The Week in Review

For the period Dec 31, 2018 – Jan 04, 2019

KSE-100 - Dull volumes at the bourse

News This Week 39,000
38,500
 New Year to bring additional PKR155bn tax burden
38,000
 Government cuts petrol price by PKR4.86 for January
37,500
 Revenue collection posts meagre 2% growth
 Circular debt rises to PKR755bn, PAC told 37,000
 ECC orders smooth delivery of urea to farmers 36,500
 Pak Suzuki Motor raises prices by up to PKR322K 36,000
 Inflation eases to 6.2% in December 35,500
 3rd tranche of USD1.0bn from Saudi Arabia likely this month Mon Tue Wed Thu Fri
 China acknowledges it’s extending financial help to Pakistan
 FBR estimates PKR24bn in revenue from POL products
 Foreign exchange: SBP reserves dip 2.28%, amount to USD7.29bn

Stock Market Overview

 Benchmark index remained volatile throughout the week where the index closed at 37,547pts, exhibiting an increase of
1%WoW. This was mainly led by the activity on Tuesday where newsflow related to China’s financial package worth
USD2.0bn alleviated concerns pertaining to external account and brought a sigh of relief across the board and the index
gained by 2.5%. Market participation increased throughout the week as evident from increase in ADT and ADTV by
5%WoW and 6%WoW, respectively. Foreign investors continued to remain net seller, exhibiting an outflow of USD0.51mn.
 BAHL, ATLH, BAFL, HUMNL and THAL were the major gainers while ATRL, MTL, NESTLE, HGFA, and SHEL were the major
losers in the benchmark KSE-100 this week.

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KSE-100 – Dull volumes at the bourse
Date Open High Low Close Change Vol (mn)
31-Dec-18 37,072 37,206 36,802 37,067 -1.4% 226
1-Jan-19 37,068 38,047 37,046 37,996 2.5% 97
2-Jan-19 38,047 38,449 37,710 37,795 -0.5% 134
3-Jan-19 37,801 37,928 37,374 37,542 -0.7% 68
4-Jan-19 37,565 37,815 37,475 37,547 0.0% 64

Market Review
Benchmark index remained volatile throughout the week where the index closed at 37,547pts, exhibiting an increase of
1%WoW. This was mainly led by the activity on Tuesday where newsflow related to China’s financial package worth USD2.0bn
alleviated concerns pertaining to external account and brought a sigh of relief across the board and the index gained by 2.5%.
Market participation increased throughout the week as evident from increase in ADT and ADTV by 5%WoW and 6%WoW,
respectively. Foreign investors continued to remain net seller, exhibiting an outflow of USD0.51mn.

During the week, the government decreased price of petroleum products where the rate for petrol and diesel slashed by
PKR4.86/ltr and PKR4.26/ltr, respectively. Additionally, circular debt increased to PKR755bn owing to higher transmission and
distribution losses and lower recovery rate. Moreover, Economic Coordination Committee approved the availability of urea
stock for the farmers and allocated 25mmcfd additional gas to SNGP to meet the current demand. Also, Pak Suzuki Motor
increased the price of different vehicle variants within a range of PKR30K – PKR322K. Furthermore, oil sales decreased by
32%YoY to 9.2mn MT in 1HFY19 driven by a decline in FO and HSD by 67%YoY and 22%YoY, respectively.

On the macro front, foreign exchange reserves of SBP plunged by USD150mn to USD7.3bn, down by ~2.3%WoW, owing to
debt repayment. In addition, as per the FBR, increase in sales tax on petroleum products to a uniform rate of 17% would
increase the revenue collection by PKR24bn. Furthermore, China pledged to lend USD2.0bn to provide relief to the country’s
dwindling foreign exchange reserves amid balance of payment crisis. Also, Saudi’s third tranche of USD1.0bn is expected to be
received during this month. Moreover, inflation for the month of December eased off to 6.2% as opposed to 6.5% in the
previous month owing to decline in prices of fruits and vegetables. Additionally, with a revenue shortfall of PKR170bn owing
to a meagre growth of 2%YoY in revenue collection for 1HFY19, the government is planning to impose additional PKR155bn
taxes in the form of increased custom duty and general sales tax.

Outlook
Since UAE’s prince is expected to visit Pakistan on Jan 6, we expect any positive developments pertaining to materialization of
USD3.0bn support package to be a key trigger for market. Furthermore, meeting with FATF scheduled next week in Sydney on
Terror Financing Assessment Report would also shape the sentiments of local and foreign participants.

2
 News This Week

Economic highlights & data points

New Year to bring additional PKR155bn tax burden| (The News): The New Year is expected to dawn with a heavy tax
burden for Pakistanis as the Federal Board of Revenue (FBR) is preparing a summary for imposition of an additional
PKR155bn taxes from January 2019.

Inflation eases to 6.2% in December| (Dawn): The country’s inflation clocked in at 6.2% in Dec 2018, according to
data released by the Pakistan Bureau of Statistics (PBS) on Wednesday.

3rd tranche of USD1bn from Saudi Arabia likely this month| (BR): Senate Standing Committee on Finance was
informed here Wednesday that the third loan tranche worth of USD1bn from Saudi Arabia was likely to be released
during current month.

China acknowledges it’s extending financial help to Pakistan| (The News): China on Wednesday tentatively
acknowledged it was extending financial assistance to help Pakistan boost its dwindling foreign exchange reserves.

FBR estimates PKR24bn in revenue from POL products| (The News): The Federal Board of Revenue (FBR) has
estimated PKR24bn in additional revenue from petroleum products during the second half of the current fiscal year of
2018/19 as a result of upward revision in sales tax rates.

Foreign exchange: SBP reserves dip 2.28%, amount to USD7.29bn| (Tribune): The foreign exchange reserves held by
the central bank shrank 2.28% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on
Thursday.

Sector and Corporate highlights

Oil sales plunge 32%| (Dawn): Pakistan’s overall oil sales plunged by 32% to 9.2mn tons in 1HFY19, led by a 67%
decline in furnace oil sales to 1.45mn tons.

Pak Suzuki Motor raises prices by up to Rs322K| (Tribune): Pak Suzuki Motor Company, a Japanese carmaker doing
business in Pakistan for decades, has increased prices by up to Rs322K for different vehicle variants, except for its
popular Mehran model, in a bid to pass the impact of rupee depreciation on to consumers.

ECC orders smooth delivery of urea to farmers| (Dawn): Amid rising prices despite subsidized imported stocks, the
Economic Coordination Committee (ECC) of the Cabinet on Tuesday directed the Ministry of Industries and Production
to chalk out a plan for continuous and smooth operation of urea plants in the country throughout the year.

Circular debt rises to PKR755bn, PAC told| (Dawn): The Ministry of Power Division on Tuesday informed the Public
Accounts Committee (PAC) that the amount of circular debt had reached Rs755 billion. The ministry’s secretary, while
giving a briefing to the committee, said presently the country’s installed capacity for electricity production was 33,836
MW, while the de-rated capacity was about 31,000MW.

Government cuts petrol price by PKR4.86 for January| (Dawn): The government on Monday announced a decrease
in petroleum prices for the month of January, slashing the rates of petrol and diesel by PKR4.86 and PKR4.26 per litre,
respectively. The price of kerosene oil has been reduced by PKR0.52 and that of light diesel oil (LDO) by PKR2.16 per
litre, a finance ministry statement said.

3
 Stock Market – Outgoing week in pictorals
Chart 1: KSE-100 Index Chart 2: KSE Advance/Decline Ratio
38,200 3.00

38,000
2.50
37,800
37,600 2.00
37,400
1.50
37,200
37,000 1.00
36,800
36,600 0.50

36,400
0.00
31-Dec 1-Jan 2-Jan 3-Jan 4-Jan
31-Dec 1-Jan 2-Jan 3-Jan 4-Jan
Source: PSX Source: PSX

Chart 3: Pak Foreign Portfolio Flows (US$mn; US$=PKR130) Chart 4: KSE- Volume & Value
5 Shrs mn PKRmn
3.4
2.7 250 12,000
1.8 1.9
2
10,000
200
0.6
0 8,000
(0.2) (0.4) 150
(1.3) (1.2) 6,000
-2
(2.2) 100
(2.9) 4,000
-5
(4.6) 50
2,000
-7
0 0
24-Dec 26-Dec 27-Dec 28-Dec
31-Dec 1-Jan 2-Jan 3-Jan 4-Jan
Inflow Outflow Net Volu me Value
Source: PSX Source: PSX

Chart 5: Price to Money Ratio Chart 6: Off market activity

90.0% PKRmn shrs ('000)
80.0% 1,000 20,000
900 18,000
70.0%
800 16,000
60.0% 700 14,000
50.0% 600 12,000
40.0% 500 10,000
30.0% 400 8,000
300 6,000
20.0%
200 4,000
10.0% 100 2,000
0.0% - -
Apr-12

Jul-13
Mar-10

Jun-11

Mar-15

Mar-17

Jun-18
Aug-10

Aug-15

Aug-17
May-14

May-16
Sep-12
Feb-13
Jan-11

Jan-18
Nov-11

Oct-16

Nov-18
Nov-09

Oct-14
Dec-13

Dec-15

24-Dec 26-Dec 27-Dec 28-Dec 21-Dec

Value Traded (PkRmn) Turnover ('000)
Source: PSX Source: PSX

4
 Economy Watch
Chart 7: Revenue Collection (PKRbn) Chart 8: Forex Reserves (US$mn)
420.0 30,000
370.0
25,000
320.0
270.0 20,000

220.0 15,000
170.0
10,000
120.0
70.0 5,000

20.0 -

Mar-13
Jul-13

Mar-14
Jul-14

Mar-15
Jul-15

Mar-16
Jul-16

Mar-17
Jul-17

Mar-18
Jul-18
Nov-15
Nov-12

Nov-13

Nov-14

Nov-16

Nov-17

Nov-18
Jan-15

Jan-16

Jan-17

Jan-18

Jul-18
Mar-17
Jul-15

Jul-16

Jul-17
Mar-15

Nov-15

Mar-16

Mar-18
Nov-14

Nov-16

Nov-17
Sep-14

May-15

Sep-15

May-16

Sep-16

May-17

Sep-17

May-18

Sep-18

-30.0

Source: PSX Source: PSX

Chart 9: Import & Export (US$mn) Chart 10: Foreign Exchange Rate (PKR/US$)
6,000
151.0
143.0
5,000
135.0
127.0
4,000 119.0
111.0
3,000 103.0
95.0
2,000 87.0
79.0
1,000 71.0
63.0
0 55.0
Jan-17

Apr-17

Oct-17

Jan-18

Apr-18

Oct-18
Dec-16

Dec-17

Dec-18
Mar-17

Jul-17

Mar-18

Jul-18
Jun-17

Nov-17

Jun-18

Nov-18
Feb-17

May-17

Aug-17
Sep-17

Feb-18

May-18

Aug-18
Sep-18
Import -Value Export - V alue
Source: PSX Source: PSX

Chart 11: 6-mth T-Bill Yield (%) Chart 12: Yield Curve (%)

12.00% 14.0%

10.00% 12.0%

8.00% 10.0%

6.00% 8.0%

4.00% 6.0%

2.00% 4.0%

2.0%
0.00%
3m 6m 1 yr 3 yr 5 yr 10yr 15 yr 20 yr 30 yr
Apr-14

Apr-15

Apr-16

Apr-17

Apr-18
Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18
Aug-14

Aug-15

Aug-16

Aug-17

Aug-18

Nov-18 Nov-17 Nov-16

Source: PSX Source: PSX

5
Stock Market Synopsis
Last week This Week Change 1M 3M 12M
Mkt. Cap (US $ bn) 56.0 55.3 -1.3% 55.4 62.6 70.8
Avg. Dly T/O (mn. shares) 105.1 110.3 5.0% 131.0 183.1 185.1
Avg. Dly T/V (US$ mn.) 33.9 35.9 6.0% 48.3 57.6 65.3
No. of Trading Sessions 5.0 4.0 -1.0 22.0 64.0 247.0
KSE 100 Index 38,251.0 37,167.0 -2.8% 37,167.0 40,998.6 40,371.3
KSE ALL Share Index 28,384.1 28,001.3 -1.3% 28,001.3 29,944.5 29,580.2

Chart 13: KSE-100 Active Issues (ADTO-million shares) Chart 14: KSE-100 Least Traded Issues (ADTO- shares)

TRG Pakistan Ltd. Murree Brewery Company Ltd.

Pak Elektron Ltd. Nestle Pakistan Ltd.

K-Electric Limited. Gatron (Industries) Ltd.

Bank Of Punjab.
Bata Pakistan Ltd.

Bank Alfalah Ltd.

Colgate Palmolive (Pak) Ltd.

0 5 10
Source: PSX Source: PSX - 50 100 150 200 250 300

Chart 15: KSE-100 Top Gainer (% change) Chart 16: KSE-100 Top Losers (% change)

Bank Al-Habib Ltd. Attock Refinery Limited.

Atlas Honda Limited. Millat Tractor Ltd.

Bank Alfalah Ltd. Nestle Pakistan Ltd.

Hum Network Limited. HBL Growth Fund

Thal Limited. Shell Pakistan Ltd.

0% 4% 8% 12% -18% -15% -12% -9% -6% -3% 0%

Source: PSX Source: PSX

6
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