reports
- Syed Tahseen Jawed
Open End Mutual Funds Industry - Ad Oculos
Assets under Management (AUMs) for the Open End Mutual Fund Industry Increased by 4.6% MoM to PKR569bn as at Jan-19, driven by growth in Equity Funds due to equity market performance AUM’s for Conventional / Shariah Compliant Equity Funds stood at PKR137bn / PKR70bn, up 8.1%/10.5% MoM. Liquidity position (including investment in T-Bills) for both the categories combined declined from PKR15.2bn (8% of AUM’s) to PKR14.0bn (7% of AUM’s) Looking at the stock wise exposure, Conventional Equity ...
- Elixir Research
Pakistan Equity Market: Weekly Review - Index Closes Above 41k Mark on...
KSE100 Index continued to rally into 5th straight week led by foreign buying interest, particularly in Banking stocks. The Index gained 848pts (2.1%) during the week, taking 2019TD return to 10.9%. Market activity also remained elevated during the week with average daily traded volumes inching up by 3.8%WoW to 175mn shares. The index was mainly driven by Banks, Oil Marketing Companies (OMCs), Automobile Assemblers and Oil Exploration & Production Companies (E&Ps) contributing respective gains...
- Mohammad Zain-ul-Abedin
Elixir Grid - KSE100: Make or Break?
Bourse extended its rise for the fifth consecutive week with benchmark KSE100 Index closing on a buoyant note amid expanding turnover at 41,113 level. Overcoming multiple barriers i.e. daily 144 EMA (40,314) followed by a descending resistance at 40,700 level in the outgoing week further strengthened the near-term structure and pushed the Index higher to set an intra-day high of 41,211 on last Friday; however it settled marginally below its daily 233 EMA at 41,127 mark....
- Sharoon Ahmad
Pakistan Economy - Monetary Policy Tightening Continues
SBP announced its monetary policy yesterday where it decided to raise PR/DR by 25bps to 10.25%/10.75% against our and consensus expectation of status quo. SBP reasoned the need to continue monetary tightening as part of consolidation measures aimed at reining in high Twin Deficits and inflationary pressures...
- Sharoon Ahmad
Pakistan Economy - Status Quo Expected in Jan-19 MPS
We expect SBP to keep interest rates unchanged with DR/PR at 10.5%/10.0% in upcoming monetary policy as interest rate upcycle is likely to come to an end. Our expectation is underpinned on slowdown in inflation level, policy tightening causing decline in non-oil imports, REER having reached 101 and slowdown in LSM activity. Money market yields indicate expectation of 0-50bps hike in interest rate as 12M T-bills secondary market yields / 12M KIBOR have increased by 46bps/32bps since the las...
- Sharoon Ahmad
Flash Note: International Steels Limited - Tax Reversals Support Earni...
International Steels (ISL) announced its 2QFY19 result, where it posted PAT of PKR907mn (EPS: PKR2.09), down 23%YoY from PKR841mn (EPS: PKR2.71) in 2QFY18 owing to GM contraction and higher finance cost. While the earnings came in line with our expectation of PKR2.10/share, there were significant variations where topline exceeded our expectation, GM shrank significantly in comparison to our expectation of no change, finance cost was lower than our projection, and 4% tax reversal was booked l...
- Elixir Research
Pakistan Equity Market: Weekly Review - Foreign Buying Propels the Ind...
KSE100 Index rallied 958pts (2.4%) on the back of favorable announcements in Economic Reforms package by Finance Minister during the week. Market activity too improved with average daily traded value/volumes going up by 32%/43%WoW to USD53mn/168mn shares. In the recently announced Economic Reforms Packaged, the government introduced a number of measures to promote businesses which included reduction in Customs Duties on raw material and machinery imports, end of Super Tax for non-banking comp...
- Sharoon Ahmad
Pakistan Equity Market - Economic Reforms Package in Essence & Spirit
The government announced supplementary budget yesterday staying true to its words of offering incentives rather than proposing any major taxes. A number of measures to promote businesses were proposed which included reduction in custom duties on raw material and machinery imports, end of Supertax for nonbanking companies, abolishing tax on retained earnings, restoration of Group Relief, removal of withholding tax on cash transaction for filers, allowing non-filers to purchase cars up to 1,300...
- Sharoon Ahmad
International Steels Limited - 2QFY19 EPS Expected at PKR2.1
We expect ISL to post earnings of PKR915mn (EPS: PKR2.10) in 2QFY19, down 22%YoY but up marginally by 9%QoQ. Yearly decline in earnings is expected to be a result of decline in CRC dispatches, higher international HRC prices, PKR/USD depreciation, and higher finance cost. Whereas, expected sequential improvement is anticipated to be led by improved GC sales and decline in international HRC prices. On cumulative basis, earnings are expected to decline by 20%YoY to PKR1.76bn (EPS: PKR4.04). We ...
- Farheen Irfan
Honda Atlas Cars (Pakistan) Limited - 3QMY19 EPS to Remain Gloomy
We expect HCAR’s 3QMY19 EPS to clock in at PKR6.2, down 38%YoY and 14%QoQ – driven by contraction in GM, higher Admin Expenses and lower Other Income. The new import policy on Transfer of Residence, Personal Baggage and Gift Scheme has the potential to curtail annual imports from 84k in FY18 to 10-20k pa going forward. If the government does not reverse this policy and it’s implemented in its true spirits then this will lead to upside risks to our estimates – albeit limited as our projectio...
- Sharoon Ahmad
Pakistan Oilfields Limited - Expected Earnings Growth Driven by Low Ba...
We expect POL’s earnings to grow by 122%YoY/28%QoQ in 2QFY19 to PKR4.9bn (EPS: PKR17.4). Earnings growth is expected to be led by higher revenues on the back of relatively higher oil prices, PKR/USD depreciation, lower exploration expense and low base effect of last year attributable to PKR3bn reversal in gas revenues related to Tal Block. On cumulative basis, earnings are expected to be 85%YoY higher at PKR8.8bn (EPS: PKR31.0) in 1HFY19.
- Mohammad Zain-ul-Abedin
KSE100: Bulls Catching Their Breath
After peaking at 39,713 level on last Tuesday, the benchmark KSE100 Index nudged its way back down to test the ascending support at 38,780 level where it found a solid support that helped the Index bounce sharply and settle the outgoing week above 39,300 level. This has allowed the daily indicators to unwind from overbought levels, perhaps a sign that the bulls are simply catching their breath before taking the Index on another run higher...
- Sharoon Ahmad
Pakistan E&P Sector - Exploring Deep-water Frontiers
High hopes are pinned to deep-water exploration in Kekra-1 (Indus-G block) where Eni (operator of the block) has commenced drilling. Note that all previous 17 offshore exploration attempts have remained unsuccessful with the last one dating back to 2010. The success rate in high risk deep-water frontiers average 10-15% globally which is more relevant to potential success rate for local offshore explorations. If dry well is declared it would result in one-time dry well expense of PKR0.49/PKR0....
- Mohammad Zain-ul-Abedin
Elixir Grid - KSE100: Consolidating
The benchmark KSE 100 Index is essentially trying to consolidate after a sturdy rising thrust spurting the Index to 39,284 levels intra-day on last Friday but settling slightly lower at 39,049 mark. The daily studies show that the Index is now pivoting within the boundaries of 21 EMA (38,517) support and 55 EMA (39,176) resistance. For now our near-term outlook stays positive with supports developing around 38,800 and 38,516 (21 EMA) levels, however the consolidation period may persist for anoth...
- Syed Tahseen Jawed
Open End Mutual Funds Industry - Ad Oculos (December 2018)
Assets under Management (AUMs) for the Open End Mutual Fund (OEF) Industry declined by 5.7% MoM to PKR544bn as at Dec-18 - with Conventional / Shariah Compliant Equity Fund Categories declining by 10.7% / 11.2% owing to the rout in Equity Market. AUM’s for Conventional / Shariah Compliant Equity Funds stood at PKR127bn / PKR63bn as at the end of Dec-18. Liquidity position (including investment in T-Bills) for both the categories combined declined from PKR17.0bn (8% of AUM’s) to PKR15.2bn (8%...
- Sharoon Ahmad
Pakistan OMC Sector - After Shocks of Economic Policies
FO sales have tapered off rather rapidly than earlier anticipations falling down by 66%YoY in 1HFY19 owing to shift towards LNG/Coal based power generation. We believe that FO sales would continue at muted levels clocking in 3.3/2.6mntons during FY19 / FY20 and onwards. More surprising was HSD sales which too faced predicament with volumes declining by 21%YoY in 1HFY19 owing to rather significant slowdown in volumetric imports and intra-country trade. In this regard, we anticipate seasonal pi...
- Elixir Research
Pakistan Equity Market: Weekly Review - Riding the Tide of Foreign Inv...
KSE100 Index rallied 1,502pts (4.0%) during the week, kick starting on a high note with 1,014pts rally on Monday as Information Minister confirmed that talks with UAE were finalized for building oil refinery which is expected to bring Foreign Direct Investment (FDI) of around USD4-5bn. Market activity too improved during the week with average daily traded value/volumes going up by 12.3%/17.8%WoW to USD46mn/139mn shares. Regarding Khalifa Coastal Refinery (KCR), Bilal Pasha, Commercial Counsel...
- Mohammad Zain-ul-Abedin
Elixir Grid - Coal Heading for a Correction
Coal price (API 4, FOB Richards Bay 1M Future) extended its decline last week after topping at 98.45 level which also coincides with 61.8% Fib resistance (61.8% Fib of 104.15/87.90 descend). The weekly data below reveals that trouble is brewing in the commodity with price action falling below the immediate support at 93.17 (50% Fib of 87.90/ 98.45 ascend) setting its sight back on the former supports at 88/87 levels now....
- Mohammad Zain-ul-Abedin
Elixir Grid - KSE100: Oversold Momentum likely to Play Out
The benchmark KSE 100 Index seems to have found short-term support at 36,900/800 levels while indicators show obvious oversold signs on weekly time interval. There was indeed a sharp recovery albeit on low volumes at the start of the outgoing week however bulls gave way ahead of the range resistance at 38,450 level which also lines up with a daily 21 EMA, adding more to its strength as potential resistance. A quick pullback that left daily candle with long upper wick on Wednesday not only marked...
- Sharoon Ahmad
Pakistan Economy - REER Estimated to Have Reached 100.6 by Dec-18
To the surprise of many market participants, REER came off by only 1.6-2.1%MoM (IMF/SBP REER: 105.0/106.4) during Nov-18 despite 5.8%MoM depreciation in PKR/USD. This was attributable to average exchange rate used for estimating NEER and REER as average PKR/USD depreciated by just 1.5%MoM in Nov-18 which explains the deviation. Thus 4.2%MoM depreciation in average PKR/USD and 0.1-1.3% decline in RPI is expected to have taken REER to 100.6 by the end of Dec-18.
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