[ Morning Report ]

Monday, June 30, 2014

Market Overview
Karachi Stock Exchange (KSE) extended bullish momentum on Friday on account of
buying in selective stocks of foreigners. The benchmark KSE-100 index was up by
155.23 points to close at 29,343.76 points.

OGDC: Higher effective taxation gnaws profitability growth

In our today's morning report we would discuss the performance of Oil and Gas
Development Company (OGDC) in 9MFY14 and would recommend the investor over the
scrip.

3QFY14: Profitability down 30% QoQ

OGDC earn a profit after taxation (PAT) of Rs 23.71 billion (EPS: Rs 5.51) in 3QFY14 compared to Rs 33.63 billion (EPS: Rs 7.82) in 2QFY14, depicting decline of 30%. This was due
to higher effective tax rate of 40.3% in 3QFY14 against 24.3% in 2QFY14 along with lower
other income which decline by 56% QoQ.

9MFY14 earnings up 20% YoY

On back of better realized gas prices, surge in oil & gas production and increased contribution from other income, OGDC earn a profit after taxation (PAT) of Rs 90.93 billion (EPS: Rs
21.14) in 9MFY14 compared to Rs 75.67 billion (EPS: Rs 17.59) in 9MFY13, depicting surge
by 20.2%. Along with the corporate results company also announced a third interim cash
dividend of Rs 2.25/share for its shareholders. This totaled the overall cash dividend to Rs
6.25/share so far in FY14.

Net revenue up by 13%

Net sales of the company went up by 13% to Rs 190.36 billion versus Rs 169.09 billion in
9MFY13 due to higher gas realized prices and better oil and gas production.

Production growth remain favorable

The crude oil production up by 3% to reached 40,838 bpd during 9MFY14 from 39,822 bpd
in 9MFY13. Increase in production from Sinjhoro field and commencement of production
from Nashpa-4 & Jakhro field contributed to the higher overall oil production. Similarly, gas
production too remained higher as it surge by 4.3% to 1,152 mmcfd in 9MFY14 against
1,104 mmcfd in 9MFY13 primarily on account of increase in production from Uch,
Nandpur/Punjpir, Nashpa, Sinjhoro & Kunnar fields in conjunction with start-up of production from Maru-Reti & Jakhro fields

2 discovery hit in 9MFY14

During 9MFY14, company made two discoveries at Saand-1 exploratory well in Nim concession and Maru East-1 exploratory well in District Ghotki, both in Sindh Province. As per company estimates, both discoveries would yield 50.44 bcf of gas and 0.34 million barrels of
condensate in reserves.
Rs in million
9MFY14 9MFY13
Net Sales
190,362 169,091
Operating Expenses
33,254
27,966
Exploration Expenditure
6,747
8,950
Other Income
14,199
10,722
Profit after Taxation
90,938
75,671
EPS (Rs)
21.14
17.59
Source: Company Report & AZEE Research

YoY
12.6%
18.9%
-24.6%
32.4%
20.2%

3QFY14
64,192
12,940
1,922
2,079
23,711
5.51

2QFY14
63,754
10,005
2,870
4,695
33,638
7.82

OGDC is currently trading at a price of Rs 254.27/share offering an upside potential of 15.6%

from our Dec'14 target price of Rs 294/share.

FIPI (27-Jun-2014)
Local Companies (27-Jun-2014)
Banks / DFI (27-Jun-2014)
Mutual Funds (27-Jun-2014)
NBFC (27-Jun-2014)
Local Investors (27-Jun-2014)
Other Organization (27-Jun-2014)

Portfolio Investment U.S $ in million)

2.57
-1.30
-2.02
-2.40
0.22
3.17
-0.24

Yearly(Jul, 2013 up to 25-Jun-2014)

671.81

Monthly(Jun, 2014 up to 25-Jun-2014) 376.83

Daily (25-Jun-2014)

-3.73

Total Portfolio Investment (13-Jun-2014) 5501

1

OGRA in its summary has proposed increase in

all POL products. They said petrol would to go up
by 84 paisas, high octane blended component
(HOBC) by Rs 3.63, high-speed diesel (HSD) by Rs
27 paisas, Light Diesel Oil (LDO) by Rs 22 paisas,
kerosene oil by 30 paisas with start of next
month July.
In what is viewed as a political and financial victory, the federal government has offloaded its
5% stake in Pakistan Petroleum Limited on a premium of Rs15.3 billion.
The government is reviewing the possibility of
rehabilitating the Karachi-Lahore-Peshawar (MLI) railway track with Chinese assistance in an
effort to ship imported and domestic coal from
Sindh for generating about 8,000 megawatts of
electricity in Punjab. The rail link is part of mega
development schemes that will be discussed
with Chinese authorities during upcoming meetings in connection with the Pakistan-China
Economic Corridor, according to the Ministry of
Planning and Development.
Federal Textile Minister Abbas Khan Afridi has
asked the textile industry to switch to coal
instead of banking on gas as their main source of
energy as the latter is not only in short supply
but is also going to be expensive in coming years.

QoQ
0.7%
29.3%
-33.0%
-55.7%
-29.5%

Recommendation

NCCPL (U.S $ in million)

News Update

In what is viewed as a political and financial victory, the federal government has offloaded its
5% stake in Pakistan Petroleum Limited on a premium of Rs15.3 billion.

KSE Statistics
Indices
All Share Index
KSE-30TM Index
KSE-100TM Index
Turnover
All Share Index
KSE-30TM Index
KSE-100TM Index

June 27, 2014

21,796.51
20,153.79
29,343.76
146,186,790
50,009,000
99,707,260

[ Morning Report ]

Monday, June 30, 2014

Pivot Analysis

Board Meetings

Company

CR

RSI

Buy 1

Buy 2

Sell 1

Sell 2

Pivot

Company

DATE

Reliance Insurance Co. Ltd

KSE 100 INDEX

29343.76

Attock Cement

54.48

29,152 28,961

156.50

46.53

Adamjee Insurance

44.67

34.69

44.45

Askari Bank

19.04

55.99

Azgard Nine

5.99

43.70

584.85

64.34

Attock Petroleum
Attock Refinery

156.15 155.85

29,455

29,566

29,263

NI(U)T Fund

30-06-2014 10:30

NIT Government Bond Fund

30-06-2014 10:30

156.65

156.85

156.35

44.20

44.95

45.25

44.75

18.50

17.95

19.35

19.65

18.80

5.85

5.70

6.10

6.20

5.95

582.55 580.30

588.55

592.30

586.30

213.50

47.90

215.75

218.00

214.20

Bank Al-Falah

27.74

51.29

27.25

26.80

28.00

28.25

27.55

BankIslami Pak

9.99

41.32

9.90

9.85

10.00

10.05

9.95

Bank.Of.Punjab

8.93

42.35

8.70

8.50

9.10

9.25

8.85

Fauji Cement

19.32

50.36

19.15

19.00

19.60

19.85

19.40

Fauji Fert Bin

39.34

56.15

39.15

39.00

39.50

39.65

39.35

Fauji Fertilizer

111.47

49.99

111.00 110.50

111.95

112.45

111.50

Habib Bank Ltd

188.55

56.76

184.20 179.85

191.70

194.85

187.35

Hub Power

58.16

59.80

57.20

58.45

58.70

57.95

ICI Pakistan

390.21

61.25

379.50 368.75

396.50

402.75

385.75

Jah Siddiq Co

10.47

44.21

10.20

10.60

10.70

10.45

Lucky Cement

390.95

55.28

383.65 376.30

395.65

400.30

388.30

MCB Bank Ltd

300.71

54.83

299.25 297.75

302.60

304.45

301.10

Maple Leaf Cement

29.93

45.18

29.75

29.55

30.20

30.45

30.00

National Bank

61.99

58.72

61.40

60.80

63.00

64.00

62.40

2.22

35.93

2.20

2.15

2.30

2.35

2.25

Oil & Gas Dev. XD

254.27

62.94

245.70 237.10

259.65

265.05

251.10

P.S.O. XD

383.19

37.94

380.40 377.65

387.65

392.10

384.90

22.42

45.56

22.65

22.85

22.40

NIB Bank

Sui North Gas

211.95 210.40

57.70

10.35

22.20

21.95

CR = Yesterday's Closing Rate; RSI = 14 day RSI.

RSI Indication: Less than 30 Indicate oversold position & Greater than 70
Indicate overbought position.
Risk Disclosure
This report has been prepared by AZEE Securities (Pvt) Limited and the information contained in the Product is
intended solely for the recipient or attached skilled individuals of the firm. The Firm accepts no liability whatsoever
for the actions of individual, collateral or third parties in all over Pakistan and abroad as well. This report is provided solely for the information of professional advisers who are expected to make their own investment decisions
without undue reliance on this report and AZEE Securities (Pvt) Limited accepts no responsibility whatsoever for any
direct or indirect consequential loss arising from any use of this report contents. All rights reserved. The material
contained in this report is based on data obtained from sources we deem to be reliable and without prior written
permission this information is provided on an "as is" basis.

TIME

28-06-2014 11:30

NIT Income Fund

30-06-2014 10:30

Byco Petroleum Pakistan Ltd

30-06-2014 11:30

Shabbir Tiles & Ceramics Ltd

04-07-2014

9:30

Key Data
Money Market
T-Bills (3 Mths)
T-Bills (6 Mths)
T-Bills (12 Mths)
Discount Rate
Kibor (1 Mth)
Kibor (3 Mths)
Kibor (6 Mths)
Kibor (9 Mths)
Kibor (1 Yr)
P.I.B (3 Yrs)
P.I.B (5 Yrs)
P.I.B (10 Yrs)
P.I.B (15 Yrs)
P.I.B (20 Yrs)
P.I.B (30 Yrs)

11-Jun-2014
11-Jun-2014
11-Jun-2014
17-May-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014
26-Jun-2014

9.96%
9.98%
9.99%
10.00%
10.23%
10.17%
10.17%
10.43%
10.45%
12.01%
12.54%
12.94%
13.15%
13.25%
13.35%

Commodities
Crude Oil (brent)$/bbl
Crude Oil (WTI)$/bbl
Cotton $/lb
Gold $/ozs
Silver $/ozs
Malaysian Palm $
GOLD (PMEX) PKR
KHI Cotton 40Kg PKR

113.17
105.48
74.77
1,320.59
21.18
761
42,085
7,127

Contacts
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33, Ground Floor, Karachi Stock Exchange, Stock
Exchange Road, Karachi 74000, Pakistan.
Tel: 021-2473513-22
Fax: 021-2473519
Email: info@azeetrade.com
CALL: 111-AZE-AZE
URL: http://www.azeetrade.com
Email: info@azeetrade.com