Al Meezan - Investment Mangaement

7/30/2019 Al Meezan - Investment Mangaement

1/12

Inside:

Pressing Issues:

Matters at hand

Politics: Market

movement as

elections inch

closer

Economy Watch:

Dark clouds or

silver linings?

Fixed Income:

Short Span; Big

Swings

Equity: A tale of

twin peaks 2008-

2012

Commodities:Grit

and Glitter

Technical Analysis:

Bull Run to

Continue

The Path Ahead:

Outlook & Optimal

Asset Allocation

Economic & Market Outlook 2012-2013

Beyond theRhetoric

Beacon of light for investors of Al MeezanInvestments

November 2012

UAN: 111-633-926(111-MEEZAN) www.almeezangroup.com


2/12

1 | P a g e Al-Meezan Investment Management Limited- Economic and Market Outlook 2012-2013

Pressing Issues: Matters at Hand

Politics:The upcoming general elections are going to play a major role and set the

market dynamics with a positive reaction expected if there is any change in the

current set up and the new government manages to bring improvement to the

precarious law and order situation. With the presence of an active judiciary and

media, there are many wildcards that could shape the future direction of thenation.

Economy: The slowdown in global economic growth has had a significant effect on

Pakistans economy. However, inflationary pressures remain subdued and

Pakistans economy fared well by posting a modest GDP growth of 4.0% in fiscal

year 2012. Key triggers for the future include; IMF repayments which may exert

pressure on foreign reserves, but on the brighter side are the expected proceeds of

PTCL privatization, 3G license auction and flows from Coalition Support Fund (CSF).

Equity: Pakistans market remained one of the best performing market in the

region as depicted by the phenomenal returns of 40% witnessed in the ten months

of current calendar year (2012). Presently at historic highs and marching towardspsychological levels of 16,500 and 17,000 points, for KSE 100 index, would fortune

favor the bold or is this a repeat of the peak reached in 2008?

Fixed Income: Despite high government borrowing, inflation took a downward

route in fiscal year 2012 prompting SBP to slash the discount rate by 400 bps in

fourteen months time starting July 2011.

Commodities: Being a net importer of oil, Pakistan faces rising import costs, and

widening trade deficit when oil prices go up. On the other hand, rising prices of

precious metals, including gold and silver provide investors an opportunity to

diversify and make potential gains on such investments, but at what risks?

Technicals: Going forward the KSE100 is likely to remain buoyant and continue its

move up north till it hits 18,200 in next 8 12 months. In the short term, expect

KSE100 to undergo minor consolidation while a pullback breaching 20 Day

Exponential Moving Average (EMA) is likely to find support somewhere around

15,500 15,800. The journey to our target of 18,200 is likely to be a bumpy ride

amidst minor hiccups.

The Path Ahead: Going forward we expect the stock market to continue its

phenomenal performance with further support coming in if economic indicators

stabilize. On the flip side, we expect inflation to inch upwards in the second half of

the fiscal year (but remain in comfortable zone). Though hefty IMF repayments are

due, but if budgeted inflows materialize these concerns will be out at bay.

s

Towards a better tomorrow

Commitment is the cornerstone of Al Meezan

and we recognize the value of commitment to

our investors in providing value added Shariah

compliant investment solutions.

In celebrating our diversity, we recognize the

different needs of our investors based on

individual principles and values in lieu of social

and economic aspirations. Over several years,

we at Al Meezan have remained cognizant of

the evolving needs of our clients and

consistently focus on delivering product

offerings that comprehensively andcompetitively address all our clients needs.

Going forward, we commit to remain focused

at continuing to deliver high-quality Shariah-

compliant investment avenues to our valued

investors for a better tomorrow, in this world

and in the Hereafter!

Contributors:

Abdul Basit Shah; Research & Product Development

Afifa Jeelani; Research Analyst

Ahmed Hasan, CFA; Portfolio Manager

Aisha Kudiya; Research & Product Development

Gohar Rasool; Portfolio Manager

Muhammad Asad; Chief Investment Officer

Sanam Ali Zaib, CFA; Head of Research

Syed Taimur Hasan; Product Development


3/12


Politics: Market Movements as Elections Inch Closer

For the first time in the history of Pakistan, a democratically elected government will be completing its five year tenure, though in the

midst of numerous upheavals. As the term of present government completes, the country is preparing for the next general elections

which are expected to be scheduled in the first half of 2013. No time frame has been given in this regard but full fledge preparation is

underway as PML-N and PTI emerge as strong contenders and the current PPP government is working with its key allies (MQM, ANP,

PML-Q) to secure another term. No matter which political force emerges as a winner, we are aware that this will serve as a major trigger

for the overall economy and the markets.

Although some remarkable reforms (CGT reforms) were introduced by the present government that boosted the stock market, however

the economy did not do wonders. Experience of the majority has been quite rough and we expect that people will be looking forward to

an overall change in the set up. But a point of concern stems from the fact that post elections, the new government will have to put in

order the chaos created by the current government and bring in stability from the law and order perspective.

Figure 1: The graph above shows the impact on KSE-100 index and volumes of key political & economic triggers

(Source: Optimus Research)


4/12


Economy Watch: Dark Clouds or Silver Linings?

Structural Inefficiencies Hamper GDP Growth

Despite the governments projection of GDP growth taking a leap to 4.2% in fiscal year 2012 from 3.50% in fiscal year 2011, GDP

grew by a benign 4% due to structural inefficiencies. With general elections due early next year, we do not expect the trend to

take a major reversal and anticipate the GDP growth to hover in a similar range of 3.7% - 4.0%. We get more affirmative on our

stance as foreign direct investment is expected to remain on the lower end of spectrum. Along with an uncertain political

scenario and energy shortages that continue to plague the performance of numerous industries, private sector credit off-take is

also on a declining trend.

Remittances to the Rescue; Dampened Reserves & Current Account

For fiscal year 2012, despite the government projection of a Current Account Deficit (CAD) of US$1.4bn (0.6% of GDP), the CAD

actually clocked in at US$4.5 billion (2% of GDP), with the sole respite coming in from blossoming remittances which amounted

to US$13 billion. Thankfully, fiscal year 2013 started on a positive note with Pakistan-US relationship improving and Coalition

Support Fund (CSF) materializing as a result of which Pakistan received US$1.2 billion which provided support to the current

account.

IMF Repayments and Exchange Rate Performance

Digging deeper into the past, Pakistan entered in a standby agreement with IMF in 2009, where the donor provided loan

worth US$11.3 billion spreading over a period of three years. As the program ended prematurely, Pakistan now has to make

hefty re-payments which are now exerting pressure on the forex reserves. In fiscal year 2013, the country needs to make IMF

repayments to the tune of US$2.92 billion, which will be a burden on the already weakening forex reserves as shown in Table 1

below. And with uncertainty regarding materialization of budgeted inflows, we expect the forex reserves to hit a bottom low.

We expect to witness Pakistans re-entry into the IMF program as no other donor is willing to lend to Pakistan in the absence of

Letter of Comfort from IMF. Midst of all these concerns is the depreciating Pak Rupee against US dollar which is causing

nervousness across the country. Pak Rupee witnessed depreciation of 9.55% in last one year. While diagnosing the average

depreciation for three, five and ten years, we see the Pakistani rupee plunging down by 5.72%, 9.36% and 8.90% respectively as

shown in Table 2 below.

Positivity Stemming from Low Inflation & Interest Rates

In an absolute abysmal performance of the economy, declining inflation re-kindled hopes as it took the downward route and

averaged at 11.10% for fiscal year 2012. Lower inflation allowed SBP to slash the discount rate by 200 bps in fiscal year 2012.

With the onset of fiscal year 2013, and average inflation for the first quarter fiscal year 2013 clocking in at 9.15%, SBP again

reduced the discount rate further by 200 bps, taking the total cut to 400 bps in a mere fourteen months time. Amid criticism of

the cuts being unsustainable, the SBP has time and again emphasized that the recent monetary easing is done with the view of

helping private sector credit off take to take an upward route. This will hopefully be reflected in efficient utilization of idle

capacity.

Table 1 - IMF Repayments

IMF Repayments in US$ Mn for the next 3- Years1HFY13 2HFY13 1HFY14 2HFY14 1HFY15 2HFY15

1,208 1,707 2,012 1,245 876 408

Table 2- Average PKR value depreciation

Average PKR Depreciation1 Year 3 Years 5 Years 10 Years

9.55% 5.72% 9.36% 8.90%


5/12


Exports to the Rescue

Analyzing the trade scenario of the country, crude oil constitutes bulk of the imports while exports are majorly skewed towards

textile. Unfortunately, the prevalent gas crisis looming the country has badly affected the textile industry which is eventually

reflected in lackluster exports. At the same time, oil prices pose an upside risk owing to instability in the Middle East and the

global concerns on Iran. Pakistans import outlook will remain uncertain, owing to the volatility of commodity prices stemming

from the recent induction of Quantitative Easing- III under which additional US$ 40 billion/month will be printed indefinitely.

Year of Turmoil vs. Year of Recovery

In Table 3 given below, we have undertaken a comparison between the economic situations witnessed in fiscal year 2008 vs.

fiscal year 2012. As evident, improvement has been witnessed on several fronts, significantly the growth in tax collection,

blooming remittances and receding inflation. But at the same time positivity is dampened with reserves depleting and

depreciating Pak Rupee, resultantly making imports expensive and putting the burden on the trade deficit.

*Discount rate which went to 14% post fiscal year 2008 crisis was slashed twice (50 bps in July 2011 & 150bps in October 2011) bringing it down

to 12%. In fiscal year 2013, discount rate was further slashed by 150 bps in August 2012 and again by 50 bps in October 2012 bringing it down to

10%.

Table 3-Economic Indicators

FY2008- A Year of

Economic Turmoil

FY2012- Path to

Recovery

FY2013 Future Outlook -

Hopes PinnedComments

GDP 3.70% 4.00% PositiveEconomy remains in low growth envelope fo

structural reasons

Inflation 12.00% 11.10% PositiveAlthough CPI has come down, core inflation has

remained high.

Discount Rate 12.00% 12.00%* PositiveMonetary easing by 400bps in last fourteen

months

Tax Collection (Rs. Mn) 1,119,956 1,833,100 Positive Growth has been witnessed in the total tax

collection. Despite this Tax to GDP ratio of 9.1%

still remains one of the lowest in regionTax Collection as a % of GDP 9.30% 10% Positive

Current Account (US$ Bn) (14,157) (4,423) Positive Positive remittances inflow containing CAD

Remittances (US$ Mn) 6,451 13,032 Positive High remittances, becoming a permanent feature

Fiscal Deficit as a % of GDP 7.60% 8.80% NegativeHigh fiscal deficit remains the main cause o

concern

Forex Reserves (US$ Bn) 11,399 15,236 NegativeIMF repayments forcing external accoun

pressures

PKR/US$ Parity 79.19 94.50 NegativeLocal currency likely to slip further amid

depleting reservesTrade Deficit (US$ Mn) (15,501) (14,970) Negative Oil to play a vital role

Total Debt as a % of GDP 59% 62.60% NegativeMajor chunk of increase has come from domesti

sources


6/12


Fixed Income: Short Span; Big Swings

Every story has a positive and a negative aspect and this becomes clearer as we analyze the inflationary environment and the

fixed income returns.

In August 2012, GoP changed the base year for CPI calculation from fiscal year 2001 to fiscal year 2008. At the same time,

Federal Bureau of Statistics (FBS) adopted the latest Classification of Individual Consumption According to Purpose being

formulated by the United Nations (UN). This resulted in change in weightage of the components in CPI basket with a major

change witnessed in the food group which declined from an earlier 40% to 37%. These two steps did wonders with inflation

taking the downward trend.

Analyzing the numbers, we see that the average inflation for fiscal year 2012 closed at 11.01% after touching the peaks of 25%

in fiscal year 2009. This prompted the State Bank of Pakistan (SBP) to adopt a stance of monetary easing by slashing the

discount rate twice in a year from 14.00% to 12.00%. The base year change continued to shower its blessing with the onset of

fiscal year 2013, as inflation for the first four months averaged at a subdued 8.76%. Resultantly, SBP continued its path of

monetary easing and reduced the discount rate by a further 200 bps in two consecutive monetary policy statements, bringing it

down to 10%. Inflation for the four months of fiscal year 2013 clocked in at 8.76%, but with the rebasing effect fading off, we

expect the inflation to inch up in the second half of fiscal year 2012 though it will still remain in a comfortable zone. Though in

the short term we foresee a monetary easing stance of the SBP, in the long term we anticipate the monetary easing to halt.

With every cut made, SBP re-iterated its stance of aiding the economy via this step, effects of which, we hope will be evident in

a years time. However, the effect of this rate cut was felt by reduced returns on various fixed income securities as shown in the

table below:

Table 4- Fixed Income

Before Monetary

Easing (July 2011)

Current Rates

(November 2012)Difference

SBP Discount Rate 14.00% 10.00% (4.00%)

GoP Securities

6- Months T-Bills 13.76% 9.23% (4.54%)

Pakistan Investment Bonds (PIBs)- 10 Years 14.07% 11.58% (2.49%)

Ijarah Sukuks - 3 years 14.00% 10.00% (4.00%)

Saving Schemes

Special Saving Certificates -3 years 14.00% 10.70% (3.30%)

Defense Saving Certificates - 10 years 13.55% 11.50% (2.05%)

Corporate Instruments

TFCs (AA- rated and above)- 2 to 8 Years 14.49% 10.50% (3.99%)

Corporate Sukuks 15.70% 10.42% (5.28%)

Bank Placement - 6 12 months 12.50% 9.00% (3.50%)


7/12


Equity: A Tale of Twin Peaks 2008-2012

The global economic scenario has radically changed in the last few years. The markets have become more integrated and

correlated. The fiscal year 2012 began amidst a lot of uncertainty in the international equity markets and the world was on the

brink of financial turmoil led by precarious economic situation. On the local front, political uncertainty reigned supreme with

the current regime coming under fire from a number of quarters. Adding fuel to the fire was the worsening relations with the

US post death of Pakistani soldiers in US strikes. With the onset of fiscal year 2013, tension eased off with US issuing an apology

and resumption of NATO supply routes and KSE-100 index picked up momentum and continued its upward march.

A Comparative Tale of the Twin Peaks

The KSE-100 index touched an all time high of 16,200 in November 2012, crossing its previous high of 15,438 that it attained in

April 2008 as shown in figure 2 below:

Analyzing the scenario of 2008, we saw the KSE-100 index stumbling down and floor being imposed on index level after posting

phenomenal performance. A point of contention that prevails in an investors mind is the similarity between the two time

periods, and as given in table 5 below, we see that the market multiple is currently quite low, which renders the equity

investment pretty attractive. We would like to add here that KSE- 100 index is a total return index incorporating all payments by

its component companies. Hence, the current level of 16,000 is not equivalent to the peaks attained in 2008.

Table 5- Relative Comparison of the Two Peaks

FY 08- A Year of

Economic Turmoil

FY12- Path to

Recovery

FY13 Future Outlook -

Hopes PinnedComments

KSE- 100 Index 12,289 14,143 PositiveUpside march to continue from

growing corporate profitability.

Prospective P/E 10.4x 6.40x PositiveLow P/E makes the stock market very

attractive.Earnings Growth 17% 14% Negative Sustainable earnings growth.

Leverage Amount in Market (Rs. Bn) 54.00 2.00 Positive Reduction in leverage amount.

Market Capitalization. (Rs. Mn) 2.28 Mn 2.42 Mn PositiveGrowing corporate profitability

enhances market capitalization.

Dividend Yield 3.3% 6.6% Positive Attractive dividend yield.

6 month T- Bills 13.80% 9.23% Positive Monetary easing continues.

Gap between Dividend Yield & T-bill

Rate-10.5% -2.6% Positive

FY13 dividend yield of 6.6% is 250bps

below current T-bill yield of 9.1%.

Figure 2: The graph above shows the two historical peaks witnessed in the KSE-100 index on closing basis.


8/12


As shown in Table 5 above, we see that the future direction of the KSE-100 index is positive and we expect the index to touch

the psychological barriers of 17,000 by mid of 2013. On the back of strong fundamentals and superior corporate profitability

we saw KSE-100 index emerging as one of the best performing markets with a return of over 40% during the ten months of

current calendar year (2012).

Investments in Equities- Much Better than Alternatives!

When available alternatives are compared with respect to return over a twelve year period, equities have remained the best

choice for investors who have a long term perspective and can withstand short to medium term volatility in stock market. As

evident in the table given below, in the last twelve years, Pakistan stock market has provided a compounded annual return of

22% on investments which is higher as compared to other asset classes. The second best performing asset over the same

period, gold that has glittered over the period in fact has lagged behind equities by a whopping 4% per annum.

Equity Gold DSS PIBs Inflation

6-month

Tbill

Bank

deposits

CY01 -16% 2% 15% 13% 4% 11% 6%

CY02 112% 25% 13% 9% 4% 7% 4%

CY03 66% 19% 9% 5% 3% 2% 2%

CY04 39% 6% 8% 7% 7% 3% 1%

CY05 54% 18% 9% 9% 9% 8% 3%

CY06 5% 2 3% 1 0% 10% 8% 9% 3%

CY07 40% 31% 10% 10% 8% 9% 4%

CY08 -58% 6% 11% 14% 20% 12% 6%

CY09 60% 24% 11% 13% 14% 13% 6%

CY10 28% 30% 12% 13% 15% 13% 6%

CY11 -6% 10% 13% 14% 12% 13% 6%

CY12 40% 10% 12% 13% 10% 11% 5%

CAGR 22% 17% 1 1% 11% 9% 9% 4%

Table 6-Investment Avenues

Equity: KSE 100 Index has been used as a proxy

DSS: Defense Saving Certificates

PIBs: Pakistan Investment Bonds CertificatesInflation is represented by Consumer Price Index (CPI)

Total Banking SectorDeposit (Source: SBP)

22%

17%

11% 11%9% 9%

4%

0%

5%

10%

15%

20%

25%

Equity Gold DS S PI Bs I nflation 6-month

Tbill

Bank

deposits

Figure 3: Investment Avenue (CAGR)

22%

17%

11% 11%9% 9%

4%

0%

5%

10%

15%

20%

25%

Equity Gold DS S PI Bs I nflation 6-month

Tbill

Bank

deposits

Figure 3: Investment Avenue (CAGR)


9/12


Commodities: Grit & Glitter

Despite their return potential, traditional asset classes such as equity and fixed income remain exposed to declining interest

rates and recessionary trends. Hence, non-traditional asset classes namely, precious metals and commodities can act as

diversifiers to improve risk-return profile of your portfolio.

We reiterate that the structural issues of leading economies would lead to a flood of paper money and hence declining

purchasing power. In such times, commodities and precious metals can act as safe havens for investors seeking to protect

themselves from hyper-inflation. It is estimated that since April 2012, the global debt has increased by approximately US$2

trillion to US$49-51 trillion based on different estimates. This figure will get an additional boost from the US$40bn per month

injection by US Fed alone under the name of Quantitative Easing III and host of bailouts to come in the EU, these economies

represent a combined 47% of global GDP.

Oil: After touching their highest level of US$147/ bbl in July 2008, oil touched a low of US$32.4/bbl in January 2009, though the

crash was for a short span of time. Since then oil prices have remained firm and almost recovered 80% of the fall in the prices.

However, the slowdown in global economies may lead to a weak outlook for oil despite disturbances in Middle East which

would continue to support prices.

Gold: Gold prices on an average were up by more than 30% in 2010 while for the last two years (i.e. 2011 and CYTD 2012) havewitnessed an average appreciation by a mere 10% each year. The gold has provided a compounded annual return of 17% over

the last twelve years; we feel that it may still have a crucial role to play despite being speculative in nature. An important point

of contention is that, with current deleveraging and easing, gold may move sideways. Therefore, it would be prudent to keep a

nominal percentage in your portfolio, and stay long in the commodity to reap the benefits of diversification.

Cotton: Cotton remains important to the economic health of Pakistan as nearly 50% of exports are dependent on cotton and

cotton related goods. We anticipate that global demand and supply dynamics may not be in favor of the commodity as excess

global supply combined with deteriorating demand owing to recessionary trends. We anticipate that the cotton prices may not

move much owing to the above factors.

Alternate asset classes such as precious metals and commodities can act as important diversifiers to the portfolio. Assets like

precious metals can act as hyper-inflationary shield to excesses in monetary policies while commodities can act as return

enhancers.

Table 7- Commodity Trend

FY2008 FY2012 Future Outlook Comments

Brent Crude US$/bbl 138.04 97.79 PositiveDemand may taper off; tensions in Middle East may

continue to support

Gold Prices US$/ ounce 925 1597 PositiveWill become favorable as central banks continue to

increase bank reserves

Cotton US/lb 71.4 72.16 NeutralDemand stagnation combined with improved supplies

may keep the commodity under pressure


10/12


Technical Analysis: Bull Run to Continue

After declining significantly in 2008 the KSE100 has been in an uptrend since January 2009. Rising from its lows of 4,781, the

benchmark index now stands above 16,000 and is still holding strong. Since the beginning of fiscal year 2013 the benchmarkindex has rallied from 13,812 to 16,292 (intra day high posted on 12

thNovember 2012) - posting a healthy gain of 2,480 points

or almost 18% in just over four months.

On taking a closer look at 4 year weekly chart of KSE-100 (as shown below) we can see that the trendline drawn from 4,781 (the

diagonal red line on top) has played a significant role in helping the KSE-100 track along on both sides of its path. The same

chart also reveals that the 20 Week Exponential Moving average (WEMA) has played a significant role in supporting the index

during the June 2012 correction.. Also notice the bearish wedge extending from the lows of 2012 in a bullish uptrend.

Considering the mixed signal generated by the wedge, a break out in either direction is possible. Bullish breakouts should be

accompanied by a significant increase in volume with appropriate stops used if volume surge is not seen. The price action prior

to a wedge formation can be used as a guide in predicting the price movement upon breakout. Another finding on daily charts

highlights multiple Fibonacci projection levels, extending a strong cluster of resistance from 16,200 to 16,700.

Since the beginning of fiscal year 2013, 20 Day Exponential Moving Average (EMA) has played a vital role in supporting the

KSE100 and in return help post recent gains. There has only been one incident of 20EMA being taken out in calendar year 2012

and that was during the 9.3% correction in June. Based on mid term historical behavior of 20EMA it is safe to assume that thebenchmark index is likely to continue its journey up north as long as it hovers above the 20EMA. Similarly, the red trend line

(the one on top) will continue to pose resistance although the index can potentially trail along parallel to its pathuntill it

undergoes some consolidation or correction. We would be shorting it only upon a decisive break below 20EMA aiming for

support around 20WEMA. Amidst minor hiccups the KSE100 looks set to test 18,200 towards the end of fiscal year 2013.

Figure 3: Technical Analysis

Source: Bloomberg


11/12


The Path Ahead:Outlook & Optimal Asset Allocation

Outlook

Pakistan has a huge potential for growth and it is further favored by the

demographic characteristics where 60% of the population is below the age of

30. With increasing urbanization, consumer demand is gradually rising which

will serve as an impetus to growth in the near future. The constraints lie on

the supply side coming majorly from infrastructural inefficiencies and

improper planning by the government. These issues can be resolved with

better governance and planning and with elections due early next year, there

are high expectations that these issues will be tackled by the new

government.

On the economic end, the major challenges stem from the oil prices, which at current levels of US$110/ bbl, pose a heavy

burden to the oil import bill. At the current prices we expect the oil import bill to surpass US$15.2bn in fiscal year 2013. As far

as current account is concerned, the situation improved in the first four months of FY 13 with the support of coalition fund from

USA. Whereas, inflation is anticipated to inch up in the second half of fiscal year 2013, we expect that it will remain in

comfortable zone.

While it is feared that monetary easing may be short-lived, in the event that Pakistan approaches IMF funding program, the

possibility of a rise in discount rate is even more distant. However, in the midst of all the pressure forces dragging the economy,

the equity market is expected to continue to reach new heights along with rising consumer demand serving as an impetus to

growth in the near future.

Strategic Optimal Asset Allocation

The table below shows the optimal asset allocations for an investor based on his stage of life and risk-taking ability. The

combination of the two factors determines the relevant investment style an investor should pursue:

The recommended strategy for our investors is to go for a more conservative, long-term focus plan that yields

substantial returns through every boom and bust cycle. Moreover, a greater focus on research and analysis and

a low volatility fund management aimed at reducing risk and protecting investments should be the priority.

However, for such tailored and personalized investment advisory and allocation services, investors are only

advised to approach our professional investment advisors. Just dial 0800- HALAL (42525) or SMS INVEST to

6655, and one of our representatives will contact you promptly.

Table 8- Asset Allocation

Age Group Investment Style Risk Taking Ability Equity Gold Fixed Income Money Market

Young Aggressive High 60% 10% 20% 10%

Middle Aged Balanced Medium to High 40% 10% 30% 20%

Retirement Age Conservative Low to Medium 20% 0 50% 30%

Post Retirement Very Conservative Low 0 0 60% 40%

Key Triggers-2013

Growing corporate profitability

Improvement in Pak- USA relationsExpectation of further monetary easing

Improving economic indicators

Attractive P/E multiple and growing foreign

interest

Stability stemming from political end


12/12


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