Indices KMI- 30 Allshare StockSmart Pakistan Weekly Update

AKD Research [email protected]

+92-21-111-253-111

Weekly Review

The market remained range bound in the outgoing week, closing in at 47,170pts, down 0.67%WoW as geopolitical uncertainty kept the investors at bay. This was also visible in 37.8%WoW decline in avg. daily turnover to 306mn shares. Major data points released during the week included: (i) trade deficit for Jul’21 clocked in at US$3.1bn, up 85.5%YoY on increase in global crude oil price hikes and, (ii) remittances remained stable at US$2.71bn. The auto numbers release showed PSMC/INDU recording highest ever monthly sales with 15,181/6,715 units, up 197/48%MoM and 204/66%YoY, on the back of budgetary measures. Other major headlines during the week included: (i) WB irked by govt’s ‘failure’ to honour commitment to increase electricity tariff by PkR1.39 per unit wef Jun’21, (ii) Govt seeks Nepra’s nod to phase out power subsidy plan, (iii) Lucky gets permission to set up assembly plant for Samsung mobile devices, (iv) Chinese sponsor’s rejection to Pakistan’s request for review of Rate of Return (RoR) on power sector projects and, (v) decline in SBP reserves by US$220mn on debt servicing. On economic front, ECC approved remittances loyalty program in the outgoing week. Meanwhile, US$2.77bn are expected to flow in SBP’s accounts on23rd Aug’21. However, persistent fears on geopolitical developments amid a lack of triggers, where the market has already priced in economic revival kept the investors at bay, where result announcements resulted in sporadic price performances. Top performers of the market included i) FCEPL (+24.5%WoW), ii) PSEL (+6.5%WoW), iii) INDU (+5.9%WoW), iv) TRG (+4.8%WoW), and v) MEBL (+4.1%WoW). Mean-while laggards included: i) STJT (-10.4%WoW), ii) HASCOL (-7.4%WoW), iii) GATI (-7.3%WoW), iv) SFL (-7.3%WoW), and v) AKBL (-7.0%WoW). Flow wise, Foreigners continued to be net buy-ers with an inflow of US$3.9mn, cushioning the sell-off by Insurance companies (US$6.6mn), and Individuals (US$3.0mn).

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©2021 AKD Securities Limited. All rights reserved. The information provided on this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject AKD Securities or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this document constitutes a solicitation or offer by AKD Securities or its affiliates to buy or sell any securities or provide any investment advice or service. AKD Securities does not warrant the accuracy of the information provided herein.

www.akdsecurities.net

AKD Securities

TREC Holder & Registered Broker

Pakistan Stock Exchange

REP-019

Find AKD research on Bloomberg

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

The market performance is likely to remain range-bound given deteriorating situation in Afghani-stan, and uncertainty surrounding IMF review (likely to commence from Sep’21). A keen eye should be kept on upcoming results for any surprise-driven move in individual stocks. To this end, major results include, KAPCO, FCEPL and LOTCHEM. ). We continue to advocate building positions in thematic plays such as in Cements, Steel, and Construction-Allied, and Textiles (on currency devaluation).

Outlook

Top-5 Volume Leaders

Symbol Volume (mn)

WTL : 135.10

GGL : 99.34

TELE : 80.16

BYCO : 66.93

TPL : 54.39

Source: PSX & AKD Research

Indic e s KSE- 10 0 KSE- 3 0

This week 47,170 18,855

Last week 47,490 18,965

Change - 0.67% - 0.58%

Indic e s KMI- 3 0 Allsha re

This week 75,930 32,269

Last week 76,841 32,544

- 1.19% - 0.84%

Mkt Ca p. PkRbn US$ bn

This week 8,258 50.35

Last week 8,341 51.05

Avg. Da ily Turnove r ('mn sha re s)

This week 306.70

Last week 493.20

Change - 37.8%


Index & Volume Chart KSE100 Gainers & Losers

47,124

47,135

47,377

47,271

47,170

46,950

47,000

47,050

47,100

47,150

47,200

47,250

47,300

47,350

47,400

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

9-Aug 10-Aug 11-Aug 12-Aug 13-Aug

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

13 August 2021

37,000

39,000

41,000

43,000

45,000

47,000

49,000

0

500

1,000

1,500

2,000

2,500

3,000

Aug-2

0

Sep-2

0

Nov-

20

Dec-

20

Jan

-21

Mar-

21

Apr-

21

May-2

1

Jun

-21

Aug-2

1

(Index)(share mn)

Volume in million (LHS) KSE-100 Index

-18.0%

-12.0%

-6.0%

0.0%

6.0%

12.0%

18.0%

24.0%

30.0%

FC

EP

L

PS

EL

IND

U

TR

G

ME

BL

AK

BL

SF

L

GA

TI

HA

SC

OL

ST

JT

AKD Securities Limited

13 August 2021

StockSmart


This Week’s Daily Reports

2

Pakistan Auto: Sales surged 91%YoY in Jul'21, (AKD Daily, Aug 13, 2021)

The total industry sales in July’21 clocked in at 29,593 units (+91%YoY) compared to 19,173 units in June’21 (+54%MoM). The sales consisted of 20,669 passenger cars, a whopping in-crease of 79%MoM/104%YoY where the upsurge in offtake was on the back of price reductions and deliveries that were supposed to be received in June. Other sales consist of 4,249 LCVs (+95%MoM/177%YoY), and 320 trucks (-9%MoM/47%YoY).

7MCY21 total industry sales of 162,356 units (+106%YoY) consist of 104,825 passenger cars (+121%YoY), 21,536 LCVs (+159%YoY) and 2,365 trucks (+48%YoY), showing a sharp recovery in demand after hitting the rock bottom in CY20 on the back of industry shutdowns due to Covid-19.

Amongst major OEMs, PSMC/INDU recorded highest ever monthly sales with 15,181/6,715 units, up 197/48%MoM and 204/66%YoY whereas HCAR remained laggard at 2,307 units, down by 30MoM/6%YoY. During 7MCY21, the sales of PSMC/INDU/HCAR stand at 65,277/37,812/17,932, up 38/107/67%YoY.

In terms of displacement wise sales, the sales of 1,300CC+ segment stood nearly flat at 7,265 units whereas the 1,000CC segment propelled by 103%MoM/286%YoY to stand at 6,344 units whereas 800CC and below segment stood out by increasing 403%MoM/164%YoY to top out at 7,060 units.

ABL & BAFL: 1HCY21 Result Previews, (AKD Daily, Aug 12, 2021)

ABL earnings to stand at PkR3.42/sh in 2QCY21: We forecast Allied Bank Limited (ABL) to an-nounce 2QCY21 earnings of PkR3.9bn (EPS: PkR3.4), which will take the cumulative profitability to PkR8.0bn (EPS: PkR7.0) for the period, down 5%YoY. Bank is expected to announce 2QCY20 dividend of PkR2.0/sh, taking the total payout to PkR4.0/sh. Sequentially, earnings are ex-pected to come off by 5%QoQ on the back of i) higher admin expenses, ii) higher effective taxation. However ABL may be able to surprise our estimates on the higher side by booking reversals (we have estimated provisioning expense of PkR200mn). The scrip trades at a for-ward P/B of 0.56x—BUY

BAFL EPS expected at PkR1.8 during 2QCY21: Bank Al Falah Limited (BAFL) 2QCY21 earnings are estimated at PkR3.2bn (EPS: PKR1.8), this translates into 1HCY21 earnings of PkR6.6bn (EPS: PkR3.7). Along with the result, we expect BAFL to announce cash dividend of PkR1.5/sh. On sequential basis, BAFL’s earnings are expected to recede by 6%QoQ, largely on the back of normalization of capital gains in the outgoing quarter which are expected to come off by 40%QoQ, amid high base effect. However, with BAFL maintaining and ADR of over 63%, no addi-tional tax liability will be levied on the profitability and therefore we expect realized effective tax rate to settle around 39% . We have a BUY call on the scrip with a TP of PKR53/sh.

INDU: 4QFY21 Result Previews, (AKD Daily, Aug 11, 2021)

INDU to post a whopping 126%YoY higher FY21 NPAT; Dividend to subside at PkR100/sh: We expect Indus Motors Company Limited (INDU) to post 4QFY21 NPAT of PkR3.1bn (EPS: PkR39.3), down 15%QoQ, taking the collective FY21 earnings to PkR11.5bn, translating into PkR146/sh (+126%YoY). We expect the sales in 4QFY21 to deteriorate by 16%QoQ on account of 12%QoQ lower volume offtake (14.6k units in 4QFY21 vs 16.5k units in 3QFY21) while the gross margins are expected to clock in at 8.3% compared to 9.2% in 3QFY21 due to an upsurge of 13/22%QoQ in CRC/HRC prices. On the other hand, we expect the other income in FY21 to clock in at PkR5.9bn (+86%YoY) on account of cash and ST investments of ~PkR70bn as per the latest financial statements. Hence, we expect INDU to post NPAT of PkR11.5bn, translating into PkR146/sh (+126%YoY, coming from a low base). In addition to this, we expect a payout of PkR33/sh taking the annual payout to PkR100/sh. Going forward, we expect the volumes to grow further in FY22 on the back of auto policy’21 coupled with new Corolla in pipeline (most likely to be propelled in hybrid variant as well) and other minor facelifts of Fortuner and Revo providing significant pricing power to the company in premium segment. Our target price of PkR1,826/sh implies an upside of 39% from last close in addition to DY of 10%, taking the total return to 49%. The stock is currently trading at FY22 P/E multiple of 7.3x compared to historical average of 9.5x.

Aug 10, 2021

Aug 13, 2021

Aug 12, 2021


Aug 11, 2021

47,100

47,150

47,200

47,250

47,300

47,350

47,400

47,450

47,500

47,550

47,600

9:3

2

9:5

5

10:1

8

10:4

2

11:0

5

11:2

8

11:5

2

12:1

5

12:3

8

13:0

2

13:2

5

13:4

8

14:1

2

14:3

5

14:5

8

15:2

2

46,800

46,850

46,900

46,950

47,000

47,050

47,100

47,150

47,200

47,250

47,300

9:3

1

9:5

6

10:2

0

10:4

5

11:0

9

11:3

4

11:5

8

12:2

3

12:4

7

13:1

2

13:3

6

14:0

1

14:2

5

14:5

0

15:1

4

Aug 09, 2021

46,900

47,000

47,100

47,200

47,300

47,400

47,500

47,600

47,700

9:3

1

9:5

6

10:2

0

10:4

5

11:0

9

11:3

4

11:5

8

12:2

3

12:4

7

13:1

2

13:3

6

14:0

1

14:2

5

14:5

0

15:1

4

47,100

47,130

47,160

47,190

47,220

47,250

47,280

47,310

47,340

9:1

69:4

010

:03

10

:26

10

:50

11

:13

11

:36

12

:00

12

:23

12

:46

13

:10

13

:33

13

:56

14

:20

14

:43

15

:06

15

:30

15

:53

16

:16

47,200

47,250

47,300

47,350

47,400

47,450

47,500

47,550

47,600

47,650

9:3

2

9:5

5

10:1

8

10:4

2

11:0

5

11:2

8

11:5

2

12:1

5

12:3

8

13:0

2

13:2

5

13:4

8

14:1

2

14:3

5

14:5

8


13 August 2021

StockSmart


This Week’s Daily Reports

3

Pakistan Commodities: COVID scare makes commodities lose steam , (AKD Daily, Aug 10, 2021

Jul’21 marks the slowest monthly surge in TRJ CRY index since Mar’21, +2.2%MoM as com-modity complex appeared to be running out of steam, with downward corrections seen in metals (scrap prices down 10%MoM) and agriculture (FAO index down 1.2%MoM) over Jun’21. However, energy remains well supported with short term outlook largely depending on OPEC+ policy and resurging COVID cases globally.

Oil prices averaged US$75/bbl in early Jul’21, as the OPEC+ failed to reach a deal on produc-tion quotas for the period of Aug’21 to Dec’21. However, it cooled down in the latter half of the month as Saudi and UAE managed to reach compromise (benchmark production for UAE revised upwards) and clarity over oil production levels ensued.

Coal prices continue to sustain high grounds, currently trading at USD134/ton against aver-age USD121/ton for Jul’21 while CYTD, coal prices are up 54%. Similarly, DAP prices aver-aged at US$657/MT in Jul’21, +6%MoM amid global shortage of the commodity and uptrend in global energy prices.

Short term outlook for commodities is clouded by rapidly spreading COVID-delta variant, weakness in Chinese economic data and strengthening dollar index (+1.2% since Jul’21) following hawkish Fed comments and a very strong US job report.

PSO: 4QFY21 Result Previews, (AKD Daily, Aug 09, 2021)

PSO: 4QFY21 EPS expected to clock in at PkR12.2: Pakistan State Oil (PSO) is expected to post PAT of PkR24.0bn (EPS: PkR51.1) for FY21 against LAT of PkR6.5bn for FY20 on the back of heavy inventory losses for FY20. For 4QFY21, PAT is expected to clock in at PkR5.7bn (EPS: PkR12.2) against LAT of PkR9.5bn for 4QFY20 while on QoQ basis, profitability is expected to decline by 34% as high inventory gains during last quarter kept the base high. PSO’s overall market share for 4QFY21 increased to 46.3% against 44.5% for 4QFY20 where major in-crease was witnessed in furnace oil with PSO’s market share standing at 50% against 15.4% for 4QFY20 while an increase in retail fuel volume of 15.4%YoY against 19%YoY of the indus-try resulted in retail fuel market share declining to 45% for 4QFY21 against 47% for 4QFY20. Despite decline in interest rates, we expect PSO’s finance cost to cost to increase on QoQ basis as furnace oil demand from power sector increased during the quarter, resulting in increased need for short term borrowings. PSO (TP: PkR305.6/sh, 38% upside) is our top pick where near term developments include clearance of circular debt and shift in profile of cash flows due to increased share of retail fuels while focus on improving storage infrastruc-ture will result in company sustaining the recently gained market share, moving forward.


13 August 2021

StockSmart


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

SPOT Units 13-Aug-21 6-Aug-21 WoW CYTD

TRJ-CRB Points 217.6794 214.4885 1.49% 29.73%

Nymex (WTI) US$/bbl. 69.01 68.28 1.07% 42.23%

ICE Brent US$/bbl. 71.11 70.28 1.18% 38.97%

N. Gas Henry Hub US$/Mmbtu 4.07 4.146 -1.93% 70.98%

Cotton USd/Pound 99.95 99.3 0.65% 18.14%

Gold US$/Tr.Oz 1764.14 1763.03 0.06% -7.07%

Sliver US$/Tr.Oz 23.4921 24.3305 -3.45% -11.02%

Copper US$/MT 9435.75 9446 -0.11% 21.77%

Platinum US$/Oz 1029.97 983.58 4.72% -3.93%

Coal US$/MT 137.1 135.85 0.92% 57.50%

SPOT 13-Aug-21 6-Aug-21 Chg +/- WoW CYTD

Dollar Index 92.783 92.800 -0.017 -0.02% 3.16%

USD/PkR 163.593 163.126 0.467 0.29% 2.35%

USD/JPY 110.140 110.250 -0.110 -0.10% 6.67%

EUR/USD 1.177 1.176 0.001 0.07% -3.65%

GBP/USD 1.384 1.387 -0.004 -0.26% 1.21%

AUD/USD 0.736 0.736 0.000 0.01% -4.38%

NZD/USD 0.702 0.701 0.001 0.14% -2.28%

CHF/USD 0.919 0.915 0.005 0.50% 3.86%

CAD/USD 1.252 1.255 -0.004 -0.28% -1.62%

USD/KRW 1,169 1,142 26.800 2.35% 7.60%

CNY/USD 6.479 6.483 -0.004 -0.06% -0.74%

Country Bloomberg Code 13-Aug-21 6-Aug-21 WoW CYTD

Pakistan KSE100 Index 47,170 47,490 -0.67% 7.8%

Srilanka CSEALL Index 7,996 8,099 -1.27% 18.0%

Thailand SET Index 1,528 1,522 0.43% 5.4%

Indonesia JCI Index 6,139 6,203 -1.03% 2.7%

Malaysia FBMKLCI Index 1,505 1,490 1.03% -7.5%

Philippines PCOMP Index 6,320 6,540 -3.36% -11.5%

Vietnam VNINDEX Index 1,357 1,341 1.16% 22.9%

Hong Kong HSI Index 26,392 26,179 0.81% -3.1%

Singapore FSSTI Index 3,165 3,177 -0.37% 11.3%

Brazil IBX Index 52,260 53,084 -1.55% 3.7%

India SENSEX Index 55,437 54,278 2.14% 16.1%

China SHCOMP Index 3,516 3,458 1.68% 1.2%

S&P SPX Index 4,461 4,437 0.55% 18.8%

DJIA INDU Index 35,500 35,209 0.83% 16.0%

NASDAQ Composite CCMP Index 14,816 14,836 -0.13% 15.0%

UK UKX Index 7,221 7,123 1.38% 11.8%

Germany DAX Index 15,986 15,761 1.43% 16.5%

Qatar DSM Index 10,920 10,908 0.11% 4.6%

Abu Dhabi ADSMI Index 7,594 7,419 2.36% 50.5%

Dubai DFMGI Index 2,815 2,820 -0.20% 12.9%

Kuwait KWSEIDX Index 6,633 6,633 0.00% 0.0%

Oman MSM30 Index 4,002 4,002 0.00% 9.4%

Saudi Arabia SASEIDX Index 11,324 11,209 1.02% 30.3%

MSCI EM MXEF Index 1,291 1,293 -0.13% 0.0%

MSCI FM MXFM Index 654 649 0.71% 14.4%

120

130

140

150

160

170

180

190

200

210

220

230

Au

g-2

0

Oct-

20

Dec-2

0

Fe

b-2

1

Ap

r-21

Ju

n-2

1

Au

g-2

1

149.0

152.0

155.0

158.0

161.0

164.0

167.0

170.0

Aug-2

0

Sep-2

0

Nov-2

0

Dec-2

0

Feb-2

1

Mar-

21

May-2

1

Jun

-21

Aug-2

1

5


13 August 2021

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

Average PIB and E/Y differential

KSE-100 vs. MSCI-EM & MSCI-FM

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Au

g-2

0

Oc

t-2

0

De

c-2

0

Fe

b-2

1

Ap

r-2

1

Ju

n-2

1

Au

g-2

1

KSE100 MSCI EM

MSCI FM

1,297

549

(310)

1,550

866

(500)

-

500

1,000

1,500

2,000

9-Aug-21 10-Aug-21 11-Aug-21 12-Aug-21 13-Aug-21

(US$'000)

Ind., (3.01)

Co., 2.53 Bank/DFI,

1.11

NBFC, 0.12

M.Funds, (0.16)

Ins , (6.62)

Others , 1.20

Prop. Trading , 0.88

(8.00)

(6.00)

(4.00)

(2.00)

-

2.00

4.00

0.60

0.90

1.20

1.50

1.80

2.10

Aug

-20

Oct-

20

Dec-2

0

Ma

r-2

1

Ma

y-21

Aug

-21

2

-0.1

-0.1

0.0

0.0

0.1

0.1

0.2

Aug

-20

Oct

-20

Dec

-20

Feb-

21

Apr

-21

Jun-

21

Aug

-21

KSE-All Share Index AKD Universe

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

14.0%

14.5%

15.0%

15.5%

16.0%

16.5%

17.0%

17.5%

18.0%

Aug

-20

Sep

-20

Nov-

20

Dec-

20

Feb-2

1

Mar-

21

May-2

1

Jul-

21

Earning Yield PIB Yield

7

AKD Securities Limited StockSmart


AKD Universe Active Coverage Cluster’s Valuations

13 August 2021

UR Under Review Source: AKD Research

Stocks Symbol Price TP Stance EPS PE(x) P/B DY(%)

(PkR) (PkR) 20 21F 22F 20 21F 22F 20 21F 22F 20 21F 22F

Automobile and Parts

Indus Motors INDU 1,324.8 1,500.0 Buy 64.7 156.6 159.4 20.5 8.5 8.31 2.5 2.3 2.1 2.3 7.3 7.9

Pak Suzuki Motors PSMC 350.7 396.0 Buy (19.3) 30.7 47.9 n.a 11.4 7.3 1.2 1.1 1.0 - 1.7 2.7

Cements

DG Khan Cement DGKC 105.2 209.7 Buy (4.9) 9.0 13.5 n.a 11.7 7.8 0.7 0.7 0.6 - 1.7 3.9

Lucky Cement LUCK 856.6 1,289.2 Buy 10.3 44.6 52.2 82.8 19.2 16.4 2.8 2.4 2.2 - 1.1 1.9

Maple Leaf Cement Factory MLCF 43.1 80.1 Buy (3.2) 3.4 6.2 n.a 12.6 7.0 1.5 1.3 1.1 - 1.6 5.6

Fauji Cement Company Ltd. FCCL 21.6 39.1 Buy (0.04) 2.5 3.5 n.a 8.7 6.2 1.5 1.5 1.4 - 9.2 12.8

Pioneer Cement Limited PIOC 116.9 138.0 Buy (0.9) 7.5 10.0 n.a 15.5 11.7 2.0 1.8 1.6 - - -

Cherat Cement Co Limited CHCC 163.2 172.0 Sell (9.7) 15.4 16.3 n.a 10.6 10.0 1.9 1.8 2.9 - 1.9 2.0

Engineering

Amreli Steels Ltd. ASTL 42.6 64.0 Buy (3.8) 4.9 5.5 n.a 8.7 7.8 1.1 1.0 0.9 - - 2.3

Fertilizers

Engro Corporation ENGRO 296.1 320.0 Buy 28.7 51.2 50.2 10.3 5.8 5.9 0.8 0.7 0.6 8.8 10.1 10.1

Engro Fertilizers Limited EFERT 76.1 69.1 Sell 13.6 9.4 10.0 5.6 8.1 7.6 2.3 2.4 2.4 17.1 13.14 14.46

Fauji Fert. Bin Qasim Ltd. FFBL 25.5 37.0 Buy 2.3 7.0 5.3 10.9 3.6 4.8 1.7 1.2 0.9 - - -

Fauji Fertilizer Company FFC 106.0 145.0 Buy 16.4 17.8 18.0 6.5 6.0 5.9 3.4 3.0 2.7 10.6 13.2 13.2

Fatima Fertilizer

FATIM 28.2 39.0 Buy 6.3 4.7 3.9 4.5 6.0 7.2 0.7 0.7 0.6 8.9 6.6 5.7

Chemical

Engro Polymer & Chemicals EPCL 57.7 74.1 Buy 6.3 13.0 8.4 9.1 4.4 6.8 2.0 1.5 1.3 2.2 4.5 2.9

Oil & Gas

Oil & Gas Development Co. OGDC 91.0 185.0 Buy 23.3 22.1 22.0 3.9 4.1 4.1 0.6 0.5 0.5 7.4 8.2 8.2

Pak Oilfields POL 392.6 406.0 Buy 57.7 56.7 50.2 6.8 6.9 7.8 2.8 2.6 2.5 12.7 12.5 7.6

Pakistan Petroleum PPL 79.9 155.0 Buy 18.2 18.7 18.2 4.4 4.3 4.4 0.6 0.6 0.5 1.3 5.0 7.5

Hascol Petroleum

HASCO 7.8 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Attock Petroleum APL 331.7 406.8 Buy 10.1 43.0 40.2 32.7 7.7 8.2 1.8 1.5 1.4 2.7 4.9 6.1

Pakistan State Oil PSO 214.3 305.6 Buy (13.8) 47.0 32.7 n.a 4.6 6.6 0.9 0.7 0.7 - 5.6 6.3

Power

Hub Power Co. HUBC 75.1 168.0 Buy 20.1 40.1 48.7 3.7 1.9 1.5 1.2 0.9 0.8 - 9.9 -

K-Electric Co. KEL 3.8 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 39.3 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Cable & Electrical Goods

Pak Electron Ltd PAEL 31.4 48.1 Buy 0.1 2.7 4.2 349.5 11.4 7.4 0.4 0.4 0.4 - 3.8 5.7

Personal Goods

Nishat Mills NML 97.0 132.0 Buy 10.0 13.7 14.4 9.7 7.1 6.7 0.5 0.5 0.4 4.1 5.7 6.7

Nishat Chunian Ltd. NCL 51.0 61.7 Buy 1.1 25.6 14.7 46.2 2.0 3.5 0.8 0.7 0.7 2.0 8.5 8.5

Banks

Allied Bank Limited ABL 71.9 109.8 Buy 16.0 12.5 13.6 4.5 5.7 5.3 0.7 0.6 0.6 11.1 12.5 12.5

Bank Al Habib BAHL 69.0 91.5 Buy 16.2 16.4 16.9 4.3 4.2 4.1 0.9 0.8 0.8 6.5 8.7 8.7

Bank AlFalah BAFL 32.4 51.9 Buy 6.1 7.1 6.5 5.3 4.5 5.0 0.6 0.5 0.5 12.3 12.3 12.3

Habib Bank Limited HBL 129.7 174.6 Buy 21.1 25.7 24.2 6.2 5.0 5.4 0.7 0.7 0.6 3.3 6.2 6.2

Habib Metropolitan Bank HMB 42.0 56.8 Buy 11.5 11.4 10.6 3.7 3.7 3.9 0.7 0.6 0.6 10.7 9.5 8.3

MCB Bank Limited MCB 163.0 239.6 Buy 24.8 24.3 26.9 6.6 6.7 6.1 1.0 1.0 0.9 12.3 12.0 12.3

Meezan Bank Limited MEBL 140.7 137.0 Sell 17.6 17.6 18.1 8.0 8.0 7.8 2.4 2.2 1.9 4.7 5.7 5.7

National Bank of Pakistan NBP 34.1 50.4 Buy 14.4 13.4 12.8 2.4 2.5 2.7 0.3 0.2 0.2 - - 14.7

United Bank Ltd UBL 129.5 142.5 Buy 17.0 18.4 20.1 7.6 7.0 6.4 0.8 0.7 0.7 9.3 9.3 9.3

Bank of Punjab BOP 8.13 13.9 Buy 2.6 1.8 1.9 3.1 4.5 4.3 0.4 0.4 0.4 12.4 12.4 12.4

8


13 August 2021

StockSmart


AKD Universe Coverage Cluster’s Performance


Stocks Symbol Price 1 Year 1 Year

13-Aug-21 1M 3M 6M 12M CYTD High Low

KSE-100 Index 47,169.84 -0.7 4.4 3.0 28.8 7.8 48,726.1 39,072.5

Automobile and Parts

Indus Motors INDU 1,324.79 10.2 18.3 17.4 15.8 13.4 1346.23 967.34

Pak Suzuki Motors PSMC 350.74 0.5 34.5 27.4 87.5 45.0 362.91 179.34

Cements

DG Khan Cement DGKC 105.18 -8.6 -5.3 -19.8 2.1 -8.2 141.48 101.07

Lucky Cement LUCK 856.55 -2.8 -2.5 8.4 65.9 23.1 940.74 597.86

Maple Leaf Cement MLCF 43.07 -6.2 1.0 -4.7 39.9 -4.3 49.25 34.18

Fauji Cement Company FCCL 21.62 -6.0 -5.0 -17.3 14.7 -0.2 27.21 18.69

Pioneer Cement Limited PIOC 116.93 -7.2 -5.4 -16.3 57.2 13.2 142.21 83.81

Cherat Cement Limited CHCC 163.15 -5.0 -2.6 -10.2 44.3 12.3 192.32 109.08

Engineering

Amrel i Steel Ltd ASTL 42.64 -2.1 13.5 -8.9 1.7 -11.6 53.46 36.75

Fertilizers

Engro Polymer Chemica ls EPCL 57.65 17.3 17.4 20.5 101.6 21.3 58.07 31.43

Engro Ferti l i zers Ltd. EFERT 76.09 3.4 12.0 20.5 37.8 20.3 77.38 53.29

Engro Chemica l ENGRO 296.08 -0.2 -2.1 -1.8 4.2 -3.7 319.90 272.76

Fatima Ferti l i zer FATIMA 28.16 0.1 8.1 -1.4 0.6 -3.2 31.88 25.98

Fauji Fert. Bin Qas im Ltd. FFBL 25.49 -7.5 -0.1 -2.7 67.8 0.7 29.15 15.37

Fauji Ferti l i zer Company FFC 106.01 -1.5 -1.9 1.0 3.4 0.9 110.10 96.92

Cable & Electrical Goods

Pak Elektron Limited PAEL 31.43 -8.9 1.7 -21.2 8.1 -21.7 42.38 29.79

Oil & Gas

Oi l & Gas Development OGDC 90.98 -3.5 -1.8 -16.2 -17.4 -12.3 115.89 87.11

Pak Oi l fields POL 392.61 0.0 9.0 -2.0 20.0 4.2 423.11 300.83

Pakis tan Petroleum Ltd. PPL 79.92 -6.4 -3.2 -11.4 -15.4 -11.5 103.64 78.85

Pakis tan State Oi l PSO 214.32 -4.7 -3.3 -11.9 26.3 1.9 253.36 180.71

Attock Petroleum Ltd. APL 331.72 1.6 0.5 -4.1 8.7 -0.2 382.27 305.52

Hascol Petroleum HASCOL 7.83 2.2 -12.1 -29.3 -45.4 -46.7 23.15 6.32

Power

Hub Power Co. HUBC 75.06 -4.4 -4.3 -15.0 9.5 -5.4 91.32 71.77

K-Electric Limited KEL 3.79 -2.8 2.7 -10.8 20.3 -3.1 4.69 3.55

Kot Addu Power Company KAPCO 39.25 -1.9 -3.2 -2.1 97.5 44.3 46.66 22.64

Personal Goods

Nisaht (Chunian) Ltd. NCL 51.01 0.4 10.4 2.9 47.0 21.2 54.91 34.64

Nishat Mi l l s NML 97.02 2.3 12.6 -17.0 16.6 -4.7 123.09 80.03

Banks

Al l ied Bank Limited ABL 71.90 1.2 4.3 -14.0 -8.0 -15.8 89.08 68.49

Bank AlHabib Limited BAHL 69.00 -1.2 1.4 1.5 32.8 5.9 74.45 58.08

Bank AlFa lah BAFL 32.44 1.5 2.6 1.0 1.2 -2.7 35.21 28.87

Habib Bank Limited HBL 129.68 0.6 2.1 -2.9 21.5 -2.0 143.20 113.60

Bank of Punjab BOP 8.13 -2.0 5.6 -9.8 -10.7 -12.3 10.27 7.65

Habib Metropol i tan Bank HMB 42.03 3.8 9.0 15.2 48.0 7.8 42.03 30.76

MCB Bank Limited MCB 163.00 2.9 -0.3 -3.9 7.7 -4.3 183.49 149.13

Meezan Bank Limited MEBL 140.66 15.4 30.2 28.1 111.1 34.7 140.66 74.08

National Bank of NBP 34.11 -3.2 3.9 -14.7 13.9 -20.6 43.88 30.47

United Bank Ltd UBL 129.51 4.4 5.4 0.1 16.8 2.9 143.68 106.46

Absolute Performance (%)

9


13 August 2021

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21

Monetary Rates

T-Bills - 3M % 6.99 n.a 7.17 7.15 7.14 n.a 7.17 7.58 7.40 7.34 7.31 7.26 7.24

T-Bills-6M % 7.18 n.a 7.20 7.20 7.18 n.a 7.49 7.80 7.68 7.55 7.57 7.54 7.48

T-Bills-12M % 7.15 n.a n.a 7.29 7.29 n.a 7.79 7.79 7.69 7.69 7.66 7.64 n.a

PIB10Y % 9.40 9.60 10.00 9.90 10.00 10.05 10.07 10.38 10.20 9.90 9.92 9.94 9.92

KIBOR6M % 7.20 7.30 7.10 7.10 7.10 7.10 7.30 7.53 7.52 7.43 7.47 7.37 7.35

Discount rate % 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 n.a

Policy rate % 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 n.a

Inflation

National CPI Inflation % 8.20 9.00 8.90 8.30 8.00 5.7 8.70 9.10 11.1 10.9 9.7 8.4 n.a

Core inflation (Urban) % 7.10 7.70 7.30 7.00 7.00 5.0 8.60 8.70 11.0 10.8 9.7 8.7 n.a

Core inflation (Rural) % 9.90 11.10 11.30 10.50 9.50 6.6 8.80 9.50 11.3 10.9 9.7 8.0 n.a

Food inflation (Urban) % 11.30 12.40 13.90 13.00 12.60 7.3 10.30 11.50 15.7 15.3 11.0 9.4 n.a

Food inflation (Rural) % 13.50 15.80 17.70 16.10 13.40 7.2 7.10 11.10 14.1 12.8 9.8 7.3 n.a

External Indicators

Export (PBS) US$(mn) 1,584 1,889 2,081 2,171 2,366 2,146 2,068 2,361 2,219 1,671 2,692 2,330 n.a

Import (PBS) US$(mn) 3,324 4,321 3,820 4,229 4,986 4,820 4,623 5,632 5,260 5,308 6,286 5,434 n.a

Trade Deficit (PBS) US$(mn) (1,740) (2,432) (1,739) (2,058) (2,620) (2,674) (2,555) (3,271) (3,041) (3,645) (3,594) (3,104) n.a

Export (SBP) 1,628 2,027 1,926 2,308 2,204 2,046 2,176 2,612 2,300 2,128 2497 n.a n.a

Import (SBP) 3,248 4,120 3,543 4,260 4,784 4,415 5,027 5,222 4,969 4,953 6322 n.a n.a

Trade Deficit (SBP) (1,620) (2,093) (1,617) (1,952) (2,580) (2,369) (2,737) (2,610) (2,669) (2,825) (3,825) n.a n.a

Home Remittances US$(mn) 2,095 2,284 2,284 2,339 2,437 2,274 2,266 2,725 2,778 2,491 2,688 2,764 n.a

Current Account US$(mn) 211 73 415 447 -652 -210 -31 -47 -188 632 -1,644 n.a n.a

Banking Sector

Deposits PkR(bn) 16,327 16,886 16,664 16,841 17,876 17,086 17,257 17,906 17,561 17,955 19,796 18,839 n.a

Advances PkR(bn) 8,053 8,094 8,116 8,166 8,497 8,467 8,527 8,600 8,665 8,811 8,996 8,878 n.a

Investments PkR(bn) 10,869 11,090 10,942 11,071 11,552 11,421 11,612 12,553 12,418 13,068 13,742 14,102 n.a

W.A.lending rate % 8.72 8.26 9.09 8.83 8.64 8.59 8.67 8.59 8.71 8.63 8.69 n.a n.a

W.A. deposit rate % 3.84 3.77 3.74 3.64 3.61 3.58 3.56 3.53 3.53 5.11 4.31 n.a n.a

Spread rate % 4.88 4.49 5.35 5.19 5.03 5.01 5.11 5.06 5.18 3.52 4.38 n.a n.a

Currency

Fx Reserves US$(mn) 19,908 19,385 19,399 20,267 20,512 20,149 20,076 20,604 22,690 23,273 24,396 24,717 n.a

USD PkR-Interbank PkR/USD 167.95 166.02 162.82 159.37 160.28 160.31 159.22 156.04 153.27 153.6 156.5 159.7 163.7

10

AKD Securities Limited StockSmart


DISCLOSURES & DISCLAIMERS Neither the information nor any opinion expressed herein constitutes an offer or a solicitation of an offer to transact in any securities or other financial instrument and is for the personal information of the recipient containing general information only. AKD Securities Limited (hereinafter referred as AKDS) is not soliciting any action based upon it. This report is not intended to provide personal investment advice nor does it provide individually tailored investment advice. This report does not take into account the specific investment objectives, financial situation/financial circumstances and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and imple-menting investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. AKDS recommends that investors independently evaluate particular investments and strategies and it encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. The securities or strategies discussed in this report may not be suitable for all investors, and certain investors may not be eligible to purchase or participate in some or all of them. Reports prepared by AKDS research personnel are based on public information. AKDS makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. Facts and views presented in this report have not been reviewed by and may not reflect information known to professionals in other business areas of AKDS including investment banking personnel. AKDS has established information barriers between certain business groups maintaining complete independence of this research report. This report has been prepared independently of any issuer of securities mentioned herein and not in connection with any proposed offering of securities or as agent of any issuer of any securities. Neither AKDS, nor any of its affiliates or their research analysts have any authority whatsoever to make any representation or warranty on behalf of the issuer(s). AKDS Research Policy prohibits research personnel from disclosing a recommendation, investment rating, or investment thesis for review by an issuer prior to the publication of a research report containing such rating, recommendation or investment thesis. We have taken all reasonable care to ensure that the information contained herein is accurate, up to date, and complies with all prevailing Pakistani legislations. However, no liability can be accepted for any errors or omissions, or for any loss resulting from the use of the information provided as any data and research material provided ahead of an investment decision are for information purposes only. We shall not be liable for any errors in the provision of this information, or for any actions taken in reliance thereon. We reserve the right to amend, alter, or withdraw any of the information contained in these pages at any time and without notice. No liability is accepted for such changes. Stock Ratings Investors should carefully read the definitions of all ratings used in each research report. In addition, research reports contain information carrying the analyst's view and investors should carefully read the entire research report and not infer its contents from the rating ascribed by the analyst. In any case, ratings or research should not be used or relied upon as investment advice. An investor's decision to buy, sell or hold a stock should depend on individual circumstances and other considerations. AKDS uses a three tier rating system: i) Buy, ii) Neutral and iii) Sell with total returns (capital upside + dividend yield) benchmarked against the expected one year forward floating (variable) risk free rate (10yr PIB) plus risk premium. Valuation Methodology To arrive at our period end target prices, AKDS uses different valuation techniques including: Discounted Cash Flow (DCF, DDM) Relative Valuation (P/E, P/B, P/S etc.) Equity & Asset return based methodologies (EVA, Residual Income etc.) Analyst Certification of Independence The analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report. The research analysts, strategists or research associates principally having received compensation responsible for the preparation of this AKDS research report based upon various factors including quality of research, investor client feedback, stock picking, competitive factors and firm revenues. Disclosure of Interest Area AKDS and the authoring analyst do not have any interest in any companies recommended in this research report irrespective of the fact that AKD Securities Limited may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment. Regional Disclosures (Outside Pakistan) The information provided in this report and the report itself 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 AKDS or its affiliates to any registration or licensing requirements within such jurisdiction or country. Furthermore, all copyrights, patents, intellectual and other property in the information contained in this report are held by AKDS. No rights of any kind are licensed or assigned or shall other-wise pass to persons accessing this information. You may print copies of the report or information contained within herein for your own private non-commercial use only, provided that you do not change any copyright, trade mark or other proprietary notices. All other copying, reproducing, transmitting, distributing or displaying of material in this report (by any means and in whole or in part) is prohibited. For the United States Compliance Notice. This research report prepared by AKD Securities Limited is distributed in the United States to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Decker & Co, LLC, a broker-dealer registered in the US (registered under Section 15 of Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Decker & Co, LLC in the US shall be borne by Decker & Co, LLC. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if AKD Securities Limited or Decker & Co, LLC is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Decker & Co, LLC and AKD Securities Limited are permitted to provide research material concerning investment to you under relevant applicable legislations and regulations.

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) [email protected] Executive Director Research Hamza Kamal +92 111 253 111 (634) [email protected] Commercial Banks, Economy Shahrukh Saleem, CFA +92 111 253 111 (685) [email protected] Cement & OMCs Sector AiIia Naeem +92 111 253 111 (603) [email protected] Fertilizer & Power Sector Mohsin Ali +92 111 253 111 (646) [email protected] Steel & Textile Saroash saleem +92 111 253 111 (646) [email protected] Autos Qasim Anwar +92 111 253 111 (680) [email protected] Technical Analysis Nasir Khan +92 111 253 111 (639) [email protected] Research Production Faisal Tufail +92 111 253 111 (647) [email protected] Research Production Tariq Mehmood +92 111 253 111 (643) [email protected] Library Operations

13 August 2021

New Rating Definitions

Buy > 14.5% expected total return (Rf: 8.5% + Rp: 6%)

Neutral > 8.5% to < 14.5% expected total return

Sell < 8.5% expected total return (Rf: 8.5%)

Indices KMI- 30 Allshare StockSmart Pakistan Weekly Update

Documents

Transcript of Indices KMI- 30 Allshare StockSmart Pakistan Weekly Update