Morning Briefing February 14, 2013

Market Summary Market P/E 7.7

Equities

KSE 100

13/02/13 17,696

12/02/13 17,611

Change 85.05

International Markets

Current Daily 1 mnth 3 mnth 1 YearKSE 100 17,696 0.5% 5.7% 9.6% 43.7%BSE 30 19,608 0.2% -1.6% 6.2% 9.9%Dow 13,983 -0.3% 3.5% 11.5% 8.6%S&P 500 1,520 0.1% 3.4% 12.3% 12.6%FTSE 6,359 0.3% 4.1% 12.0% 7.8%NIKKIE 11,251 -1.0% 3.5% 27.4% 24.3%HangSeng 23,215 0.0% -0.5% 10.0% 11.0%

Currency Parity

Current Daily 1 mnth 3 mnth 1 YearPKR/USD 98.11 0.0% -0.7% 1.8% 8.1%PKR/YEN 1.04 0.0% -4.6% -14.8% -10.3%PKR/EUR 131.13 -0.2% 0.7% 7.2% 9.9%

Commodities

Current Daily 1 mnth 3 mnth 1 YearGold (PKR) 53,357 0.2% -0.1% -0.7% 6.2%WTI Crude 97.13$ -0.5% 3.4% 13.5% -3.6%

Portfolio Investment Summary 1 USD / PKR = 98FIPI/LIPI Gross Buy Net Flow

(USD mn) (USD mn)Foreign Investors 4.48 0.19Individuals 42.44 (0.85)Companies 30.34 1.33Banks / DFI 6.44 (3.24)NBFC 0.89 0.41Mutual Funds 6.54 2.08Other 1.77 0.08

Major Economic IndicatorsForex Reserves Feb 01'13 USDbn 13.47

CPI- MoM Feb-13 1.67%

CPI- YoY Feb-13 8.07%

Imports 6MFY13 USDmn 2,090

Exports 6MFY13 USDmn 1,149

Trade Balance 6MFY13 USDmn -941

Remittances 6MFY13 USDmn 7,117

C/A Balance 6MFY13 USDmn 250

GDP Growth FY13E 3.7%

Real Interest Rate Dec-12 1.1%

SBP Policy Rate Dec-12 9.50%

GDR MCBS @ 2 Ord. Sh US$ 2.60

OGDC @ 10 Ord. Sh US$ 18.50

UBLA @ 4 Ord. Sh US$ 2.39

LKCA @ 4 Ord. Sh US$ 3.10

SCRA Net Flow (US$mn) Feb 12' 13 1.34

Bank Al Jazira (SR) 27.30

Syed Danish AliEquity Research & Economics

(1.68)

(29.01)(9.69)(0.48)(4.45)

(PKR bn)

4,429.82

4,405.75

(43.29)

24.06

Gross Sell(USD mn)

(4.29)

% Change

% Change

% Change

Turn over

All Shares

(mn)

262.0

236.3

25.63

Mkt Cap

All Shares

Politics & Economy

President Barack Obama announced that 34,000 troops about half the US force in Afghanistan will withdraw by early 2014, bringing the United States one step closer to wrapping up the costly, unpopular war. He renewed his pledge to a war-weary American public that the 66,000 remaining US troops in Afghanistan would move into a support role this spring.

• According to the State Bank it has been decided that the maximum spread allowed between buying and selling rates of foreign currencies in open market forex trade must not exceed 25 paisa, at any given time.

• The services sector trade deficit narrowed to 119.47 percent and reached to $260.13 million during July-December 2012 against the deficit of $1,336.09 million during same period of last financial year. According the data released by the Pakistan Bureau of Statistics, exports of services grew by 60.84 percent and reached to $4,161.12 million in first half of current financial year which was recorded at $2,587.13 million during the same period of last year.

• Government borrowing from scheduled banks continued upward trend in the first

seven months of the current fiscal year, as it experienced a sharp increase of Rs186 billion, or around 29 percent, over the same period last year, according to the State Bank.

• State Bank of Pakistan has rejected all bids for Pakistan Investment Bonds (PIBs)

of 3, 5 and 10 years tenor, while no bid was received for 20 years tenor bond. No bid was received from primary dealers banks for PIBs of 20 years maturity. The coupon rates for 3 years were 11.25, 5 years 11.50 and 10 years 12.00 per annum. The face value of the offered amount was Rs 12.950 billion while the realised amount was Rs 13.040 billion.

Fertilizer

• The first urea consignment of 27,500 tons imported by state-run grain trader, Saudi Basic Industries Corporation under the credit facility has reached Gwadar Port.

Oil & Gas

• The Oil Marketing Companies have proposed to the ministry of petroleum and natural resources an increase in the margins on regulated products by 25 paisas on petrol and one paisa per litre on high-speed diesel from the existing levels of Rs1.98 per litre and Rs1.76 per litre, respectively.

Textile

• Karachi Cotton Exchange raised its cotton spot rate by Rs150 per maund (37.324 kilograms) to Rs 6,250 per maund.

Others

• According to KSE notice Dr. Zafar Iqbal Qadir has been appointed as chairman of PTCL with effect from 13th February, 2013.

2

International

• Brent crude steadied on Wednesday, holding just below a nine-month high near

$119 per barrel on forecasts for a faster-than-expected growth in global oil demand this year, but easing tensions in Iran subdued prices. The U.S. Energy Information Administration (EIA) and the 12-member Organization of the Petroleum Exporting Countries increased their outlook for world oil consumption growth, citing increasing signs of a recovery in the global economy.

• Gold slipped below $1,650 an ounce in thin trading as investors hugged the sidelines ahead of a G20 meeting which is expected to give clues on currency policy. Gold suffered technical selling pressure this week, with prices sliding to their lowest in more than a month at $1,638.82 after breaching a succession of support levels.

• German industry sees economy growing by 0.7% this year

• Silver USD/t oz 31.18

Upcoming Economic Event s CY13 Date Events

• Feb 20th’13 T-Bill Auction

• Mar’13 CPI figures to be released

• Apr’13 Monetary Policy Statement