Topline Market Review Market posts marginal gains of 0.88% KSE 100 Index +0.88% WoW; Weekly net FIPI US$12.4mn

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1 Pakistan Weekly January 26, 2018 REP 057 Topline Market Review Market posts marginal gains of 0.88% KSE 100 Index +0.88% WoW; Weekly net FIPI US$12.4mn Topline Research Tel: , Ext: 133 Topline Securities, Pakistan Best Local Brokerage House Brokers Poll , Best Local Brokerage House

2 Market closes up slightly 0.88% Market Weekly Data KSE 100 Index 44, Week Change (%) 0.8% Market Cap (Rs tn) Week Change (%) 1.4% Market Cap (US$ bn) Week Change (%) 1.4% 1 Week Avg. Daily Vol (shares mn) Week Avg. Daily Value (Rs bn) Week Avg. Daily Value (US$ mn) KSE Volume & Value (Shares mn) 350 Volume Value Ja an Ja an Ja an Ja an Ja an 18 (US$mn) The State Bank of Pakistan (SBP) announced its monetary policy today in the evening where it decided to increase the policy rate by 25bps to 6%. SBP had kept the policy rate unchanged at 5.75% for last 1.5 years. Market after touching 45k index level during the week, posted muted gains closing up by ~1% WoW. Investors adopted a cautious stance on the back of slowdown in foreign buying, rise in US Pak tensions and Fitch rating agency changing Pakistan s outlook to negative. Benchmark index managed to close marginally up 378points/0.88%WoW vs.last weak index gain of3%. Result season has started with most of the companies posting in line or better than expected financial results with exception of POL s dismal results. Participation declined significantly, average volumes decreased 30% WoW while value declined 28%. Increased activity was seen in second and third tier stocks. On the sector front; Cement, Power Generation & Distribution, and Pharmaceutical sector cumulatively added 424 pts whereas Banks, E&P and Fertilizer sector cumulatively withheld 309 points. Foreigners were net buyers of US$12mn worth of shares during the week vs. buying of US$33mn during the last week. On the local front, Banks were net sellers of US$13.7mn whereas Individuals were net sellers of US$24.8mn. Topline Honda Atlas Market Cars Review (HCAR) 2

3 Important News, Views & Corporate Announcements The Trumpadministration i i designated d six individuals id asglobal lterrorists, accusing them of supporting the Taliban and Haqqani network in Afghanistan. The administration stressed their links to Pakistan. Among them are senior members of the former Taliban government in Afghanistan, including former central bank governor Abdul Samad Sani. Indonesian President Joko Widodo is arriving in Pakistan today on a two day visit. The visiting dignitary will address the joint session of Parliament today, which is scheduled to begin at 6pm. He will be only the second president of Indonesia to address the Joint Sitting of the Parliament. Before him, President of Indonesia Dr Ahmed Soekarno had addressed the National Assembly of Pakistan on June 26, Various agreements and MoUs are expected to be signed on the occasion. Hussein Sugar Mills (HUSS) notified the bourse that BoD of the company have considered d and approved Sh Scheme of Arrangement relating to merger/amalgamation of Style & Trends (Private) Limited, an associated Company into Hussein Sugar Mills Limited. The proposed merger is, however, subject to final approval by the Honorable Lahore High Court, Lahore Security Papers Pakistan (SEPL) reported 2QFY18 EPS of Rs2.67, down 45% YoY. Although, sales were up 7% however gross margins declined from 37% to 35% in the outgoing quarter. Interior Minister Ahsan Iqbal on Friday said that the recent changes in policies regarding visas and international nongovernmental organizations (INGOs) will benefit Pakistan."We are not only in agreement over security requirement, but are also following them," Iqbal said while speaking in Il Islamabad bdabout the recentchanges to the on arrival visa policy for the country. Last week, the Civil Aviation Authority (CAA) had announced that groups of tourists from a number of "tourism friendly" countries are now being allowed on arrival visas. Pakistan Peoples Party (PPP) supremo Asif Ali Zardari s recent meeting with Balochistan s "puppet" chief minister is the beginning of "shameful horse trading" for the upcoming Senate elections, said Pakistan Muslim League Nawaz leader Khawaja Saad Rafique. Topline Honda Atlas Market Cars Review (HCAR) 3

4 KSE-100 Index KSE Market Capitalization 45,500 44,400 43,300 42,200 41,100 44,898 44,907 45,063 44,817 44,551 (US$bn) , Jan n Jan n Jan n Jan n Jan n Jan n Jan n Jan n Jan n Jan n-18 Market Cap. Sector-wise Return: Top 5 Gainer / Loser of the week All Share Index: Top 5 Gainer / Loser of the week 14% 15% 50% 47% 10% 7% 7% 7% 6% 40% 5% 30% 0% -5% -1% -1% -1% -2% -3% 20% -10% Oil & Gas Exp. Assembler Auto Food Power Generation Telecom Misc cellaneous Chemical Inv. Banks, Cos. Fertilizer Textile e Weaving 10% 0% -10% SER RT 38% 38% 36% 32% DAA AG EL KL BL Unadjusted prices -6% -6% -6% -6% -7% Topline Honda Atlas Market Cars Review (HCAR) 4 D D SI DWS SM REDC CO SC CL PL UD CHA AS

5 Top 10 Average Volume Leaders Top 10 KSE-100 Index Points Contributors TRG KE EL DC CL BO P POWE R LUC CK DGK KC HUB BC PIBT TL PKG GS FF FC PP PL HB BL PO OL UB BL Foreign: G.Buy, G.Sell & Net Sector wise During the Week (28 30th) (US$mn) Gross Buy Gross Sell Net Oil and Gas Exploration Companies 5.8 (7.1) (1.2) Fertilizer 5.5 (4.1) 1.4 Cement 14.3 (8.1) 6.2 Food and Personal Care Products 1.1 (1.2) (0.0) Textile Composite 1.8 (2.2) (0.4) Technology and Communication 4.6 (4.3) 0.3 Power Generation and Distribution 2.5 (2.2) 0.3 Commercial Banks 16.1 (11.5) 4.6 Oil and Gas Marketing Companies (5.1) (1.7) All other Sectors 18.1 (15.2) 3.0 Total 73.3 (60.9) 12.4 Foreign: Buying, Selling & Net During the Week Gross Buy Gross Sell Net 22 Jan (16.5) (3.6) 23 Jan (10.0) Jan (13.6) Jan (13.4) (3.8) 26 Jan (7.4) 0.5 Weekly 73.3 (60.9) 12.4 Month thto Dt Date (191.6) Year to Date (191.6) 94.9 Topline Honda Atlas Market Cars Review (HCAR) 5

6 Local lbanks: GB G.Buy, GS G.Sell ll& Net tsector wise During the Week Local lbanks: GB G.Buy, GS G.Sell ll& Net tduring the Week (US$mn) Gross Buy Gross Sell Net (US$ mn) Gross Buy Gross Sell Net Cement 1.2 (5.8) (4.6) 22 Jan (8.5) (5.4) Fertilizer 2.9 (2.0) 0.9 Food 0.0 (0.3) (0.3) 23 Jan (6.9) (3.1) Oil and Gas Expl. 5.3 (5.3) (0.0) 24 Jan (14.4) (5.9) Oil and Gas Mark. 2.3 (1.9) Jan (3.2) (0.1) Power 1.1 (2.4) (1.3) Banks 1.5 (6.6) (5.1) 26 Jan (2.4) 0.9 Telecom 0.3 (0.5) (0.1) Weekly 21.8 (35.4) (13.7) Textile 0.9 (0.9) (0.0) Month to Date 63.0 (102.0) (39.0) Other Sectors 6.2 (9.7) (3.5) Total 21.8 (35.4) (13.7) Year to Date 63.0 (102.0) (39.0) Local Funds: GBuy G.Buy, GSell& G.Sell Net Sector wise During the Week (US$mn) Gross Buy Gross Sell Net Cement 11.4 (8.6) 2.8 Fertilizer 3.8 (3.0) 0.8 Food 0.1 (0.4) (0.3) Oil and Gas Expl (15.6) (5.4) Oil and Gas Mark. 3.6 (4.5) (1.0) Power 4.9 (2.6) 2.4 Banks 3.1 (2.9) 0.2 Telecom 0.5 (0.2) 0.3 Textile (1.2) Other Sectors 9.3 (15.8) (6.4) Total 49.0 (54.7) (5.7) Local Mutual Funds: G.Buy, G.Sell Sell& Net During the Week (US$ mn) Gross Buy Gross Sell Net 22 Jan (6.2) Jan (13.2) (7.2) 24 Jan (20.1) (2.2) 2) 25 Jan (6.7) (1.6) 26 Jan (8.5) (0.4) Weekly 49.0 (54.7) (5.7) Month to Date (178.5) (13.0) Year to Date (178.5) (13.0) Topline Honda Atlas Market Cars Review (HCAR) 6

7 Board Meetings & AGM Board Meetings S. No Company DATE Pakistan Time Venue 1 Adam Sugar Mills Limited Saturday, January 27, :30 p.m. Karachi 2 Sanghar Sugar Mills Limited Saturday, January 27, :30 p.m. Karachi 3 Shahmurad Sugar Mills Ltd Monday, January 29, :30 a.m. Karachi 4 Ansari Sugar Mills Limited Monday, January 29, :00 a.m. Hyderabad 5 Mirpurkhas Sugar Mills Ltd Monday, January 29, :00 a.m. Karachi 6 Berger Paints Pakistan Limited Monday, January 29, :00 p.m. Karachi 7 GlaxoSmithKline Consumer HealthCare Pakistan Monday, January 29, :00 p.m. Karachi 8 Faran Sugar Mills Monday, January 29, :00 p.m. Karachi 9 Mitchell s Fruit Farms Limited Tuesday, January 30, :00 a.m. Lahore 10 Mehran Sugar Mills Limited Tuesday, January 30, :30 a.m. Karachi 11 IGI Insurance Limited Tuesday, January 30, :30 p.m. Lahore 12 Fauji Fertilizer Company Tuesday, January 30, :30 a.m. Rawalpindi 13 Archroma Pakistan Limited Tuesday, January 30, :00 a.m. Karachi 14 Exide Pakistan Limited Tuesday, January 30, :30 a.m. Karachi 15 Engro Polymer & Chemicals Wednesday, January 31, :30 a.m. Karachi 16 Pakistan Refinery Limited Wednesday, January 31, :30 a.m. Karachi 17 Arif Habib Limited Wednesday, January 31, :00 a.m. Karachi 18 Atlas Honda Limited Wednesday, January 31, :00 a.m. Karachi 19 Hi Tech Lubricants Limited Wednesday, January 31, :30 p.m. Lahore 20 TRG Pakistan Limited Wednesday, January 31, :00 p.m. Karachi 21 Engro Powergen Qadirpur Ltd Thursday, February 01, :30 a.m. Karachi 22 Lotte Chemical Pakistan Ltd. Friday, February 02, :0000 a.m. Karachi 23 Kot Addu Power Company Ltd Thursday, February 22, :30 a.m. Kot Addu 24 Pakistan International Container Terminal Friday, February 23, :30 a.m. Karachi 25 Indus Motor Company Limited Friday, February 23, :00 a.m. Karachi 26 Unilever Pakistan Foods Ltd Monday, February 26, :30 p.m. Karachi Shareholder Meetings S. No Company DATE Pakistan Time Venue 1 Faran Sugar Mills Saturday, January 27, :00Noon Karachi 2 Imperial Sugar Limited Saturday, January 27, :00 a.m. Lahore 3 Adam Sugar Mills Saturday, January 27, :00 a.m. Karachi 4 Jauharabad Sugar Mills Saturday, January 27, :30 a.m. Lahore 5 Sanghar Sugar Mills Saturday, January 27, :30 a.m. Karachi 6 Crescent Steel & Allied Products # Monday, January 29, :00Noon Lahore 7 TRG Pakistan Wednesday, January 31, a.m. 00 Karachi 8 Pak Suzuki Motor Co. Ltd. # Friday, February 02, :00 a.m. Karachi 9 MCB Bank Limited # Saturday, February 10, :00 a.m. Lahore # EOGM Honda Atlas Cars (HCAR) 7 Topline Market Review

8 Analyst Certification and Disclosures The research analyst(s), denoted by an AC on the cover of this report, primarily involved in the preparation of this report, certifies that (1) the views expressed in this report accurately reflect his/her personal views about all of the subject companies/securities/sectors and (2) no part of his/her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. Furthermore, it is stated that the research analyst or its close relative have neither served as a director/officer in the past 3 years nor received any compensation from the subject company in the past 12 months. Additionally, as per regulation 8(2)(i) of the Research Analyst Regulations, 2015, we currently do not have a financial interest in the securities of the subjectcompany aggregating more than 1% of the value of the company. Rating System Topline Securities employs three tier ratings system to rate a stock, as mentioned below, which is based upon the level of expected return for a specific stock. The rating is based on the following with time horizon of 12 months. Rating Expected Total Return Buy Stock will outperform the average total return of stocks in universe Neutral Stock will perform in line with the average total return of stocks in universe Sell Stock will underperform the average total return of stocks in universe For sector rating, Topline Securities employs three tier ratings system, depending upon the sector s proposed weight in the portfolio as compared to sector s weight in KSE 100 Index: Rating Sector s Proposed Weight in Portfolio Over Weight > Weight in KSE 100 Index Market Weight = Weight in KSE 100 Index Under Weight < Weight in KSE 100 Index Ratings are updated daily to account for the latest developments in the economy/sector/company, changes in stock prices and changes in analyst s assumptions or a combination of any of these factors. Valuation Methodology To arrive at our 12 months Target Price, Topline Securities uses different valuation methods which include: 1). Present value methodology, 2). Multiplier methodology, and 3). Asset basedmethodology. Research Dissemination Policy Topline Securities endeavors to make all reasonable efforts to disseminate research to all eligible clients in a timely manner through either physical or electronic distribution such as , fax mail etc. Nevertheless, all clients may not receive the material at the same time. Disclaimer i This report has been prepared by Topline Securities and is provided for information purposes only. Under no circumstances this is to be used orconsidered as an offer to sell or solicitation of any offer to buy. While reasonable care has been taken to ensure that the information contained therein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Topline Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report. This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report. Investments in capital markets are subject to market risk and Topline Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents. In particular, the report takes no account of the investment objectives, financial situation and particular needs of investors, who should seek further professional advice or rely upon their own judgment and acumen before making any investment. The views expressed in this report are those of Topline Research Department and do not necessarily reflect those of Topline or its directors. Topline as a firm may have business relationships, including investment banking relationships, with the companies referred to in this report. All rights reserved by Topline Securities. This report or any portion hereof may not be reproduced, distributed or published by any person for any purpose whatsoever. Nor can it be sent to a third party without prior consent of Topline Securities. Action could be taken for unauthorized reproduction, distribution or publication. Topline Market Review 8