Investment Analysis & Portfolio Management

Assignment 3: Portfolio Analysis

WEEK 2 (FEB 22nd to March 1st, 2017)

Submitted To: Dr. Sohail Zafar

Submitted By: Shahzad Yahya

Saim Haseeb

Abdul Moeed

Mian Hashim Ayaz

Asad Ahmad Subhani

Submission: 1st March, 2017

Lahore School of Economics

 Passive Portfolio

Serial Number of
Company Po (Rs.) Wo (Rs) P1 (Rs.) W1 (Rs)
No Shares
1 Lucky Cement
32,947 869.33 28,641,815.51 878.00 28,927,466.00
2 Nishat Mills
31,949 170.51 5,447,623.99 170.59 5,450,179.91
3 MCB Bank
29,262 228.79 6,694,852.98 227.20 6,648,326.40
4 Atlas Honda
32,491 574.00 18,649,834.00 573.00 18,617,343.00
5 Shell Pak
41,500 616.15 25,570,225.00 597.71 24,804,965.00
6 Netsol Tech.
38,500 83.73 3,223,605.00 78.65 3,028,025.00
AKZO Nobel
7
Chemical 42,762 263.06 11,248,971.72 271.76 11,621,001.12
8 Treet Corp.
45,737 77.39 3,539,586.43 73.09 3,342,917.33
Total
103,016,514.63 102,440,223.76

Where,

P0 = Price of 22nd February 2017

P1 = Prices of 1st March 2017

W0 = Initial wealth which is Rs. 103,016,514.63

W1 = Wealth calculated by number of shares multiplied by closed prices of 1st March 2017 =
102,440,223.76

Return

Rate of Return = (W1-W0)/W0

ROR = (102,440,223.76 103,016,514.63) / 103,016,514.63

Periodic Rate of Return = -0.559%

 Levered Portfolio

Intial Investment = Rs. 100,000,000

Loan = Rs. 50,000,000

Serial Number
Company Po (Rs.) Wo (Rs.) P1 (Rs.) W1 (Rs)
No of Shares

1 Bhanero Textile 5,882 850 4,999,700 850 4,999,700

2 Attock Cement 25,112 356 8,939,872 360 9,040,320

Hub Power
3 62,994 135.24 8,519,308.56 130.9 8,245,915
Company

4 Khyber Tobacco 11,579 1,012.5 11,723,737.5 1,041.96 12,064,855

5 Shell Pakistan 18,094 616.15 11,148,618.1 597.71 10,814,965

6 Indus Motors 6,666 1,668.81 11,124,287.46 1,595 10,632,270

7 Colgate Palmolive 5,350 1,900 10,165,000 1,938.6 10,371,510

8 Nestle Pakistan 1,551 9,000 13,959,000 9,155 14,199,405

9 Unilever Food 1,989 5,800 11,536,200 5,750 11,436,750

10 Crescent Steel 44,464 216.76 9,638,016.64 211.39 9,399,245

Total 101,753,740.3 101,204,934

Weekly Interest to be Paid = (6%/52) * 50,000,000

= Rs. 57,692

Ending Owners Equity (Week 1) = Market Value of Shares Loan Interest Paid

= 101,204,934 50,000,000 - 57,692

= Rs. 51,147,242

Rate of Return on Portfolio

Rp3 = (W1 W0Interest paid weekly)/W0

= (101,204,934-101,753,740 - 57,692) / 101,753,740

= -0.6%
Active Portfolio (22nd Feb 1st March)
 PSX Number P0 P1
Companies W0 (22nd Feb) W1 (1st March) ROR
Symbol of Shares (22nd Feb) (1st March)

Philip
1 PMPK 10,000 2,600.00 26,000,000.00 2,404.28 24,042,800.00 -7.53
Morris Pak.
Attock
2 ACPL 15,000 348.10 5,221,500.00 360.00 5,400,000.00 3.42
cement
Best way
3 BWCL 17,000 280.34 4,765,780.00 305.00 5,185,000.00 8.80
cement
Al-Ghazzi
4 AGTL 10,000 578.39 5,783,900.00 536.43 5,364,300.00 -7.25
Tractors
Shell
5 SHEL 14,791 616.15 9,113,474.65 597.71 8,840,728.61 -2.99
Pakistan
6 Atlas Honda ATLH 12,895 580.95 7,491,350.25 573.00 7,388,835.00 -1.37
Fauji
7 Fertilizers FFC 88,500 113.04 10,004,040.00 108.10 9,566,850.00 -4.37
Company
Fatima Fert FATIMA
8 200,000 39.01 7,802,000.00 38.85 7,770,000.00 -0.41
Co FEB -FEB
Fatima Fert
9 FATIMA 142,630 39.22 5,593,948.60 39.30 5,605,359.00 0.20
Co
10 Amreli Steel ASTL 30,000 83.78 2,513,400.00 81.54 2,446,200.00 -2.67
11 K- Electric KEL 500,000 9.81 4,905,000.00 9.53 4,765,000.00 -2.85
DG Khan
12 DGKC 25,000 233.90 5,847,500.00 235.42 5,885,500.00 0.65
Cement
Maple Leaf
13 MLCF 35,000 126.76 4,436,600.00 125.59 4,395,650.00 -0.92
Cement
Total 1,100,816 99,478,493.50 96,656,222.61 -2.837

Return on Portfolio (Rp) Week 3 = {(W1-W0)/ W0} * 100

= (99,478,493.50- 96,656,222.61) / 99,478,493.50

Periodic Profit/Loss on Portfolio Week 3 = -2.837 %

Stocks Traded
Best Way Cement and Attock Cement stocks are sold, as they gained a decent return of 8.8% and
3.42% respectively. Though cement sector is growing and currently performing well, reinvestment in
these cement stocks will be done when their prices are down.

This disinvestment (which totals to Rs. 10,585,000.00) is diversified by investing 25% (of this
amount) in Philip Morris, 20% in Hascol Petroleum, 20% in Hi Tech Lubricants, 20% in PSO and
remaining 15% in PSO; as these stock prices are down as compared to last week. Thus new portfolio
is as under

New Portfolio after Trading

Number of P0
Companies PSX Symbol W0 (1st March)
Shares (1st March)

1 Philip Morris Pak. PMPK 11,100.00 2,404.28 26,687,508.00

2 Attock cement ACPL 0.00 0.00 0.00
3 Best way cement BWCL 0.00 0.00 0.00

4 Al-Ghazzi Tractors AGTL 10,000.00 536.43 5,364,300.00

5 Shell Pakistan SHEL 14,791.00 597.71 8,840,728.61
6 Atlas Honda ATLH 12,895.00 573.00 7,388,835.00
Fauji Fertilizers
7 FFC 88,500.00 108.10 9,566,850.00
Company
Fatima Fert Co
8 FATIMA-FEB 200,000.00 38.85 7,770,000.00
FEB
9 Fatima fert Co FATIMA 142,630.00 39.30 5,605,359.00
10 Amreli Steel ASTL 30,000.00 81.54 2,446,200.00
11 K- Electric KEL 500,000.00 9.53 4,765,000.00
12 DG Khan Cement DGKC 25,000.00 235.42 5,885,500.00

Maple Leaf
13 MLCF 35,000.00 125.59 4,395,650.00
Cement
14 Kohat Cement KOHC 5,854.00 271.23 1,587,780.42
15 Hascol Petroleum HASCOL 6645.00 318.74 2,118,027.30
16 Hi Tech Lubricants HTL 19836.00 106.73 2,117,096.28
17 PSO PSO 4810.00 440.21 2,117,410.10
Total 1,107,061.00 96,656,244.71

Market Portfolio
22nd February, 2017:

KSE-100 Index (Po) = 49,015.09

No of shares Purchased = 100,000,000/49,015.09

= 2040 shares

Amount Invested (Wo) = 2,040 * 49,015.09

= Rs 99,990,783

Amount Remaining in Cash = 99,990,783-99,990,783

= Rs. 0

1st March, 2017:

KSE-100 Index = 48,534.23

Investment value at end of week - 2 = 48,534.23* 2,040

= Rs 99,009,829

Rate of Return:

Rp week - 3 = (W1 Wo)/Wo

= (99,009,829-99,990,783) / 99,990,783

= -0.98%

Wo (shares) Po MV

22nd February, 2017 2040 shares 49,015.09 Rs 99,990,783

W1 (shares) P1 MV

1st March, 2017 2040 shares 48,534.23 Rs 99,009,829