw positive flows on the back of expectation of resolution of Circular debt and that the Government will be issuing fixed income instruments to settle such claims.
  • The Index closed at 43,510pts as against 43,239pts yesterday, showing an increase of 271pts (+0.6% DoD). Sectors contributing to this increase include Cement (+176pts), Fertilizer (+53pts), OGMCs (+34pts) and Power (+28pts).
  • Volumes increased significantly by 40% DoD from 151mn shares to 212mn shares. Average traded value increased by 45% DoD from US$ 64.4mn to US$ 93mn.
  • Stocks that contributed significantly to the volumes include LOTCHEM, DGKC, ASL, FCCL and ANL reflecting 24% of total volumes.
  • Scripts that contributed positively include LUCK (+81pts), ENGRO (+44pts), DGKC (+26pts), FCCL (+20pts) and MLCF (+19pts). Stocks that contributed negatively include PAKT (-28pts), MARI (-15pts), PPL (-13pts), POL (-12pts) and THALL (-9pts).
 

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1 MARCH 2018


Daily Closing: Bourse maintained its positive rally for the 3rd consecutive day gaining 270ppts

  • Extending the rally seen since Tuesday, bourse moved sharply higher over the course of the trading session on Thursday. With the continued strength on the day, the benchmark index surged 270ppts settling at 43,510ppts. The decrease in inflation numbers, ahead of IMF’s meeting to discuss Pakistan’s post program monitoring (PPM) report on 5th March, contributed to the positive momentum in index. The rally in the bourse could also be due to easing of political uncertainty as investors look ahead to senate elections that are to be held on 3rd of March. Index found the support and resistance at 43,176 and 43,634ppts respectively. Heavy weight scrips responsible for pulling the index upwards were LUCK (+PKR 30.03 ), ENGRO (+PKR 7.4), DGKC (+PKR 5.8), FCCL (+PKR 1.24) and MLCF (+PKR 3.37), cumulatively adding ~189ppts to the index.
  • Sectorwise, cements remained in the limelight throughout the day as North cement players increased prices by PKR 10 per bag and further expect to increase prices by PKR 10-20/bag. Resultantly, LUCK surged by PKR 30.03 in its share value followed by CHCC (+PKR 6.31), DGKC (+PKR 5.80), MLCF (+PKR 3.37) and PIOC (+PKR 3.26). Additionally, OMCs also closed in the green zone following increase in prices of petrol and high speed diesel by PKR 3.56 and PKR 2.62 where SHEL/HASCOL/PSO/BYCO gained PKR 9.55/4.93/1.52/0.10 respectively. Most banking scrips remained in the green zone owing to Moody’s report on the stable outlook of the banking sector due to which HMB/BAFL/ABL/BOK/BAHL gained PKR 1.06/0.60/0.59/0.55/0.50 respectively.
  • The ready market witnessed a trading activity with volumes of 211mn shares as compared to previous session volumes of 151mn shares, increasing by 39% DoD. Trading value was PKR 10.3bn, up by 45% DoD. The advance to decline ratio remained in the favor of bulls. A total of 367 companies changed hands where 219 advanced, 124 declined and 24 remain unchanged.
  • On the sector front, cement outshined as the top traded sector with volumes of 39.16mn shares, followed by chemical (37.74mn), engineering (18.42mn), commercial bank (12.84mn) and textile composite (11.06mn).
News & Corporate Announcements:
  • TSPL posted its half yearly financial results for the Dec’17 showing an EPS of PKR 0.39 as against PKR 0.38 in 1HYFY17, increased by 2.88% YoY. However; EPS for 2QFY18 clocked in at PKR 00.32 as against PKR 0.073 in 1QFY18, increased by 338x QoQ.
  • DNCC posted its half yearly financial results for the Dec’17 showing an LPS of PKR 3.38 as against PKR 1.16 in 1HYFY17, increased by 191x YoY. However; EPS for 2QFY18 clocked in at PKR 2.22 as against PKR 1.66 in 1QFY18, increased by 91.3% QoQ.
  • TRG posted its half yearly financial results for the Dec’17 showing an EPS of PKR 0.03 as against PKR 0.02 in 1HYFY17, increased by 50% YoY. However; EPS for 2QFY18 clocked in at PKR 0.01 as against PKR 0.02 in 1QFY18, increased by 50% QoQ.
  • GAMON posted its half yearly financial results for the Dec’17 showing an EPS of PKR 0.30 as against PKR 0.16 in 1HYFY17, increased by 87.5% YoY. However; EPS for 2QFY18 clocked in at PKR 0.17 as against PKR 0.13 in 1QFY18, increased by 30% QoQ.
  • KHTC posted its half yearly financial results for the Dec’17 showing an EPS of PKR 38.60 as against PKR 16.47 in 1HYFY17, increased by 135x YoY. However; EPS for 2QFY18 clocked in at PKR 23.18 as against PKR 61.67 in 1QFY18, decreased by 62% QoQ.
  • KOSM posted its half yearly financial results for the Dec’17 showing an EPS of PKR 0.80 as against PKR 2.05 in 1HYFY17, decreased by 60% YoY. However; EPS for 2QFY18 clocked in at PKR 0.56 as against PKR 0.41 in 1QFY18, increased by 36% QoQ.
  • HIRAT posted its half yearly financial results for the Dec’17 showing an EPS of PKR 1.83 as against PKR 0.18 in 1HYFY17. However; EPS for 2QFY18 clocked in at PKR 1.98 as against PKR 0.15 in 1QFY18.
  • UNITY posted its half yearly financial results for the Dec’17 showing an LPS of PKR 1.25 as against PKR 0.18 in 1HYFY17. However; LPS for 2QFY18 clocked in at PKR 0.59 as against PKR 0.66 in 1QFY18.
  • Trading in the shares of AGP will start from 5th March, lot will be of 500 shares with an opening Price of PKR 80.
  • In accordance with the approval of SBP and SECP 150mn un-listed, convertible, irredeemable, non-cumulative pref shares of JS Bank have been converted into 225mn ordinary shares.
  • DAWH has received financing in the form of Rated, OTC listed and Secured Sukuk amounting to PKR 6bn for a period of 5 years. The sukuk has been arranged by JS Bank Ltd as the exclusive advisor and arranger of the issue. Funds from the sukuk will be utilized in repayment of existing short-term and remaining proceeds of the company.
Thanks & Regards
 

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2 MARCH 2018


Day End Remarks: KSE-100 plunges 230 points as investors remain positive amid senate election, settling at 43,734 points
  • Maintaining the positive composure, Pakistan equities plunged 224.32 points as investors showed an immense interest in the discounted stocks and completed its 4th consecutive positive spell. The intra-day resistance and support level were marked to be 43,759 and 43,412 points respectively. The scrips responsible for pulling the market up were LUCK (35.49 points), HBL (29.71 points), NESTLE (28.02 points), OGDC (23.18 points) and FCCL (20.65 points). Broader market witnessed a trading activity with a volume of 229mn shares against volume of 211mn share in previous day, while value clocked in at PKR 9.6bn, down by 6.79% DoD. Out of 416 scrips, 191 closed in green, 207 in red and 17 remained intact. DSL dominated today’s trading session with turnover of 19.07mn shares followed by TRG (15.14mn), BYCO (13.30mn), ASL (12.10mn) and PAEL (11.17mn). On sector front, Engineering outshined as top traded sector with turnover of 37.34mn shares, Chemical (28.09mn), Cement (25.85mn), Technology & Communication (21.90mn) and Food and Personal Care Products (15.81mn).
Weekly Review: Bulls return to PSX, pull bourse up by 473 points.
  • Bulls returned after a roller coaster ride in the previous week as political uncertainty settled over senate elections to be held on 3rd of March. Bourse marked resistance and support level at 42,606.88 and 43,757.38 points. KSE100 in all, witnessed one bearish session at the start of the week and rest bullish, managing to close with a gain of 473 points at the level of 43,740.49.
  • Sector wise, engineering stocks tumbled as fear of global trade war instigated the investors after Donald Trump’s announcement regarding imposition of tariffs on steel and aluminum imports. Following the news, ASTL lost PKR 0.89 along with ISL (PKR 0.74), ASL (PKR 0.57) and DSL (PKR 0.31) on the last day of the week. Banks also remained under pressure throughout the week as inflation declined MoM; UBL lost PKR 7.63 (-4%) in its value followed by HBL (PKR 2.75/1%), MCB (PKR 1.06/0.5%) and BAFL (PKR 0.63/1%). On the flipside, cements remained in the limelight throughout the week as North cement players increased prices by PKR 10 per bag and further expect to increase prices by PKR 10-20/bag. Resultantly, LUCK surged by PKR 35.05 in its share value followed by CHCC (+PKR 14.04), DGKC (+PKR 12.74), MLCF (+PKR 8.41) and PIOC (+PKR 7.98). OMCs showed mixed sentiments throughout, bullish sentiments dominated and SHEL/HASCOL/PSO/BYCO gained PKR 12.88/5.67/7.3/0.71 respectively as soon as the prices of petrol and high speed diesel increased by PKR 3.56 and PKR 2.62 However, at the last day of the week scrips except HASCOL closed red as the sales numbers was published by OCAC.
  • Important news during the week were 1) notification by TRG to PSX announcing filing of a registration statement with US Securities Exchange Commission for an IPO of shares of IBEX Holding, 2) NATF’s notification to PSX that they will start their commercial operations from 28th feb’18, 3) Siemens Pakistan Engineering’s notifications to PSX that they are winding up their company, 4) Mughal’s notification that company is increasing its melting capacity by 396k MTs at a cost of PKR 500mn and 5) DAWH has received financing in the form of Rated, OTC listed and Secured Sukuk amounting to PKR 6bn for a period of 5 years.
  • Among market participants’ foreigners remained net seller during the week amounting to USD 11.38mn, primarily dragged by corporates amounting to USD 13mn. Whereas local investors remained net buyer amounting to USD 11.38mn, mainly contributed by companies (USD 11.74mn), insurance (USD 6.01n) and mutual funds (USD 1.32mn). While banks and others remained net seller with amount of USD 3.36/2.07mn respectively.
 

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2 MARCH 2018


Knocking Out Bears
Market Commentary

With bearish trend overdrawn previously as the market witnessed four consecutive weeks of decline, the index managed to close in green. Bears lost control this week while bulls took charge to pull the benchmark equity bourse to 43,740pts, up by 473pts WoW or 1.09%. In particular, the Cement sector (contributing +347pts) helped the index remain positive during the week owing to a likely PKR 10/bag price hike by domestic cement manufacturers in the North region and further expectations of a price increase in a phased manner. Moreover, government showed intentions to clear circular debt issue which improved investor’s interest in Power and Oil Marketing Sector.

Top five best performing sectors during the week were i) Cements (347pts), ii) Fertilizers (122pts) due to foreign accumulation worth of USD 4mn, iii) Power Generation and Distribution (43pts), iv) Automobile Assemblers (40pts), and v) Oil and Gas Marketing Companies (34pts). Scrip wise major gainers were LUCK (116pts), DGKC (65pts), FFC (53pts), MLCF (52pts) and ENGRO (48pts). While, sectors that contributed negatively to the index were i) Commercial Banks (106pts) due to foreign selling witnessed in blue chip stocks, ii) Oil and Gas Exploration Companies (31pts), and iii) Cable and Electrical Goods (27pts).

Meanwhile, foreigners offloaded stocks worth of USD 11.4mn compared to a net sell of USD 2.8mn last week. Major foreign selling was witnessed in Power Generation & Distribution (USD 16.4mn) owed to deal of HUBC's 20.4mn shares at PKR 96.5/share on the last day of trading. While on the local front, major buying was reported by Companies (USD 11.7mn) and Insurance companies (USD 6.0mn). Average daily volumes for the outgoing week recorded a meagre decline of 1% to 181mn shares whereas value increased by 1% to USD 74mn.

Other major news: i) Consumer inflation recorded 3-month low at 3.8pc in Feb'18, ii) Energy sector circular debt touches record PKR 922bn, iii) Dewan Group partners with South Korean automaker to re-launch Shehzore, iv) Reserves slip to USD 18.41bn, v) Outlook on Pakistan banks stable: Moody’s, and vi) PAEL, Kohinoor debarred from WB-funded project.

Outlook and Recommendation
We view the market to remain positive in the near term while foreign inflows can also positively influence investors’ sentiment. Additionally, successful completion of senate elections (Saturday, 3rd Mar’18) and expected announcement of amnesty scheme should bode well for the market in short to mid-term. Likewise, cement sector is expected to grab attention amid robust dispatches and anticipation of cement price reversal in the North region. In the longer run, we continue to re-iterate our robust outlook supported by expected GDP growth of 5.5% in FY18E and CPI for FY18 at 4.6%. The KSE-100 index is currently trading at PER of 9.5x (2018) compared to Asia Pac regional average of 13.6x and while offering DY of ~5.0% versus ~2.5% offered by the region. Our top picks are OGDC, PPL, ABL, LUCK, DGKC, MLCF, PSMC, HCAR, EFERT, KAPCO, and HUBC.
 

xResearch

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2 MARCH 2018


  • The bourse is seeing an uptrend in both volumes and index points, though the investors seem confused with the divergence of fundamentals. Steel sector showed healthy volumes amidst negative price performance due to the news of Trump imposing tariff on Steel and Aluminum, next week. Selling pressure in PAEL seems to have subsided and investors are again taking interest in building positions. BYCO which scored well on fundamentals saw significant selling pressure at the end of session, which went against investors’ expectations. It is anticipated to recover in the coming week. Despite selling pressure in HBL & UBL, the market was positive, due to positive sentiments in Cement, Fertilizer and Auto sectors. End of session saw positive price movements in Banks as well, which helped the index close above +200pts.
  • The Index closed at 43,740pts as against 43,510pts, showing an upside of 230pts (+0.5% DoD). Sectors contributing to today’s activity include Cement (+125pts), Fertilizer (+38pts) and Commercial Banks (+35pts).
  • Volumes increased further to reach 229.6mn shares as against 211.9mn shares yesterday (+8% DoD). Average traded value declined by 7% DoD to reach US$ 86.8mn as against US$ 93mn.
  • Stocks that contributed significantly to the volumes include DSL, TRG, BYCO, ASL and PAEL reflecting 31% of total volumes.
  • Scripts that contributed positively include LUCK (+36pts), HBL (+28pts), NESTLE (+28pts), OGDC (+21pts) and FCCL (+21pts). Stocks that contributed negatively include PAEL (-12pts), COLG (-10pts), POL (-9pts), MCB (-8pts) and MARI (-7pts).
 

xResearch

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2 MARCH 2018


Market Strategy Equities
KSE-100 in Feb’18: End of Power Play


Feb’18: KSE-100 index sheds 810pts MoM

During Feb’18 the equity market observed a drop of 810 points, portraying a negative return of 1.8% MoM compared to a positive return of 8.8% recorded in Jan’18. This took CY18TD / FY18TD return to 6.8% / -7.1%. Major reason for negative performance of the bourse was Pakistan’s scheduled inclusion in the FATF’s grey list from Jun’18. Moreover, ongoing political disruption also effected market performance as the Supreme Court dismissed ex-Premier Nawaz Sharif from the post of his party leadership.

During the outgoing month, market activity commenced on a negative sentiment and further turned bearish as int’l markets witnessed a significant drop during mid Feb’18. Additionally, uncertainty persisted amid news of US potentially adding Pakistan's name to the watch list which caused panic amongst locals and foreign investors. Albeit, Supreme Court’s judgment regarding the banking sector led a sigh of relief as the pressure building over the pension liability case finally died down. Further interest was seen in E&Ps as PPIS released Dec’18 2P reserve data in which POL remained the major outperformer (its Jhandial well took the overall reserve size up massively).

On the economic front, Current Account Deficit (CAD) increased by 28.7% MoM, settling at USD 1,617mn in the month of Jan’18. During the month, surge in Current Account Deficit was witnessed due to 4.9% MoM decline in Remittances to USD 1.64bn. Imports grew by 13.2% MoM to USD 4.87bn whereas a meager growth was observed in exports (+ 4.8% MoM) to USD 2.11bn curbing Current Account Deficit. During 7MFY18, CAD registered a growth of 48.1% to USD 9.16bn. The rise in deficit was driven by higher imports (up by 18% YoY, USD 31.04bn). While exports increased by 11.8% YoY to USD 13.91bn.

Other events that occurred during the month include Hascol reaching settlement with Mena Energy, Dawood Hercules accepting offer for HUBCO stake sale, removal of regulatory duty from over 350 goods by court, govt set to present budget 2018-19 on May 12, rice exports crossing USD 1bn mark in seven months, import of three-year used cars allowed, government all set to unveil package to lift exports and all oil-fired power plants expected to be shut down by 2019-20 according to State Minister Water and Power.

That said, average volumes during the month declined by 15% MoM to 204mn shares along with average daily valued traded at USD 75mn (down by 21% MoM). On the local front, Insurance / Other organizations remained the largest domestic accumulators with a net buy of USD 38 / 15mn, while mutual funds and banks remained sellers of USD 21mn and USD 8mn, respectively.

Foreign Connotations – Negative

On the foreign side, investors offloaded shares worth USD 32.1mn in the month of Feb’18 vs. a net buy of USD 85.7mn in Jan’18. Foreign selling was majorly concentrated in Commercial Banks (USD 21.4mn) amid uncertainty over the pension scheme case, E&Ps (USD 10.0mn) as international oil prices - Arab Light - dipped by 5% MoM, Fertilizer (USD 6.3mn) and Textile (USD 1.9mn). This was absorbed by Insurance companies who bought equities worth a massive USD 38.15mn in Feb’18 (taking exposure in Commercial Banks and E&Ps). That said, a similar trend was witnessed across the region with a USD 10.0bn net sell observed in the Asia Pac economies. Pertinently, Taiwan and India were subject to the highest foreign offloading at USD 3.5bn and 2.6bn, respectively. Interestingly, only the Philippines attracted overseas attention with a small net buy of USD 0.1mn in Feb’18.

Sectoral Contribution

Dissecting sectoral performance disclosed that negative contribution to the index was led by the index heavy Cement sector (~8.7% weight; -329pts; -7.9% return) as the latest result season unveiled margin attrition in light of higher coal prices and lower retention prices in North. This was followed by OMCs (~5.5% weight; -94pts; -3.7% return) given PSO’s higher than expected inventory losses realized during the period. Meanwhile other heavy weights also displayed lackluster returns such as Fertilizer (~12.0% weight; -66pts; -.1.3% return) and Power Generation (~6.0% weight; -27pts; -1.0% return) as some companies (NPL and NCPL) skipped dividend. Albeit, Banks (~25.0% weight; +41pts; +0.3% return) and Oil & Gas Exploration Companies (~14.3% weight; +51pts; +0.8% return) provided some respite to the index.

Outlook & Recommendation

We view the market to remain positive in the near term while foreign inflows can also positively influence investors’ sentiment. Additionally, successful completion of senate elections (Saturday’ 3rd Mar’18) and expected announcement of amnesty scheme should bode well for the market in short to mid-term. Likewise, cement sector is expected to grab attention amid robust dispatches and anticipation of cement price reversal in the North region. In the longer run, we continue to re-iterate our robust outlook supported by expected GDP growth of 5.5% in FY18E and CPI for FY18 at 4.6%. The KSE-100 index is currently trading at PER of 9.3x (2018) compared to Asia Pac regional average of 14.4x and while offering DY of ~5.1% versus ~2.4% offered by the region. Our top picks are OGDC, PPL, ABL, LUCK, DGKC, MLCF, PSMC, HCAR, EFERT, KAPCO, and HUBC.

MR1.jpg MR2.jpg MR3.jpg
 

xResearch

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2 MARCH 2018


Market Review Equities
Knocking Out Bears


With bearish trend overdrawn previously as the market witnessed four consecutive weeks of decline, the index managed to close in green. Bears lost control this week while bulls took charge to pull the benchmark equity bourse to 43,740pts, up by 473pts WoW or 1.09%. In particular, the Cement sector (contributing +347pts) helped the index remain positive during the week owing to a likely PKR 10/bag price hike by domestic cement manufacturers in the North region and further expectations of a price increase in a phased manner. Moreover, government showed intentions to clear circular debt issue which improved investor’s interest in Power and Oil Marketing Sector.

Top five best performing sectors during the week were i) Cements (347pts), ii) Fertilizers (122pts) due to foreign accumulation worth of USD 4mn, iii) Power Generation and Distribution (43pts), iv) Automobile Assemblers (40pts), and v) Oil and Gas Marketing Companies (34pts). Scrip wise major gainers were LUCK (116pts), DGKC (65pts), FFC (53pts), MLCF (52pts) and ENGRO (48pts). While, sectors that contributed negatively to the index were i) Commercial Banks (106pts) due to foreign selling witnessed in blue chip stocks, ii) Oil and Gas Exploration Companies (31pts), and iii) Cable and Electrical Goods (27pts).

Meanwhile, foreigners offloaded stocks worth of USD 11.4mn compared to a net sell of USD 2.8mn last week. Major foreign selling was witnessed in Power Generation & Distribution (USD 16.4mn) owed to deal of HUBC's 20.4mn shares at PKR 96.5/share on the last day of trading. While on the local front, major buying was reported by Companies (USD 11.7mn) and Insurance companies (USD 6.0mn). Average daily volumes for the outgoing week recorded a meagre decline of 1% to 181mn shares whereas value increased by 1% to USD 74mn.

Other major news: i) Consumer inflation recorded 3-month low at 3.8pc in Feb'18, ii) Energy sector circular debt touches record PKR 922bn, iii) Dewan Group partners with South Korean automaker to re-launch Shehzore, iv) Reserves slip to USD 18.41bn, v) Outlook on Pakistan banks stable: Moody’s, and vi) PAEL, Kohinoor debarred from WB-funded project.

Outlook and Recommendation
We view the market to remain positive in the near term while foreign inflows can also positively influence investors’ sentiment. Additionally, successful completion of senate elections (Saturday, 3rd Mar’18) and expected announcement of amnesty scheme should bode well for the market in short to mid-term. Likewise, cement sector is expected to grab attention amid robust dispatches and anticipation of cement price reversal in the North region. In the longer run, we continue to re-iterate our robust outlook supported by expected GDP growth of 5.5% in FY18E and CPI for FY18 at 4.6%. The KSE-100 index is currently trading at PER of 9.5x (2018) compared to Asia Pacregional average of 13.6x and while offering DY of ~5.0% versus ~2.5% offered by the region. Our top picks are OGDC, PPL, ABL, LUCK, DGKC, MLCF, PSMC, HCAR, EFERT, KAPCO, and HUBC.
 

xResearch

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5 March 2018


Market Strategy Equities
KSE-100: Profitability portrays 9.6% YoY improvement during CY17


  • KSE-100 profitability recorded a 9.6% uptick YoY in CY17, driven primarily by Oil & Gas Exploration Companies (+53% YoY). While Automobile Assemblers (+36% YoY) and Oil & Gas Marketing Companies (+34% YoY) were also prominent contributors to the earnings surge.
  • We have adjusted one-timers and extra ordinary items to arrive at the change in core profitability of the sectors including gain on disposal of shares of EFERT, EFOODS and ABL recognized in the bottom-line of ENGRO and IBFL.
  • Sectors leading the profitability chart during CY17 are Textile Spinning (+889% YoY), Technology & Communication (+120.4% YoY) and Real Estate Investment Trust (+118.3% YoY).
  • During CY17, the KSE-100 index declined by 7,335 points majorly owed to by Cement (-2,356 points), Commercial Banks (-2,172 points) and Power Generation & Distribution (-850 points). On the other hand, E&P Companies positively contributed 596 points during the same period.
  • On a QoQ basis, the index depicted a 3.0% rise in profitability led essentially by Textile Composite (+291% QoQ), Leather and Tanneries (+214% QoQ) and Paper and Board (+194% QoQ).
  • During 4QCY17, the KSE-100 index declined by 1,938 points majorly contributed by Power Generation & Distribution (-531 points), Oil & Gas Marketing Companies (-519 points) and Cement (-401 points). On the other hand, E&P Companies positively contributed 754 points during the same period.
  • We have based our analysis on KSE-100 index companies. 84 companies have announced their results and have been included in this analysis while the remaining 16 companies have not yet disclosed their results. The companies which have been included in our analysis represent almost 83.6% of the market capitalization of the KSE-100 index.
 

xResearch

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5 March 2018


  • KSE100 index closed barely positive, but despite clean majority of PML (N) in Senate Elections, the market could not carry the positive sentiment. Early in the day, news of FATF blacklist circulated in the market that was floated by India Times. ASL and ISL saw selling pressure in early trade and the price couldn’t exceed LDCP. At the end of session, SSGC traded in large volume and soon hit upper circuit. Expectation of government approving incentives for SSGC led the activity. The Stock closed at upper circuit. Cement Sector retained interest of Investors and FCCL, DGKC and MLCF were traded in large volumes.
  • The Index closed at 43,829pts as against 43,740pts, showing an upside of 89pts (+0.2% DoD). Sectors contributing to this performance include Cement (+42pts), Commercial Banks (+27pts) and OGMCs (+26pts).
  • Volumes declined significantly from 229.9mn shares as against 137mn shares today (-40% DoD). Average traded value also declined by 39% from US$ 86.9mn to US$ 53.5mn.
  • Stocks that contributed significantly to the volumes include UNITY, WTL, AGL, FCCL and EPCL reflecting 31% of total volumes.
  • Scripts that contributed positively include HBL (+42pts), LUCK (+23pts), FCCL (+17pts), BAHL (+15pts) and PIBTL (+13pts). Stocks that contributed negatively include MCB (-14pts), UBL (-12pts), PPL (-12pts), ENGRO (-10pts) and MTL (-7pts).
 

xResearch

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6 March 2018


  • Driving force behind early market upsurge was an increase in Cement price / bag, which resulted in Cement sector rally. Majority cement sector stocks traded close to upper circuit, however, selling pressure in the middle and end of session eroded early gains. Besides Cement sector, healthy activity was observed in gas utilities on the back of possible recovery of UFG losses from Consumers. Although, price gain got eroded in later trades due to possibility of stay order from Supreme Court which could negate any possible improvement for the Sui companies. Lackluster activity was observed in blue chip stocks such as E&P and Banks.
  • The Index closed at 43,705pts as against 43,829pts yesterday, reflecting a decline of 124pts (-0.3% DoD). Sectors contributing to this performance includeCommercial Banks (-73pts), Fertilizer (-40pts), Textile (-16pts) and Cement (+20pts).
  • Volumes improved from 137mn shares to 177.5mn shares yesterday (+30% DoD). Average traded value also increased from US$ 53.5mn to US$ 72.8mn (+36% DoD).
  • Stocks that contributed significantly to the volumes include FCCL, UNITY, DSL, BYCO and NRSL reflecting 28% of total volumes.
  • Scripts that contributed positively include DGKC (+17pts), HCAR (+12pts), BAFL (+10pts), FCCL (+6pts) and BATA (+5pts). Stocks that contributed negatively include HBL (-52pts), ENGRO (-22pts), BAHL (-12pts), KTML (-12pts) and LUCK (-10pts).
 

xResearch

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7 March 2018


  • KSE100 took negative turn, caused by selling pressure in blue chips. Part of IMF’s concluding remarks, relating to macro-economic balance and ballooning CurrentAccount Deficit, were taken negative by the Investors causing selling pressure. Comparatively low volumes were seen traded in Cement Sector. DGKC, FCCL, MLCF showed low volumes and selling, despite increasing cement price / bag in North Zone. Throughout the day, volume was especially low in DGKC, however, in the end trade was seen building up. Similarly, LUCK saw accumulation at the end of session, when market started losing points at pace. Lackluster activity in blue chips is evident from 31% volume traded in KSE100 index as compared to total market volume.
  • The Index closed at 43,441pts as compared to 43,705pts, showing a decline of 264pts (-0.6% DoD). Sectors contributing to this performance include Cemnt (-80pts),Commercial Banks (-47pts), Fertilizer (-29pts) and Tobacco (-27pts).
  • Volumes declined today from 177.5mn shares yesterday to 142.4mn shares (-20% DoD). Average traded value also declined by 27% DoD from US$ 72.9mn to US$ 52.9mn.
  • Stocks that contributed significantly to the volumes include MFL, PIAA, UNITY, ANL and SSGC reflecting 28% of total volumes.
  • Scripts that contributed positively include UBL (+18pts), DAWH (+9pts), HUBC (+5pts), MTL (+4pts) and NML (+3pts). Stocks that contributed negatively include HBL (-43pts), PAKT (-27pts), LUCK (-27pts), ENGRO (-23pts) and MLCF (-18pts).
 

xResearch

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8 March 2018


  • KSE100 saw a dip of 500pts, courtesy of IMF economic outlook and concerns on fiscal stability. On top of it, news related to NAB opening cases against 52companies marred the sentiment in the market. Despite maintaining positive outlook, the Mutual Funds are reluctant in aggressive buying and only resorting to rebalancing their portfolios. Absence of foreign selling is a welcome respite for the market, in the presence of which the market could have seen serious bantering. Blue chip scrips such as DGKC, UBL, HBL, SSGC, SNGP and E&P companies saw selling pressure, however, serious interest develops when these scrips reach close to lower circuit. Lower volume in the market suggests resistance of sellers to sell at all rates, which reignites the hope of a hike once the dust of negativity settles.
  • The Index closed at 43,072pts as against 43,441pts, showing a decline of 368pts (-0.8% DoD). Sectors contributing to this decline include E&P (-85pts), Commercial Banks (-56pts), Cement (-52pts), Power (-36pts) and Fertilizer (-35pts).
  • Volumes increased from 142.4mn shares to 163mn shares (+15% DoD). Average traded value also increased by 26% to reach US$ 66.7mn as against US$ 52.9mn.
  • Stocks that contributed significantly to the volumes include ANL, KEL, PAEL, FCCL and UNITY reflecting 35% of total volumes.
  • Scripts that contributed positively include BAHL (+11pts), NRL (+8pts), DAWH (+5pts), BAFL (+3pts) and NBP (+2pts). Stocks that contributed negatively include HBL (-49pts), OGDC (-34pts), PPL (-28pts), LUCK (-23pts) and HUBC (-23pts).
 

xResearch

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9 March 2018


  • Trading started on a positive note but at a slow pace. News of US imposing tariffs on import of steel dampened the mood in Steel sector scrips and the same negativity carried through in blue chip scrips, including Banks, Cement and Fertilizer. Professional money managers maintain bearish sentiment with negative outlook in the remainder of March. Most of the positive news appearing in press since last week havelived short and got discounted. PAEL saw significant volumes at rates close to lower circuit. Institutional selling is believed to have caused the trades on the expectation of poor results in 3QFY18. ANL also traded in high volume at lower circuit, which is believed to have caused by NAB investigation.
  • The Index closed at 43,011pts as against 43,072pt yesterday, showing a decline of 61pts (-0.1% DoD). Sectors contributing to this performance include OGMCs, (-36pts), Commercial Banks (-30pts) and Technology (-15pts).
  • Volumes declined from 163mn shares to 140mn shares (-14% DoD). Average traded value also declined by 18% DoD to reach US$ 54.5mn as against US$ 66.7mn yesterday.
  • Stocks that contributed significantly to the volumes include ANL, PAEL, UNITY, LOTCHEM and BOP reflecting 47% of total volumes.
  • Scripts that contributed positively include PPL (+30pts), OGDC (+21pts), POL (+21pts), HBL (+18pts) and COLG (+14pts). Stocks that contributed negatively include MCB (-28pts), DGKC (-19pts), PSO (-15pts), TRG (-12pts) and DAWH (-12pts).
 

xResearch

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9 March 2018


Market Review Equities
IMF Outlook Attracts Bears Again


With the domestic equity bourse closing at a level of 43,011 points this week, the market succumbed to bearish sentiments once again, portraying a decline of 729 points WoW. Pessimism in the investment climate spurred from IMF’s press release this week in which concerns were raised regarding the country’s economic outlook going forward, spewing primarily from despondent projections of the current account deficit andbudget deficit of the country. Adding salt to injury, an international bank also downgraded Pakistan’s credit outlook. Political ambiguity from the Senate elections further caused caution amongst investors, as political parties played their cards to get their favored person elected as chairman.
Sectors that dominated the downturn during the week were led by i) Commercial Banks (-180pts), ii) Fertilizer (-120pts), iii) Cement (-101pts), Oil & Gas Exploration Companies (-55 pts) and Oil & Gas Marketing Companies (-52 pts). Minor positive contribution came from Chemicals and Leather & Tanneries (10 pts each). Scrip-wise, negative contributions were derived primarily from selling in blue chip companies. Pressureon the bourse this week was led by HBL (-83 pts), ENGRO (-80 pts) and MCB (-56 pts), TRG (31 pts) and DGKC (29 pts). Support was provided by BAFL (18 pts), COLG (14 pts) and BATA (10 pts).
Foreign offloading this week clocked in at USD 3.9mn compared to a net sell of USD 11.4mn last week. Foreign selling was concentrated in Commercial Banks (USD 2.6mn) and Exploration & Production (USD 1.1mn). Domestically, major buying was reported by Insurance Companies (USD 8.2mn) and Banks/DFIs (USD 4.0mn). Local selling was largely executed by Mutual Funds (USD 6.6mn) and Companies (USD 4.7mn). Volumes settled at 152mn shares (down 16% WoW) while value traded clocked in at USD 60mn (down 19% WoW).

Other major news: i) Nashpa Oil & Gas and LPG project inaugurated, ii) An international bank downgrades Pakistan’s credit outlook, iii) ECC approves plan to settle Rs80bln power sector’s circular debt, iv) Cabinet approves PIA, PSM privatisation plans and v) Shabbir Tiles plans Rs1.25 billion investment for expansion.

Outlook and Recommendation
Going forward, we project the market to depict range-bound behavior as investors can be seen to portray caution as concerns continue to loom over the country’s deteriorating external position. However, clarity on the political front from the election of chairman senate can act as a catalyst. The possible announcement of the amnesty scheme can also uplift investor confidence. Our top picks are OGDC, ABL, PSO, DGKC, ASTL, HCAR, EPCL, EFERT, KAPCO, HUBC and PSMC. The KSE-100 index is currently trading at a cheaper PER of 9.3x (2018) compared to Asia Pac regional average of 13.5x and while offering DY of ~5.1% versus ~2.5% offered by the region.
 

xResearch

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12 March 2018


  • KSE100 index started on the week on a positive note although volumes were low. Selective buying was on the list of many institutions and the same trend is expected to continue during the week. Healthy activity was observed in Cement sector, which saw DGKC and FCCL leading the volumes table in Cement sector. Besides, Banks, Auto and E&P sector saw buying interest which maintained positivity in the market. MCB continued declining trend on the back of foreign selling.
  • The Index closed at 43,411pts as compared with 43,011pts on Friday, showing an increase of 400pts (+0.9% DoD). Sectors contributing to this upsurge include Cement (+110pts), E&P (+80pts), Commercial Banks (+70ps), Fertilizer (+47pts) and OGMCs (+28pts).
  • Volumes declined from 140mn shares on Friday to 109.6mn shares (-22% DoD). Average traded value also declined by 26% DoD to reach US$ 40.2mn as compared with US$ 54.5mn.
  • Stocks that contributed significantly to the volumes include LOTCHEM, UNITY, NRSL, WTL and BYCO reflecting 39% of total volumes.
  • Scripts that contributed positively include OGDC (+45pts), LUCK (+44pts), UBL (+34pts), DGKC (+29pts) and POL (+27pts). Stocks that contributed negatively include MCB (-18pts), NESTLE (-2pts), MUREB (-2pts), GHGL (-2pts) and JSCL (-1pts).
 

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