MORNING BRIEFING

Janu ary 6, 2011

Analyst TSL Research Market Overview research@taurus.com.pk Ext: 202 The market was range bound on Wednesday. The KSE-100 Index
Tue, Jan 4 KSE-100 Index KSE-30 Index Shares Traded (mn) Value Traded - PKRm Market Cap. - PKRbn
Index 12500 12000 11500 11000 10500 10000 9500 9000 8500 8000
Wed Mon Tue Thr Fri

Wed, Jan 5

gained 30 points to close at 12,140 on the back of 168m shares exchanging hands. Most of the activity was concentrated in Chemicals, Banks, Electricity and Personal goods sectors. The top gainers according to Index points were OGDC, HBL and PPL; likewise the top decliners were MCB, UBL and PTCL. We believe that the market would remain range bound today and so, advise investors to hold onto their positions.

12,110.26 11,700.33 220 9,242 3,283

Market - Last 5 days

12,140.84 11,717.28 168 7,890 3,289

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Index

Attock Refinery Limited 1QFY11 Review

ATRL posted an impressive PAT of PKR 583m (EPS: PKR 6.84) for 1QFY11 after recovering against a LAT of PKR 396m (LPS: PKR 4.65) in the corresponding quarter last year. Topline depicts remarkable growth For the period under review, topline grew by 30% YoY, thanks to the capacity utilization of 101% in 1QFY11 (1QFY10: 88%). Favorable international crude prices and stability in forex rates during the quarter resulted in better gross margins (1QFY11: 3.5%) translating down to a modest net profit for the period. ATRLs financial charges consist of mainly foreign currency exchange losses (1QFY11: PKR 41m, 1QFY10: PKR 127m), down by 67%. Like the entire energy sector, circular debt also aided the much stressed companys cash position with receivables in 1QFY11 swelling to PKR 35.5 bn (1QFY10: PKR 30bn), up by 18% and payables to PKR 52bn (1QFY10: 44bn), up by 18% as well. Going forward Alongside other refineries, ATRL is also expected to substantially benefit from revision in turnover tax (i.e. from the proposed 1% to 0.5%). On the other hand, revision in import parity pricing formula, i.e. removal of incidental charges in calculation of ex-refinery price by GoP, will limit

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Disclaimer: The above information and advice is given in good faith, without any legal responsibility. Taurus Securities Limited or individuals connected with it may have used research material before publication and may have positions in or may be interested in the securities mentioned herein.

8-Dec

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M orning Briefing
the margins and the profitability not only for the company but also for
Wo rld Ind ices Ma rket s at Clo se DJIA Nasdaq S&P FTSE DAX CAC-40 Nikkei H.Seng Sensex Jan 5, 20 11 Ind ex 11,723.88 2,702.02 1,276.58 6,043.86 6,939.82 3,904.61 10,380.77 23,757.82 20,301.10 Chg% 0.28 0.78 0.50 0.50 (0.51) (0.29) (0.20) 0.38 (0.96)

the sector until GoP decides otherwise.

ATRL1QFY11
1QFY11

PKRm
1QFY10 %Chg

NetSales CostofSales GrossProfit Distributioncost Adminexp OperatingProfit OtherIncome Otherexp FinanceCost PBT Tax PAT EPS GrossMargin OperatingMargin NetMargin Source:TSLResearch

25,041 24,164 877 6 66 804 321 82 42 1,001 418 583 6.84 3.5% 3.2% 2.3%

19,256 19,779 (523) 6 61 (590) 348 5 128 (375) 21 (396) (4.65) 2.7% 3.1% 2.1%

30% 22% N.M. 10% 8% N.M. 8% 1544% 68% N.M. 1883% N.M. N.M.

News Snapshot
Big companies should be given incentives for listing on stock exchanges: Senate body, SECP agree: The Senate standing committee on finance and the Securities and Exchange Commission of Pakistan (SECP) were unanimous in that major incentives, including tax benefits, should be given through Finance Bill (2011-12) to the corporate sector for encouraging big companies to come forward for listing at the stock exchanges. (BR) Senate panel objects to new SECP chairmans appointment: A Senate panel on Wednesday questioned the transparency in appointment of new chairman of the Securities and Exchange Commission of Pakistan (SECP) and asked the finance ministry to submit a list of short-listed candidates, highlighting flaws in filling key posts. (Tribune)

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Disclaimer: The above information and advice is given in good faith, without any legal responsibility. Taurus Securities Limited or individuals connected with it may have used research material before publication and may have positions in or may be interested in the securities mentioned herein.

M orning Briefing
Economic reforms in serious trouble: With the government facing a battle for survival, the federal budget and economic reforms are in serious trouble. Although officials of the finance ministry insist there is no stepping back from economic reforms given the international commitments and rapidly growing fiscal deficit and inflation, independent analysts believe the reform agenda may already have been shelved. (Dawn) `Political instability to cause banking crisis`: Trade and industry leaders said on Wednesday the murder of Governor Punjab Salman Taseer has added another dimension to ongoing political turmoil, which carries massive economic implications. The international rating agency Moody`s warned on Wednesday that the prolonged political instability and economic stagnation could lead to a banking crisis. (Dawn) PM may undo POL price hike: After loosing the main coalition partners in the House, and drawing severe criticism over the rise in petroleum, Federal Government finally bowed down to the pressure and set to withdraw the raise in POL prices. According to the media report, Prime Minister Syed Yousuf Raza Gilani would announce the withdrawing of raise in petroleum prices in the House today (Thursday), whereas it is also likely that Prime Minister Gilani would slash the recent hike by 50 per cent. (TFD) Fertilizer makers demand more gas supply: Fertilizer manufacturers have assured the government that they can produce 0.2 million tons more urea, if gas load shedding period for them was curtailed to 30 days from 45 and if they received supplies from Mari Gas. The Fertilizer Price Review Committee (FPRC) of the Ministry of Industries and Production has sought the Prime Ministers approval for both these measures. (The News) Bank Alfalah, Silkbank in talks: Bank Alfalah and Silkbank are in negotiations to find an option for increasing their share in the Pakistani banking market, said industry sources. The two banks are engaged in talks for the last two weeks but have not reached any decision, the sources said. (Dawn)

Disclaimer: The above information and advice is given in good faith, without any legal responsibility. Taurus Securities Limited or individuals connected with it may have used research material before publication and may have positions in or may be interested in the securities mentioned herein.