for the period may 7, 2018 may 11, 2018 - bipl directthe benchmark index maintained a negative...
TRANSCRIPT
The Week in Review For the period May 7, 2018 – May 11, 2018
News This Week
Cement sales increase to 39mn tons in July-April
Motorbike assemblers raise prices
Engro Corp plans PKR2.5bn investment in Thar coal power project
Urea prices jacked up by PKR100/bag
Government to raise PKR150bn via floating rate-based Pakistan
Investment Bonds
SBP to raise PKR5.3trn through MTBs, PIBs in May-July
Cement companies directed to find alternative water resource
Trade deficit widens 14% to USD30.25bn in July-April
Expats send home USD16.257bn in July-April FY18
KSE-100 – A slump brought on by Trump
Stock Market Overview
The benchmark index maintained a negative momentum throughout the week settling down at 43,595pts, a decrease of 2.1%WoW, following Trump’s announcement to pull out from the Iran’s nuclear agreement. However, market participation picked up its pace in this week as evident from ADT and ADTV that increased by 0.9%WoW and 3.2%WoW, respectively. Additionally, foreign investors exhibited a net outflow of USD4.1mn.
IBFL, PICT, PPL, POL and EFERT were the major gainers while TRG, SNGP, SHFA, PAKT, and HMB were the major losers in the benchmark KSE-100 this week.
REP 039 BIPL Securities Limited 5thFloor, Trade Centre, I.I. Chundrigar Road, Karachi 1
www.jamapunji.pk
Market Review The benchmark index maintained a negative momentum throughout the week settling down at 43,595pts, a decrease of 2.1%WoW, following Trump’s announcement to pull out from the Iran’s nuclear agreement. However, market participation picked up its pace in this week as evident from ADT and ADTV that increased by 0.9%WoW and 3.2%WoW, respectively. Additionally, foreign investors exhibited a net outflow of USD4.1mn. During the week, APCMA released cement dispatches for Apr’18 that clocked in at 4.2mn MT, posting a growth of 18%YoY, where the capacity utilization for 10MFY18 clocked in at 98%. Furthermore, ENGRO disclosed its plan to invest PKR2.5bn in Siddiqsons Energy to set up a coal based power plant with an estimated stake of 17%. Also, fertilizer manufacturers jacked up urea prices by PKR100/bag following the withdrawal of subsidy in FY19. Moreover, Supreme Court directed the cement manufacturers in the vicinity of Katas Raj temple to find an alternate source of water in a period of 6 months. On the macro front, country’s foreign exchange reserves decreased to USD17.29bn, down by 3%WoW, owing to the external debt servicing. On top of this, country’s trade deficit also increased by 14%YoY in 10MFY18 to USD30.25bn compared to USD26.44bn in the corresponding period last year. Additionally, the government plans to finance the budget deficit for FY18 via auction of PKR5.3trn worth of MTB and PIBs in May-Jun’18. Furthermore, the federal government also announced to issue floating rate PIBs to raise PKR150bn to attract long-term investment from the corporate sector.
Outlook We believe the outcome of MSCI semi-annual review to dictate the direction of market. Furthermore, beginning of ramzan may shrink the activity in the market.
KSE-100 –A slump brought on by Trump
Date Open High Low Close Change Vol (mn)
7-May-18 44,546 44,763 44,322 44,379 -0.4% 131
8-May-18 44,364 44,440 43,926 44,067 -0.7% 154
9-May-18 44,164 44,249 43,387 43,795 -0.6% 192
10-May-18 43,877 44,139 43,735 43,856 0.1% 196
11-May-18 43,869 44,028 43,551 43,595 -0.6% 165
2 2
3
News This Week
Economic highlights & Data points
Foreign exchange: SBP's reserves fall 3% to stand at $11.2b | (Tribune): Foreign exchange reserves held by the State Bank of Pakistan (SBP) again came under pressure, shrinking 3% on a weekly basis, according to data released by the central bank on Thursday. The decrease in reserves was attributed to external debt servicing and other official payments. Trade deficit widens 14% to USD30.25bn in July-April | (The News ): Trade deficit widened 14% to USD30.245bn during the first 10 months of the current fiscal year of 2017/18, official data revealed on Thursday, although the government is optimistic that recovery in exports would ease pressure on external sector. Trade deficit amounted to USD26.436bn in the July-April period of the last fiscal year. SBP to raise PKR5.3trn through MTBs, PIBs in May-July| (The News): The central bank will auction PKR5.3trn worth of market treasury bills and Pakistan Investment Bonds (PIBs) in May-July to help the government finance budget deficit, the central bank said on Tuesday. Government to raise PKR150bn via floating rate-based Pakistan Investment Bonds | (The News): Government on Monday decided to issue for the first time floating rate Pakistan Investment Bonds to raise PKR150bn, which analysts said showed its ‘smart’ move to attract long-term debts on the prospects of high interest rates. Expats send home USD16.257bn in July-April FY18 | (The News): The amount of money sent home by Pakistani migrants living abroad increased in 10 months of the current fiscal year by 3.92% versus a year ago, the State Bank of Pakistan figures showed on Thursday. Remittances totaled USD16.257bn in July-April FY18, compared with USD15.643bn in the same period last year. In April, the figure was USD1.650bn. That was 6.9% lower than March 2018.
Sector and Corporate highlights
Cement sales increase to 39mn tons in July-April| (The News): Cement sales increased 15.1% to 39mn tons during 10MFY18 as infrastructure uplifts and recovery in exports boosted consumption of the commodity, officials data showed on Saturday. Engro Corp plans PKR2.5bn investment in Thar coal power project | (The News): Engro Corporation decided to invest around PKR2.5bn to acquire an estimated 17% stake in Siddiqsons Energy, which is setting up 330 megawatts of coal-run power plant in Sindh, an analyst said on Monday. Urea prices jacked up by PKR100/bag | (The News): Farmers on Monday expressed serious concerns after fertiliser manufacturers jacked up the price of urea by PKR100/50kg bag, apparently over the government’s failure to clear the unpaid subsidy worth around PKR20bn. This is a single major jump in the price of urea after about a similar but gradual increase of approximately PKR90/bag recorded between October 2017 and April 2018, registering almost 15% rise accumulatively in the cost of this major agriculture input. After the latest increase the urea will now be sold at around PKR1,500/bag. Cement companies directed to find alternative water resource | (Tribune): Analysts have termed the Supreme Court’s decision on Pakistan’s cement companies as a positive outcome, saying that contrary to market expectations, Bestway Cement Co and DG Khan Cement seemed to have escaped a harsher penalty. The comments come after the country’s top court ruled that Bestway Cement and DG Khan Cement will find an alternate source of water. The two companies also deposited Rs2 billion as security deposit, and agreed to pay for the water they use from now on.
Motorbike assemblers raise prices| (Dawn): Japanese and Chinese bike assemblers have again increased prices citing falling rupee against the dollar, which has pushed up cost of imported parts. Pak Suzuki Motor Company Ltd (PSMCL) has notified second price hike in various models effective from May 1, while the maker of Yamaha has raised the price first time this year.
4
Stock Market – Last week in pictorals
Chart 1: KSE-100 Index
Source: PSX
Chart 2: KSE Advance/Decline Ratio
Source: PSX
Chart 3: Pak Foreign Portfolio Flows (US$mn; US$=PKR115)
Source: NCCPL
Chart 4: KSE- Volumes & Values
Source: PSX
Chart 5: Price to Money Ratio
Source: NCCPL
Chart 6: Off market activity
Source: PSX
Economy Watch
Chart 7: Revenue Collection (PKRbn)
Source: SBP
Chart 8: Forex Reserves (US$mn)
Source: SBP
Chart 9: Import & Export (US$mn)
Source: SBP
Chart 10: Foreign Exchange Rate (PKR/US$)
Source: SBP
Chart 11: 6-mth T-Bill Yield (%)
Source: SBP
Chart 12: Yield Curve (%)
Source: SBP
5
Stock Market Synopsis Last week This Week %Change 1M 3M 12M
Mkt. Cap (US $ bn) 79.4 77.6 -2.3% 82.2 82.3 96.7
Avg. Dly T/O (mn. shares) 165.9 167.4 0.9% 178.8 192.2 195.3
Avg. Dly T/O (US$ mn.) 55.0 56.7 3.2% 65.5 72.1 87.5
No. of Trading Sessions 4.0 5.0 0.0 22.0 64.0 250.0
KSE 100 Index 44,536.9 43,594.8 -2.1% 46,486.5 43,808.8 51,426.0
KSE ALL Share Index 32,259.2 31,586.0 -2.1% 33,261.6 31,656.2 35,194.2
Chart 13: KSE-100 Active Issues (ADTO-million shares)
Source: PSX
Chart 14: KSE-100 Least Traded Issues (ADTO- shares)
Source: PSX
Chart 15: KSE-100 Top Gainer (% change)
Source: PSX
Chart 16: KSE-100 Top Losers (% change)
Source: PSX
6
Disclaimer
This research report is for information purposes only and does not constitute nor is it intended as an offer or solicitation for the purchase or sale of securities or other financial instruments. Neither the
information contained in this research report nor any future information made available with the subject matter contained herein will form the basis of any contract. Information and opinions contained
herein have been compiled or arrived at by BIPL Securities Limited from publicly available information and sources that BIPL Securities Limited believed to be reliable. Whilst every care has been taken in
preparing this research report, no research analyst, director, officer, employee, agent or adviser of any member of BIPL Securities Limited gives or makes any representation, warranty or undertaking,
whether express or implied, and accepts no responsibility or liability as to the reliability, accuracy or completeness of the information set out in this research report. Any responsibility or liability for any
information contained herein is expressly disclaimed. All information contained herein is subject to change at any time without notice. No member of BIPL Securities Limited has an obligation to update,
modify or amend this research report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or
subsequently becomes inaccurate, or if research on the subject company is withdrawn. Furthermore, past performance is not indicative of future results.
The investments and strategies discussed herein may not be suitable for all investors or any particular class of investor. Investors should make their own investment decisions using their own
independent advisors as they believe necessary and based upon their specific financial situations and investment objectives when investing. Investors should consult their independent advisors if they
have any doubts as to the applicability to their business or investment objectives of the information and the strategies discussed herein. This research report is being furnished to certain persons as
permitted by applicable law, and accordingly may not be reproduced or circulated to any other person without the prior written consent of a member of BIPL Securities Limited. This research report may
not be relied upon by any retail customers or person to whom this research report may not be provided by law. Unauthorized use or disclosure of this research report is strictly prohibited. Members of
BIPL Securities and/or their respective principals, directors, officers, and employees and their families may own, have positions or affect transactions in the securities or financial instruments referred
herein or in the investments of any issuers discussed herein, may engage in securities transactions in a manner inconsistent with the research contained in this research report and with respect to
securities or financial instruments covered by this research report, may sell to or buy from customers on a principal basis and may serve or act as director, placement agent, advisor or lender, or make a
market in, or may have been a manager or a co-manager of the most recent public offering in respect of any investments or issuers of such securities or financial instruments referenced in this research
report or may perform any other investment banking or other services for, or solicit investment banking or other business from any company mentioned in this research report. Investing in Pakistan
involves a high degree of risk and many persons, physical and legal, may be restricted from dealing in the securities market of Pakistan. Investors should perform their own due diligence before investing.
No part of the compensation of the authors of this research report was, is or will be directly or indirectly related to the specific recommendations or views contained in the research report. By accepting
this research report, you agree to be bound by the foregoing limitations.
BIPL Securities Limited and / or any of its affiliates, which operate outside Pakistan, do and seek to do business with the company(s) covered in this research document. Investors should consider this
research report as only a single factor in making their investment decision. BIPL Securities Limited prohibits research personnel from disclosing a recommendation, investment rating, or investment
thesis for review by an issuer/company prior to the publication of a research report containing such rating, recommendation or investment thesis.
BIPL Securities Limited endeavors to make all reasonable efforts to disseminate its publication to all eligible clients in a timely manner through either physical or electronic distribution such as mail, fax
and/or email. Nevertheless, not all clients may receive the material at the same time.