B+ Analysis and News

1. Appreciation of Pak Rupee against the U.S. dollar attracted investor attention in the market
2. MARI was the star performer of the week as the company aimed to ramp‐up its gas production by 150 – 200 mmscfd within a couple of months
3. Announcement made by the Mari Gas that it will add 200mmcfd of gas within a couple of months which in turn provided momentum to the fertilizer industry
4. Government of Pakistan takes concrete step towards PIA sell‐off ,PIA has issued 2.356bn shares to the federal government against its advance equity of the same amount. The airline also increased its authorised capital to PKR54bn, from PKR30bn 
5. Foreigners continued selling spree of US$10.2mn during the week as compared to net selling of US$17mn in the past week
6. OPEC’S indecision to maintain its oil output in its last week’s policy review has triggered another slide in global crude oil prices where Arablight/Brent have slipped 7.7%/7.4%
7. ECC of the Cabinet allowed the export of 0.5 mn metric tons of sugar by Mar 31’16 and approved PkR13 as cash freight subsidy on the export
8. Engro Foods also added to rally as it is about to launch powdered milk in the next 6 months

B+ Weekly Analysis 2015

·        Prime Minister Nawaz Sharif is on US visit on the welcome of President Barack Obama. Top issue on the table is expansion of US military vicinity in neighboring Afghanistan till 2017 took after by different issues identifying with reciprocal participation in different fields. 

·        OGRA's dismissal of SNGPL's supplication for a PkR190/mmbtu (47%) expansion in the gas tax, to permit the utility to meet its Final Revenue Requirement of PkR84bn 

·        Foreigners were again merchants at the bourse, offloading $2.6 million worth of net value on the back of the $9.2 million net offering the earlier week. Outsiders have now offloaded a net of $28 million worth of value in the Pakistani market in October alone 

·        Strong results from the material segment ought to add to the late enthusiasm for the portion from the material alleviation bundle 

·        Release of PkR150.7bn by the GoP under PSDP versus planned PkR700bn 

·        The keeping money segment, then again, kept on recuperating emphatically after profit declarations by significant banks were to a great extent inline with desires 

·        The material segment considered increases to be the legislature declared impetuses for the turning area while the auto-segment additionally pulled in enthusiasm on news of the auto-approach being closer to finish 

·        The oil and gas part was again at the focal point of occasions at the bourse as unrefined petroleum costs gradually crawled downwards consistently. Moreover, come about declarations by Pakistan Petroleum Limited and Pakistan Oilfields were beneath desires and turned out to be a damper available 

·        Imposition of 10% RD on Indian yarn imports and 100bps cut in ERF and LTFF under material motivating force bundle 

·        Current record equalization posting a US$306mn surplus in Sept'15 

B+ Weekly Analysis 2015

• Some renewed interest was seen in the textile sector as the Govt. agreed to announce textile package by the end of Oct 2015
• Pakistan and Russia inked an agreement to lay 1000kms Karachi-Lahore LNG pipeline cos��ng US$2bn
• Export/Import for Sept'15 at US$1.7bn/US$3.4bn, down 20%/23%YoY, with net deficit of US$1.7bn down 25% according to PBS figures
• The GoP borrowed PkR170bn through MTB auctions with 3mth, 6mth and 12mth cut-off yields coming in at 6.44%, 6.48% and 6.48% respectively
• Arablite dropped to US$46.89/bbl from US$49.63/bbl last week though Oil sector witness 4% appreciation in value
• Confusion still prevails over the taking back of gas tariff hike and reduction in price per bag, therefore the sector remained under pressure where the major players in the fertilizer sector closed in the red zone
• News of LUCK expanding in the North gives rise to speculation that other major players will do the same, which can eventually lead to the big players to get into a price war to capture market share, although this speculation will become valid as and when these expansions come on line not before at least 2‐3 years
• The Ministry of National Food Security and Research notified detailed procedure of the subsidy on DAP, NP and NKP, which would be paid after the sale of bagged fertilizers on the basis of sales tax invoice

B+ Weekly Analysis 2015

• Book building of Amreli Steels Limited was completed. A total of 138.8mn shares were received against the offer of 55.5mn shares, at a strike price of Rs51/share.
• Oil & Gas, construction & material and Commercial banks were major gainers during the week, increasing by 8%, 4% and 2%, respectively. Tobacco and Life Insurance were major losers, down 4% and 3%, respectively
• Moody’s assignment of a B3 rating to Pakistan’s global bond and regarding economic outlook as ‘stable’, and most importantly
• Pakistan Petroleum Limited (PPL), through a KSE notice, has disclosed the discovery of gas from the Latif South-1 exploration well. PPL has a 33.34% stake in the joint venture of the Latif exploration license. Our analysts predict a positive impact of Rs0.18 on PPL's EPS
• GoP borrowing PkR97.6bn vs. targeted PkR50bn in PIBs auction with cut‐off yields for 3yr, 5yr and 10yr coming in at 7.196% (down 15bps), 8.180% (down 15bps) and 9.229% (down 11bps)
• Comfortable reserves position as a result of US$505mn from the International Monetary Fund (IMF), US$500mn from issuance of Sukuk bonds and US$376mn under the Coalition Support Fund (CSF)
• IMF’s detailed assessment report on its eighth review under EFF managed to only uphold positivity with its allocation of a threshold for circular debt and an urge to improve recovery of DISCOS (Distribution Companies)
• Sharp recovery was seen in international oil prices during the week as Arab Light/WTI Crude was up 12%/9% WoW. Resultantly, Oil & Gas sector at KSE index marched up 8% WOW