AKD Research research@akdsecurities.net

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Weekly Review

After posting a spectacular performance in the previous week (up 3.98% WoW), the market

lost some of its steam as profit taking dominated investor sentiment. The KSE-100 thus

closed the week at 33,268 points, down 2.47% WoW. Some key data released during the

week included: (i) cement numbers, where local dispatches declined by 19%YoY, but man-

aged to inch up 1.7%MoM as restrictions on the sector were eased down in Apr’20 as com-

pared the previous month and, (ii) exports plunging by 54% YoY to US$957mn in Apr’20 due

to order deferrals and cancellation in face of COVID-19. Major news flow impacting the mar-

ket during the week included: (i) Pakistan’s fiscal deficit slashing to 3.8% of GDP in 9MFY20

vs. 5% of GDP during the same period last year, (ii) slashing of all petroleum product prices

by up to PkR30/ltr, (iii) inflation clocking in at 8.5% in Apr’20, providing space for further cut

in interest rates, (iv) SBP governor detailing out the impact of lockdown on GDP growth,

ranging from -1.5% to -3%, depending on lockdown extension, (v) textile value chain al-

lowed to resume operations in Punjab, (vi) GoP promising to bear 40% of first loss to banks

on SME loans, and (vii) IPP inquiry commission put on ice for two months. Top gainers dur-

ing the outgoing week were: 1) SHEL (+26.5%WoW), 2) YOUW (+22.8%WoW), 3) IDYM

(+21.6%WoW), and 4) HMM (+17.1%WoW), whereas laggards during the week were: 1)

KTML (-15.1%WoW), 2) CHCC (-12.6%WoW) and 3) SERT (-12.2%WoW). Average daily trad-

ed shares during the week improved only slightly as Ramzan factor persisted (6.5%WoW) at

190.19mn shares, with volume leaders being: 1) HASCOL (93.15mn shares), 2) UNITY

(75.06mn shares), 3) MLCF (62.37mn shares), and 4) TRG (40.75mn shares).

StockSmart

AKD Equity Research / Pakistan

Pakistan Weekly Update

Important disclosures including investment banking relationships and analyst certification at end of this report. AKD Securit ies 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©2020 AKD Securities Limited. All rights reserved. The information provided on this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject AKD Securities or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this document constitutes a solicitation or offer by AKD Securities or its affiliates to buy or sell any securities or provide any investment advice or service. AKD Securities does not warrant the accuracy of the information provided herein.

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Pakistan Stock Exchange

REP-019

Find AKD research on Bloomberg

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With the result season behind us, market is likely to shift attention towards monetary policy statement, where a low inflation reading during Apr’20 allows room for further monetary

easing. Furthermore, market will continue to factor in phased easing of lockdown situation. Meanwhile, any newsflow with regards to Budget 2021 is also expected to be a key factor

over next two weeks.

9 May 2020

Outlook

Source: PSX & AKD Research

Source: PSX & AKD Research

Index & Volume Chart Universe Gainers & Losers Top-5 Volume Leaders

Symbol Volume (mn)

HASCOL : 93.15

UNITY : 75.06

MLCF : 62.37

TRG : 40.75

PAEL : 36.20

33,917

33,993

33,728

33,304

33,268

32,800

33,000

33,200

33,400

33,600

33,800

34,000

34,200

-

50,000

100,000

150,000

200,000

250,000

4-May 5-May 6-May 7-May 8-May

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Indic e s KSE- 10 0 KSE- 3 0

This week 33,268 14,620

Last week 34,112 15,082

Change - 2.47% - 3.06%

Indic e s KMI- 3 0 Allsha re

This week 54,099 23,682

Last week 55,529 23,938

- 2.58% - 1.07%

Mkt Ca p. PkRbn US$ bn

This week 6,306 39.36

Last week 6,377 39.81

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

This week 190.19

Last week 178.56

Change 6.5%

25,000

28,000

31,000

34,000

37,000

40,000

43,000

46,000

0

100

200

300

400

500

600

700

800

May-1

9

Jun

-19

Jul-

19

Sep-1

9

Oct-

19

Nov-

19

Jan

-20

Feb-2

0

Mar-

20

May-2

0

(Index)(share mn)

Volume in million (LHS) KSE-100 Index

-21.0%

-16.0%

-11.0%

-6.0%

-1.0%

4.0%

9.0%

14.0%

19.0%

24.0%

SH

EL

YO

UW

IDY

M

HM

M

UN

ITY

MLC

F

DG

KC

SE

RT

CH

CC

KT

ML

AKD Securities Limited

9 May 2020

StockSmart

Pakistan Weekly Update

This Week’s Daily Reports

2

Commodities: COVID-19 bludgeons demand – provides respite at home, (AKD Daily, May 08, 2020)

The unprecedented nature of COVID-19 outbreak, its human toll and economic fallout has developed into a test case for how uncertainty is prices by financial market, with commodities on the front-line of marking risks to global economic output.

In this regard global macro-economic growth (US/China GDP growth -4.8/-6.8% for 1QCY20), industrial output indicators (Global Services PMI down to 2008-9 recession levels) and leading indicators (OECD consumer confidence underwent steepest drop ever) have signaled a weak demand environment for at least CY20.

Apart from precious metals all major commodity classes we track are in the red YoY and except for Gold & Urea, are lower CYTD, with energy commodities undergoing drastic downsides and undergoing a period of pricing demand destruction from prolonged global recessionary phase.

Urea and Steel benchmarks witnessed some upside from China resuming industrial production, while FAO’s Food Price Index witnessed softening as sugar prices tanked.

The nature of trade risks are greatly mitigated by lower energy costs while material commodity price dips are also favorable in nature. Additionally, the quantum and scale of benefits for end consumers is dependent on resurging demand, i.e consumer demand recovering, despite eco-nomic slowdown (exacerbated by COVID-19). Any budgetary subsidies, targeted disbursements for FY21 would be welcome in this regard.

Pakistan Cements: COVID-19 dulls the edge of dispatch growth, (AKD Daily, May 07, 2020)

Local cement dispatches for Apr’20 declined by 19%YoY as COVID-19 related restrictions took their toll, but managing to increase slightly by 1.7%MoM as restrictions, compared to Mar’20, were eased for the sector during Apr’20. For 10MFY20, local demand has posted meager growth of 1.2%YoY.

Exports from North took a significant hit, declining by 99/98% YoY/QoQ as border controls were imposed due to COVID-19 outbreak while South’s exports were dented by restrictions in place at export destinations.

After a horrid 3QFY20, local players increased prices by PkR25-30/bag however authorities have asked for an explanation for the price increase (policy of scrutinizing pricing across indus-tries/goods) prompting some players to take back the announcement.

We maintain LUCK (TP: PkR637.7/sh—40.9% upside), DGKC (TP: PkR106.9/sh—32.3% upside) and MLCF (TP: PkR38.3/sh—45.5% upside) as our preferred play from the sector with LUCK being the safest play with a diversified portfolio, while MLCF and DGKC have manageable debt levels where cost saving measures are expected to significantly improve efficiency.

Pakistan Energy: Demand disruption dulls margins, (AKD Daily, May 06, 2020)

POL product cracks through to April’20 fell under headwinds of depressed demand amidst continuing crude price rout (April’20/FY20TD Arab light Average of US$20.3/56.9/bbl), as April’20 HSD/MS crack to Arab Light for the month averaged US$+7.2/-5.5/bbl standing below FY20TD average of US$+8.9/+US$1.4/bbl, where MS cracks have expectedly succumbed to the tremendous demand disruption following global COVID-19 induced measures

HSFO cracks improved 89%MoM but remained in the red, where global spread of COVID-19 and resulting disruptions (with spillovers for power consumption, marine fuels) have kept cracks in the red, while amongst major product spreads, MS crack to Arab Light fell 343%MoM to levels last seen during Jan-Feb’19, largely due to hindered demand dynamics likely prevail-ing through to June’20

Cratered demand expectations have crystalized over the month with significantly curtailed refining runs (MENA refiners undergoing maintenance, Indian/Korea refiners at 50-60% capaci-ty) and regional slowdown evident in Asian refined fuels markets witnessing depleted volumes (Singapore Gasoline volume for April’20 down to sixteen month low, 92RON down 56%MoM)

Re-iterating our stance on refiners remaining handicapped due to global demand on a reces-sionary trend, we remain apprehensive of the sector’s prospects for profitability. APL remains our top pick in the downstream space, while PSO faces some upsides from possible circular debt clearances in the near term.

May 08, 2020

May 07, 2020

May 06, 2020

May 04, 2020

Source: PSX & AKD Research

May 05, 2020

33,300

33,400

33,500

33,600

33,700

33,800

33,900

34,000

34,100

34,200

10

:15

10

:39

11

:02

11

:26

11

:50

12

:13

12

:37

33,200

33,300

33,400

33,500

33,600

33,700

33,800

33,900

10

:15

10

:38

11

:02

11

:26

11

:49

12

:13

12

:36

13

:00

13

:23

13

:47

33,800

33,890

33,980

34,070

34,160

34,250

34,340

34,430

10

:15

10

:40

11

:04

11

:29

11

:54

12

:19

12

:44

13

:08

13

:33

13

:58

33,700

33,780

33,860

33,940

34,020

34,100

34,180

34,260

10

:15

10

:40

11

:04

11

:29

11

:54

12

:19

12

:43

13

:08

13

:33

13

:58

33,500

33,600

33,700

33,800

33,900

34,000

34,100

34,200

10:1

5

10:3

8

11:0

2

11:2

6

11:4

9

12:1

3

12:3

6

13:0

0

13:2

3

13:4

7

AKD Securities Limited

9 May 2020

StockSmart

Pakistan Weekly Update

This Week’s Daily Reports

3

Pakistan OMCs: HSD shines in an otherwise depressing month, (AKD Daily, May 05, 2020)

Apr'20 volumetric offtake clocked in at 1.1mn tons, moving +5%MoM/-36%YoY with HSD leading the MoM increase (up 42%MoM) while curtailed FO, continued the YoY decline (down 75%YoY); MS declined by 36/20% YoY/MoM.

For 10MFY20, sales volume of 13.3mn tons fell 13%YoY exhausted by weak power demand (cumulative FO sales dip 31%YoY), where monthly average sales dropped to 167k tons vs. 243k tons during 10MFY19.

In terms of market shares, PSO/APL/HASCOL account for market shares of 36/9/8% during Apr'20 where a comparison with Apr'19 reveals decreasing share of APL/PSO by 1/8ppts while HASCOL increased market share by 1ppt.

Fluctuating international crude prices and ongoing lockdown is going to drive volumes where any easing would further prop up HSD demand however restrictions on individual movement will continue to hamper MS offtake.

APL (TP: PkR394.4/sh, 46% upside – Buy) is our preferred long term play as the company continues to maintain a stable market share, protected from adverse effects on its balance sheet due to COVID-19. On the other hand, PSO (TP: PkR203.5, 30% upside – Buy) can turn out to be a high beta play in near term particularly with expectations of further monetary easing while issue of Sukuk-II also expected in near term.

Pakistan Strategy: Learning to live with COVID-19, (AKD Daily, May 04, 2020)

Effectively building sentiment buffers to counter negativity from COVID-19, equity markets welcomed major reforms and policy actions undertaken (construction package, surprise rate cut, concessionary financing) pushing the KSE-100 index up 16.7%MoM, its highest monthly move up since March’09 and arresting two consecutive months of declines

Market liquidity tapered, with KSE-100/All average traded volumes receding 9.9/6.9%MoM (expected impact of reduced trading hours), while value traded during the month slipped 13%MoM to US$48.8mn as investors favored mainboard scrips (KSE-100 share of ready market volume at 77.2% vs. 75.1% 3MCY20 avg.)

FPI outflows continued to strengthen (in line with continued global EM sell-off), with Feb’20 recording net sell of US$68.9mn (taking CYTD outflows to US$207.2mn), where Mutual Funds (US$59.0mn), Insurance (US$19.4mn) and Companies (US$12.4mn) were net buyers. In terms of sectoral focus, FPI outflows were dominated by Banks (US$21mn), E&Ps (US$20mn) and Cement (US$14mn)

Sectoral moves were tethered to relief policies, with construction linked Cements (+55%MoM), Steel (+49%MoM) posting major recoveries, while mainboard OMCs (+31%MoM), E&Ps(+30%MoM) fared better on OPEC+ consensus over crude output discipline, while Banks(+11%MoM) benefitted from SBP concessions on booking bad debts

We re-iterate our stance on headline risk prevailing albeit at a slower clip, as seasonal slow-down from Ramzan relaxes risks, while investors pivot to reforms included in the upcoming budget. We advocate for a sell on strength, buy on dips approach in the immediate run while our preferred sectors include leveraged consumer plays (PAEL), Fertilizers (ENGRO) and OMCs (on circular debt/FX payment, PSO)

AKD Securities Limited

9 May 2020

StockSmart

Pakistan Weekly Update

4

Commodities

International Major Currencies

Source: Bloomberg

Source: Bloomberg

Major World Indices’ Performance

Source: Bloomberg

TRJ-CRB Index

Source: Bloomberg

PkR/US$ Trend

Source: Bloomberg

SPOT Units 8-May-20 30-Apr-20 WoW CYTD

TRJ-CRB Points 123.2265 117.1958 5.15% -33.67%

Nymex (WTI) US$/bbl. 23.91 18.84 26.91% -60.84%

ICE Brent US$/bbl. 27.76 23.7 17.13% -58.21%

N. Gas Henry Hub US$/Mmbtu 1.84 1.66 10.84% -11.96%

Cotton USd/Pound 63.9 66.5 -3.91% -18.44%

Gold US$/Tr.Oz 1718.39 1686.5 1.89% 13.26%

Sliver US$/Tr.Oz 15.497 14.9697 3.52% -13.19%

Copper US$/MT 5243.25 5160.25 1.61% -14.73%

Platinum US$/Oz 767.47 777.11 -1.24% -20.60%

Coal US$/MT 53.6 53.35 0.47% -32.75%

SPOT 8-May-20 30-Apr-20 Chg +/- WoW CYTD

Dollar Index 99.710 99.016 0.694 0.70% 3.45%

USD/PkR 159.775 160.850 -1.075 -0.67% 3.15%

USD/JPY 106.510 107.180 -0.670 -0.63% -1.93%

EUR/USD 1.083 1.096 -0.012 -1.10% -3.38%

GBP/USD 1.237 1.259 -0.022 -1.78% -6.69%

AUD/USD 0.652 0.651 0.001 0.11% -7.15%

NZD/USD 0.613 0.613 0.000 0.00% -9.09%

CHF/USD 0.972 0.965 0.007 0.68% 0.55%

CAD/USD 1.394 1.395 -0.001 -0.05% 7.30%

USD/KRW 1,220 1,219 1.400 0.11% 5.50%

CNY/USD 7.076 7.063 0.012 0.18% 1.62%

Country Bloomberg Code 8-May-20 30-Apr-20 WoW CYTD

Pakistan KSE100 Index 33,268 34,112 -2.47% -18.3%

Srilanka CSEALL Index 4,572 4,572 0.00% -25.4%

Thailand SET Index 1,266 1,302 -2.74% -19.9%

Indonesia JCI Index 4,597 4,716 -2.52% -27.0%

Malaysia FBMKLCI Index 1,382 1,408 -1.81% -13.0%

Philippines PCOMP Index 5,622 5,701 -1.38% -28.1%

Vietnam VNINDEX Index 814 769 5.80% -15.3%

Hong Kong HSI Index 24,230 24,644 -1.68% -14.0%

Singapore FSSTI Index 2,592 2,624 -1.23% -19.6%

Brazil IBX Index 32,914 34,007 -3.21% -32.4%

India SENSEX Index 31,643 33,718 -6.15% -23.3%

China SHCOMP Index 2,895 2,860 1.23% -5.1%

S&P SPX Index 2,881 2,912 -1.07% -10.8%

DJIA INDU Index 23,876 24,346 -1.93% -16.3%

NASDAQ Composite CCMP Index 8,980 8,890 1.01% 0.1%

UK UKX Index 5,936 5,901 0.59% -21.3%

Germany DAX Index 10,866 10,862 0.04% -18.0%

Qatar DSM Index 8,799 8,764 0.40% -15.6%

Abu Dhabi ADSMI Index 4,062 4,230 -3.99% -20.0%

Dubai DFMGI Index 1,923 2,027 -5.13% -30.5%

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

Oman MSM30 Index 3,484 3,539 -1.57% -12.5%

Saudi Arabia SASEIDX Index 6,629 7,113 -6.81% -21.0%

MSCI EM MXEF Index 897 925 -3.03% -19.5%

MSCI FM MXFM Index 452 449 0.70% -22.9%

134.0

139.0

144.0

149.0

154.0

159.0

164.0

169.0

174.0

May-1

9

Jun

-19

Jul-

19

Aug-1

9

Sep-1

9

Nov-1

9

Dec-1

9

Jan

-20

Feb-2

0

Mar-

20

May-2

0

100

110

120

130

140

150

160

170

180

190

200

May-1

9

Jul-19

Sep-1

9

Nov-1

9

Jan-2

0

Mar-

20

May-2

0

5

AKD Securities Limited

9 May 2020

StockSmart

Pakistan Weekly Update

Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

Average PIB and E/Y differential

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

-42%

-32%

-22%

-12%

-2%

8%

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Feb

-20

Mar

-20

Ap

r-2

0

May

-20

KSE-All Share Index AKD Universe

(6,591)

(2,108)

(3,131)

(3,963)

(2,028)

(7,000)

(6,000)

(5,000)

(4,000)

(3,000)

(2,000)

(1,000)

-

4-May-20 5-May-20 6-May-20 7-May-20 8-May-20

(US$'000)20.3

5.7

(4.7)

0.2

(7.4)

5.5

(1.2) (0.5)

(10.0)

(5.0)

-

5.0

10.0

15.0

20.0

25.0

Ind

ivid

uals

Com

panie

s

Ban

ks/D

FIs

NB

FC

s

Mu

tual F

un

ds

Oth

ers

Pro

p.

Tra

din

g

Insura

nce

0.60

0.90

1.20

1.50

1.80

2.10

2.40

Ma

y-19

Jun-1

9

Jul-1

9

Aug

-19

Oct-

19

Nov-1

9

Dec-1

9

Jan-2

0

Fe

b-2

0

Apr-

20

Ma

y-20

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Ma

y-1

9

Ju

n-1

9

Ju

l-1

9

Au

g-1

9

Se

p-1

9

Oc

t-1

9

No

v-1

9

De

c-1

9

Ja

n-2

0

Fe

b-2

0

Ap

r-2

0

Ma

y-2

0

KSE100

MSCI EM

MSCI FM

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

23.0%

25.0%

Fe

b-1

9

Ma

r-1

9

Ma

y-19

Jun-1

9

Aug

-19

Sep

-19

Nov-1

9

Dec-1

9

Fe

b-2

0

Ma

r-2

0

Ma

y-20

Earning Yield PIB Yield

6

AKD Securities Limited StockSmart

Pakistan Weekly Update

Market PER Chart 2020

9 May 2020

AKD Universe Valuations

Source: AKD Research

Market P/BVS Chart 2020

Source: AKD Research

Jan-

08

Feb-

09

Mar

-10

May

-11

Jun-

12

Jul-1

3

Sep-

14

Oct

-15

Nov

-16

Jan-

18

Feb-

19

Apr-

20

6.5

5.5

4.5

3.5

(x)

Jan-

08

Feb

-09

Mar

-10

May

-11

Jun-

12

Jul-1

3

Sep

-14

Oct

-15

No

v-16

Jan-

18

Feb

-19

Ap

r-20

1.7

1.3

0.9

0.5

(x)

8-May-20 2016 2017 2018 2019 2020F

EPS (PkR) 6.87 5.82 6.47 6.54 7.97

EPS chg (%) 2.68 (15.24) 11.08 1.10 21.90

EPS chg (%) ex-E&P 18.11 (24.94) 6.38 (0.50) 27.90

Book Value per Share (PkR) 39.27 41.97 44.70 49.67 54.24

Payout (%) 50.22 55.90 49.82 50.39 46.56

Valuations

Price to Earnings (x) 5.83 7.75 7.01 6.30 5.26

PER (Ex-Banks & E&Ps) (x) 5.41 8.00 7.35 8.35 7.36

Price to Book (x) 1.13 1.07 1.01 0.91 0.84

Price to CF (x) 8.39 10.45 7.98 9.55 6.73

Earnings Yield (%) 17.16 12.90 14.27 15.87 19.01

Dividend Yield (%) 8.70 7.98 7.37 7.47 8.15

EV / EBITDA (x) 5.62 5.77 6.16 5.73 4.91

Profitability

Return on Equity (%) 17.49 13.87 14.47 15.34 14.48

Return on Assets (%) 3.10 2.25 2.29 2.44 2.36

Chg in Sales (%) (14.62) 16.05 17.88 21.52 7.40

Gross Margin (%) 35.20 36.08 35.19 34.18 33.04

Operating Margin (%) 23.23 25.00 24.49 24.14 22.91

Net Margin (%) 15.39 11.24 10.59 10.27 9.86

7

AKD Securities Limited StockSmart

Pakistan Weekly Update

AKD Universe Active Coverage Cluster’s Valuations

9 May 2020

Source: AKD Research

Stock Symbol Price TP Stance

(PkR) (PkR) 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F

*Automobile and Parts

Indus Motors INDU 959.81 1,375.00 Buy 174.49 68.34 102.62 5.50 14.04 9.35 1.88 1.74 1.56 12.00 2.60 4.20

Pak Suzuki Motors PSMC 161.75 130.00 Sell (35.45) (38.81) 1.73 n.a n.a 93.42 0.53 0.61 0.60 - - 0.31

Cements

DG Khan Cement DGKC 79.35 106.85 Buy 3.67 (7.94) 4.02 21.60 n.a 19.72 0.49 0.48 0.47 1.26 - 1.09

Lucky Cement LUCK 435.15 637.71 Buy 32.44 6.61 24.31 13.41 65.83 17.90 1.21 1.21 1.09 1.42 0.35 1.10

Maple Leaf Cement Factory MLCF 25.81 38.27 Buy 1.33 (4.23) 1.97 19.35 n.a 13.11 0.93 0.92 0.87 1.05 - 1.50

Fauji Cement Company Ltd. FCCL 16.81 18.98

Neutra 2.05 0.10 1.33 8.21 172.34 12.62 1.11 1.10 1.09 8.90 - 6.29

Pioneer Cement Limited PIOC 59.09 49.55 Sell 3.48 (7.54) (0.91) 16.98 n.a n.a 1.01 0.59 0.60 - - -

Cherat Cement Co Limited CHCC 80.49 69.14 Sell 9.98 (11.10) 1.66 8.07 n.a 48.43 1.21 1.48 0.95 1.24 - -

*Engineering

Amreli Steels Ltd. ASTL 35.08 49.00 Buy 0.11 0.29 2.74 317.43 121.45 12.80 0.85 0.85 0.80 - - -

Fertilizers

Engro Corporation ENGRO 303.73 331.10

Neutra 28.69 47.72 52.27 10.59 6.36 5.81 0.89 0.77 0.67 7.18 8.68 8.68

Engro Fertil izers Limited EFERT 60.63 49.60 Sell 12.63 10.17 8.26 4.80 5.96 7.34 1.87 1.80 1.78 21.25 14.63 13.03

Fauji Fert. Bin Qasim Ltd. FFBL 15.95 28.00 Buy (6.34) 1.90 2.22 n.a 8.39 7.20 1.89 1.75 1.61 - 5.83 6.83

Fauji Fertil izer Company FFC 106.94 134.70 Buy 13.45 16.45 17.26 7.95 6.50 6.19 3.96 3.52 3.09 9.73 11.63 11.63

Fatima Fertil izer FATIMA 22.00 34.40 Buy 7.54 5.98 4.67 2.92 3.68 4.71 0.63 0.57 0.53 9.55 10.68 8.41

Oil & Gas

Oil & Gas Development Co. OGDC 103.05 172.20 Buy 27.53 24.92 20.70 3.74 4.14 4.98 0.74 0.66 0.61 10.67 6.06 7.13

Pak Oilfields POL 314.39 379.00 Buy 59.44 55.58 44.63 5.29 5.66 7.04 1.90 1.68 1.54 15.90 11.11 10.15

Pakistan Petroleum PPL 89.90 143.40 Buy 27.18 20.27 17.05 3.31 4.44 5.27 0.78 0.72 0.65 - - 4.25

Hascol Petroleum HASCOL 14.89 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Attock Petroleum APL 274.28 394.40 Buy 39.79 17.16 32.45 6.89 15.98 8.45 1.39 1.42 1.25 7.78 3.28 7.40

Pakistan State Oil PSO 160.11 203.50 Buy 22.55 8.12 27.14 7.10 19.71 5.90 0.65 0.65 0.59 6.39 - 7.09

*Power

Hub Power Co. HUBC 78.44 159.96 Buy 9.37 15.99 20.74 8.37 4.91 3.78 2.58 1.88 1.57 - - 8.92

K-Electric Co. KEL 2.83 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 21.67 31.22 Buy 14.90 11.43 11.81 1.45 1.90 1.83 0.46 0.39 0.34 20.77 13.84 13.84

*Cable & Electrical Goods

Pak Elektron Ltd PAEL 22.50 18.30 Sell (1.16) 0.58 3.24 n.a 38.89 6.95 0.37 0.38 0.37 2.51 5.02 7.03

*Personal Goods

Nishat Mills NML 74.58 165.51 Buy 16.66 12.80 16.13 4.48 5.83 4.62 0.33 0.32 0.30 6.01 7.51 9.76

Nishat Chunian Ltd. NCL 30.53 60.53 Buy 13.19 5.87 7.08 2.31 5.20 4.31 0.48 0.45 0.42 12.57 7.07 8.64

Banks

Allied Bank Limited ABL 75.73 88.90 Buy 12.65 13.70 12.40 5.99 5.53 6.11 0.74 0.71 0.69 10.56 11.89 13.21

Bank Al Habib BAHL 55.08 65.00 Buy 10.07 9.10 9.10 5.47 6.05 6.05 0.99 0.87 0.80 6.35 7.26 6.61

Bank AlFalah BAFL 30.39 48.90 Buy 7.35 6.10 6.70 4.13 4.98 4.54 0.60 0.57 0.53 13.16 13.16 16.45

Habib Bank Limited HBL 95.58 154.40 Buy 10.45 16.10 15.40 9.14 5.94 6.21 0.62 0.58 0.54 5.23 6.28 7.32

Habib Metropolitn Bank HMB 28.09 45.70 Buy 6.34 7.30 6.80 4.43 3.85 4.13 0.63 0.54 0.49 8.90 9.04 9.66

MCB Bank Limited MCB 155.66 185.40 BUY 20.14 18.50 19.30 7.73 8.41 8.07 1.08 1.03 0.95 10.92 10.92 10.92

Meezan Bank Limited MEBL 64.55 124.60 Buy 12.12 14.60 15.60 5.33 4.42 4.14 1.32 1.13 0.98 7.75 9.30 9.30

National Bank of Pakistan NBP 27.42 45.60 Buy 7.79 10.50 11.80 3.52 2.61 2.32 0.23 0.21 0.19 - - -

United Bank Ltd UBL 105.00 167.20 Buy 15.60 18.90 18.40 6.73 5.56 5.71 0.67 0.62 0.59 11.43 11.43 14.28

The Bank Of Punjab BOP 9.07 13.90 Buy 3.09 2.80 3.00 2.97 3.86 3.64 0.51 0.46 0.42 8.27 13.92 16.71

UR - Under Review *earnings estimates are subject to revision due to COVID-19

EPS(PkR) PE(x) PB(x) DY(%)

8

AKD Securities Limited

9 May 2020

StockSmart

Pakistan Weekly Update

AKD Universe Coverage Cluster’s Performance

Source: PSX & AKD Research

Stocks Symbol Price 1 Year 1 Year

8-May-20 1M 3M 6M 12M CYTD High Low

KSE-100 Index 33,267.69 3.9 -17.1 -0.6 -5.0 -18.3 43,218.7 27,228.8

Automobile and PartsIndus Motors INDU 959.81 28.2 -7.8 -6.4 -24.9 -17.4 1278.50 721.99Pak Suzuki Motors PSMC 161.75 16.2 -26.7 -4.4 -36.3 -29.9 310.11 125.42

CementsDG Khan Cement DGKC 79.35 3.9 19.4 31.8 16.7 6.8 87.90 42.31Lucky Cement LUCK 435.15 5.6 -7.2 17.0 21.2 1.6 566.47 305.00Maple Leaf Cement MLCF 25.81 8.1 18.3 45.4 5.9 11.5 30.74 13.79Fauji Cement Company FCCL 16.81 7.3 5.5 12.2 -1.2 8.0 18.69 11.90Pioneer Cement Limited PIOC 59.09 56.6 114.8 147.9 157.8 93.8 63.79 17.37Cherat Cement Limited CHCC 80.49 6.7 56.0 151.7 104.4 51.7 96.16 24.78Gharibwal Cement GWLC 17.41 14.9 41.4 76.8 60.2 27.7 18.95 8.19

EngineeringAmreli Steel Ltd ASTL 35.08 11.9 6.1 28.3 25.0 -2.9 41.61 15.83

FertilizersEngro Fertil izers Ltd. EFERT 60.63 8.6 -8.1 -12.1 -8.3 -17.4 78.57 51.00Engro Chemical ENGRO 303.73 8.8 -9.1 10.7 11.6 -12.0 366.00 234.78Fatima Fertil izer FATIMA 22.00 -5.4 -11.0 -14.5 -13.6 -17.3 30.00 20.82Fauji Fert. Bin Qasim Ltd. FFBL 15.95 10.4 -12.0 -3.6 -35.5 -18.3 25.32 11.90Fauji Fertil izer Company FFC 106.94 11.7 1.2 10.7 8.0 5.4 111.79 83.10

Food ProducersFrieslandcampins Engro FCEPL 65.99 10.9 -3.1 1.1 21.1 -19.0 86.18 43.98

Cable & Electrical Goods

Pak Elektron Limited PAEL 22.50 3.6 -11.0 18.0 1.6 -16.9 29.50 14.32

Oil & GasOil & Gas Development OGDC 103.05 8.8 -20.2 -17.8 -23.8 -27.6 154.21 78.26Pak Oilfields POL 314.39 6.3 -23.1 -16.6 -19.8 -29.6 473.43 241.11Pakistan Petroleum Ltd. PPL 89.90 4.0 -31.7 -34.5 -42.6 -34.4 170.50 74.09Pakistan State Oil PSO 160.11 13.3 -16.5 -6.6 -8.0 -16.5 216.54 114.47Attock Petroleum Ltd. APL 274.28 5.0 -16.0 -9.9 -19.3 -25.8 394.43 219.13Hascol Petroleum HASCOL 14.89 -1.7 -35.3 -42.5 -82.2 -44.6 83.84 10.92

PowerHub Power Co. HUBC 78.44 -0.1 -17.5 8.2 13.9 -16.0 103.21 57.38K-Electric Limited KEL 2.83 -2.4 -32.6 -30.1 -32.6 -35.2 4.77 2.71Kot Addu Power KAPCO 21.67 2.2 -20.7 -38.5 -44.1 -31.3 40.13 16.26

Personal Goods

Nisaht (Chunian) Ltd. NCL 30.53 -3.1 -32.1 -16.8 -27.5 -28.4 47.63 23.78Nishat Mills NML 74.58 11.5 -28.0 -16.9 -35.0 -29.7 117.81 53.00

BanksAllied Bank Limited ABL 75.73 -10.2 -19.9 -13.0 -26.2 -20.8 110.47 70.01Bank AlHabib Limited BAHL 55.08 -3.4 -30.9 -20.8 -31.5 -27.7 84.70 51.90Bank AlFalah BAFL 30.39 -22.3 -37.9 -31.1 -32.8 -33.5 52.99 30.13Habib Bank Limited HBL 95.58 -12.3 -39.0 -25.2 -25.0 -39.3 171.24 95.58Bank of Punjab BOP 9.07 5.1 -28.6 -7.6 -23.0 -19.9 14.13 7.01Habib Metropolitan HMB 28.09 -6.3 -28.4 -7.9 -29.5 -22.7 42.00 28.01MCB Bank Limited MCB 155.66 -0.2 -24.4 -9.0 -14.5 -24.0 224.53 133.01Meezan Bank Limited MEBL 64.55 -2.5 -34.7 -15.5 -30.5 -32.1 106.21 56.00National Bank of NBP 27.42 -5.2 -35.6 -22.4 -31.4 -36.7 46.30 25.53United Bank Ltd UBL 105.00 -5.8 -37.9 -25.9 -29.5 -36.2 181.96 89.44

Absolute Performance (%)

9

AKD Securities Limited

9 May 2020

StockSmart

Pakistan Weekly Update

Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

Monetary Rates

T-Bills - 3M % 10.84 11.54 12.39 12.93 13.43 13.43 13.43 13.43 13.43 13.53 13.43 13.1 n.a

T-Bills - 6M % 11 11.68 12.46 12.98 13.48 13.48 13.48 13.48 13.48 13.48 13.48 13.15 n.a

T-Bills - 12M % 11.1 11.81 12.6 13.1 13.6 13.6 13.6 13.6 13.6 13.2 13.6 13.26 n.a

PIB 10Y % 13.06 13.5 13.68 13.67 13.29 12.18 11.3 11.35 11.09 11.04 11.18 10.16 8.47

KIBOR 6M % 10.99 11.92 12.86 13.3 13.82 13.65 13.08 13.48 13.5 11.23 13.23 12.34 12.08

Discount rate % 11.25 12.75 13.75 13.75 13.75 13.75 13.75 13.75 13.75 13.75 13.75 12.0 10.0

Policy rate % 10.75 12.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 11.0 9.0

Inflation

National CPI Inflation % 8.3 8.4 8 8.4 10.5 11.4 11.0 12.7 12.6 14.6 12.0 10.2 8.5

Core inflation (Urban) % 7.0 7.2 7.3 8.2 8.5 8.4 7.7 7.5 7.5 7.9 8.0 7.4 7.7

Core inflation (Rural) % 6.8 6.8 6.7 7.8 8.8 8.8 8.6 8.4 8.1 9 9.4 9.4 9.8

Food inflation (Urban) % 8.3 9.0 7.5 7.9 11.9 15.0 13.7 16.6 16.7 19.5 15.2 13.0 10.4

Food inflation (Rural) % 9.3 9.7 9.1 9.3 12.6 15.0 14.6 19.3 19.7 23.8 19.7 15.5 12.9

External Indicators

Export (PBS) US$ (mn) 2,094 2,102 1,717 1,894 1,859 1,769 2,024 2,011 1,993 1,970 2,140 1,814 957

Import (PBS) US$ (mn) 4,753 5,042 4364 4019 3658 3,785 4,074 3,940 4,037 4,037 4,185 3,316 3,088

Trade Deficit (PBS) US$ (mn) (2,659) (2,940) (2,647) (2,125) (1,799) (2,016) (2,050) (1,929) (2,044) (2,067) (2,045) (1,502) (2,131)

Export (SBP) 2,079 2,318 1800 2228 1,894 1,888 2,189 2,111 2,108 2,052 1,993 1,818 n.a

Import (SBP) 4,182 4,381 3997 4182 3,523 3,326 3,632 3,682 3,791 3,912 3,563 3,325 n.a

Trade Deficit (SBP) (2,103) (2,063) (2,197) (1,954) (1,629) (1,438) (1,443) (1,571) (1,683) (1,860) (1,570) (1,507) n.a

Home Remittances US$ (mn) 1,779 2,316 1,646 2,039 1,691 1,748 2,001 1,820 2,097 1,907 1,825 1,894 n.a

Current Account US$ (mn) (1,244) (1,089) (995) (678) (614) (284) 70 (364) (367) (534) (210) n.a n.a

Banking Sector

Deposits PkR (bn) 13,149 13,460 14,458 13,747 13,977 14,026 13,912 14,312 14,632 14,673 14,815 15,126 n.a

Advances PkR (bn) 7,860 8,022 8,097 7,991 7,994 7,975 8,019 8,095 8,158 8,164 8,212 8,259 n.a

Investments PkR (bn) 6,230 7,300 7,624 8,731 8,019 9,269 7,918 7,886 8,801 8,366 8,725 9,297 n.a

W. A. lending rate % 11.19 11.39 11.87 12.69 12.99 13.31 13.52 12.74 12.73 13.35 13.23 13.01 n.a

W. A. deposit rate % 5.81 5.34 5.71 6.18 6.47 6.52 6.69 6.73 6.65 6.95 7.00 6.91 n.a

Spread rate % 5.38 6.05 6.16 6.51 6.52 6.79 6.83 6.01 6.08 6.40 6.23 6.10 n.a

Public Finance

Tax collection PkR (bn) 277.60 330.10 508.40 277.30 298.60 383.10 n.a n.a n.a n.a n.a n.a n.a

Direct taxes PkR (bn) 78.50 112.00 251.00 95.90 88.00 165.30 n.a n.a n.a n.a n.a n.a n.a

Indirect Taxes PkR (bn) 199.10 218.10 257.40 181.40 210.60 217.80 n.a n.a n.a n.a n.a n.a n.a

Currency

Fx Reserves US$ (mn) 15,723 14,882 14,477 15,144 15,644 15,228 15,424 16,003 17,930 18,645 18,881 17,098 18,755

USDPkR - Interbank PkR/USD 141.33 146.17 156.41 159.19 158.24 156.33 156.04 155.40 155.01 154.74 154.34 159.02 164.43

10

AKD Securities Limited StockSmart

Pakistan Weekly Update

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AKD Research Team

Analyst Tel no. E-mail Coverage

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

Ali Asghar Poonawala +92 111 253 111 (646) ali.poonawala@akdsecurities.net E&Ps, Cable & Electrical & Automobiles

Hamza Kamal +92 111 253 111 (634) Hamza.kamal@akdsecurities.net Commercial Banks

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

Shahrukh Saleem +92 111 253 111 (685) shahrukh.saleem@akdsecurities.net Cement & OMCs Sector

AIlia Naeem +92 111 253 111 (603) ailia.naeem@akdsecurities.net Fertilizer & Power Sector

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

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

Faisal Tufail +92 111 253 111 (647) faisal.tufail@akdsecurities.net Research Production

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

9 May 2020

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%)