Performance of Pak-Qatar Unit Funds

Transcription

1 1-Nov-18 2-Nov-18 6-Nov-18 7-Nov-18 8-Nov-18 9-Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov-18 Performance of Pak-Qatar Unit Funds Country Index Nov-18 Oct-18 UK FTSE % -5.09% USA Nasdaq 0.34% -9.20% USA Dow % -5.07% China Shanghai -0.56% -7.75% Hong Kong Hang Seng 6.11% % Japan Nikkei % -9.12% India BSE % -4.93% Pakistan KMI % 3.62% Pakistan KSE % 1.59%. Economic Review Several changes witnessed in the macroeconomic landscape of Pakistan during the mother of November State Bank of Pakistan (SBP) increased the policy rate by 150bps (highest hike after November 2008) to 10% with PKR depreciation against USD by around 4% to close just below PKR/USD 140. This monetary tightening cycle could continue in the next calendar year, but there remains a little upside for major interest rate hikes. We expect another 150bps (maximum) hike in the next calendar year. SBP also reduced its GDP growth forecast to 4% and has enforced measures i.e. monetary tightening, control on FX flows and exchange rate adjustments, along with govt. measure of spike in fuel prices, to curtail overall Current Account Deficit (CAD). The growth target has retreated, reflection of that is also indicative in declining Large Scale Manufacturing (LSM) index by 1.7%YoY in 1QFY19. For the end consumers, CPI for month of November 2018 clocked-in at 6.5%YoY as compared to 6.8%YoY in October 2018 and 4.0% in November Inflationary pressure would increase in upcoming months reflecting govt. policy measures. Govt. is also cognizantof reversalin internationalcrudeprices which will allowfor easinginflationarypressureand manageablebudgetarydeficit. On the other hand, pressure on external account is also there as CAD increased to USD 1.2bn in October 2018 from USD 900mn in September 2018, accredited to increase in imports. Overall CAD for 4MFY19 stood at USD 4.8bn as compared to USD 5.1bn in the same period last year. Furthermore, foreign exchange reserves of the country declined by USD 577mn during the month of November 2018 to close at USD 14bn, despite of the fact that government received USD 1bn from SaudiArabia duringthecurrentmonth. Equity Market Review KSE-100 index declined by 1,153 points or 2.8% during the month, to close at 40,496 points. Uncertainty prevailed in the market during the whole month due to macroeconomic imbalances, hike in policy rate expectations, MSCI semi-annual review, delay in IMF program, and most importantly, decline in oil prices in the internationalmarketdented theheavyweight E&P sector. International oil prices fell around 20% during the month of November 2018 due to expectations of lower than required supply cut by OPEC and Non-OPEC members, US-China trade war and inventory build-up in US. This decline translated into heavy selling in E&P and OMC stocks, which contributed heavy losses in the index decline. Foreigners remained net seller during the month and sold equity worth of around USD 100mn, most of which were absorbed by Insurance Companies (~USD 37mn) and Individuals (~USD 26mn). Heavy foreign selling witnessed mainly due to portfolio rebalancing after MSCI downgraded UBL and LUCK from MSCI Large Cap Index to MSCI Small Cap Index and it has removed MLCF and HCAR from the MSCI Small Cap Index. To recall, foreigners have sold USD 509mn worth of shares since startof ongoingcalendar year. We expect volatility to persist in the equity market in the coming months as higher fixed income returns would attract investors to grab fixed returns rather than playingwith the volatility. Werecommend policyholdersto staycautious till endingof uncertaintyonmacroeconomicfront. 42,200 41,700 KSE100 Volume (m) , , ,200 0

2 PIF-Aggressive Fund The objective of investments is to enhance returns through a well-diversified, prudently invested portfolio while considering customer needs, regulatory restrictions and overall corporate strategy of PQFTL. The Fund intends to achieve capital appreciation with medium to long term investment horizon bytakingenhanced exposure to equities and fixed income investments PIF-Aggressive Fund Fund Size PKR 1,913,634, Unit Price PKR Aggressive Composite of (KMI-30 YTD & Average on ) based on actual allocation Appointed Actuary , , , , , Equities, 61.7% 0.7% & Secretary Placement, 37.6% Money Market Funds, 0.0% 1-month (absolute net of IMC) -2.02% - (1-month absolute net of IMC) -2.58% Calendar YTD (absolute net of IMC) 3.72% YTD (absolute net of IMC ) 0.63% 3-Years (absolute net of IMC) 10.7% 5-Years (absolute net of IMC) 14.6% Since Inception (absolute net of IMC) 122.4% Equities 61.7% 63.0% Money Market Funds 0.0% 0.0% Placement 37.6% 35.8% Sukuk 0.0% 0.0% Miscellaneous 0.7% 1.2% Sukuk, 0.0%

3 PIF-Balanced Fund regulatory restrictions and overall corporate strategy of PQFTL. Objective is to provide capital appreciation with a modest risk profile and a medium to long- term investment horizon by investing in a portfolio of fixed income instruments and a flavor of equity investments PIF-Balanced Fund Fund Size PKR 5,366,045, Unit Price PKR Balanced Composite of (KMI-30 YTD & Average on ) based on actual allocation Appointed Actuary , , , , , Money Market Funds, 0% & Secretary Placement, 27% 1-month (absolute net of IMC) -1.20% - (1-month absolute net of IMC) -1.43% Calendar YTD (absolute net of IMC) 4.97% YTD (absolute net of IMC) 1.66% 3-Years (absolute net of IMC) 12.9% 5-Years (absolute net of IMC) 17.7% Since Inception (absolute net of IMC) 123.0% Equities, 39% 5% Sukuk, 29% Equities 39% 37.4% Money Market Funds 0% 0.0% Placement 27% 30.6% Sukuk 29% 26.9% Miscellaneous 5% 5.1%

4 PIF-Conservative Fund regulatory restrictions and overall corporate strategy of PQFTL. The Fund aims to provide stable return exhibiting low volatility with capital preservation by constructing a portfolio composed of fixed income and Mutual Funds investments PIF-Conservative Fund Fund Size PKR 1,340,892, Unit Price PKR Conservative Average on three Islamic Bank , , , Appointed Actuary , , Placement, 18.5% Mutual Funds, 0.0% & Secretary 1.5% Sukuk, 80.0% 1-month 8.8% - (1-month) 6.3% 3-months 7.7% Calendar YTD 5.6% (CYTD ) 5.5% Since Inception 8.2% 3-Years 6.3% 5-Years 7.5% Since Inception (absolute net of IMC) 132% Mutual Funds 0.0% 0.0% Placement 18.5% 14.6% Sukuk 80.0% 83.8% Miscellaneous 1.5% 1.6%

5 PIF-SecureWealth Fund regulatory restrictions and overall corporate strategy of PQFTL. The fund aims to provide competitive returns from a portfolio of low credit risk with prime focus on investmentin Sukuks rated (A and above),islamic Deposits and Mutual Funds. 920 PIF-Secure Wealth Fund Fund Size PKR 102,407, Unit Price PKR Conservative Average on three Islamic Bank Appointed Actuary Sukuk, 92.60% & Secretary Placement, 6.85% Mutual Funds, 0.00% 0.55% 1-month 8.6% (1-month ) 6.3% 3-months 7.3% Calendar YTD 5.5% (CYTD ) 5.5% Since Inception 7.8% 3-Years 6.4% 5-Years 7.7% Since Inception (absolute net of IMC) 77.2% Mutual Funds 0.00% 0.00% Placement 6.85% 4.75% Sukuk 92.60% 92.49% Miscellaneous 0.55% 2.76%