SECURITIES

SHERMAN DAILY

Nov 22, 2010

KSE - 100 Index

KSE-100 index (Nov 15, 10) Change from last closing Change from last closing (%) YTD (since Dec 31, 09)(%) 10,965.99 56.34 0.52% 16.82%

Market Review
The stock market continued to firm amid thin trade during the shortened week ended November 19 owing to Eid holidays. The benchmark KSE-100 index rose by 0.85% or 91.97 points to close at 10,965.99, just below the psychological level of 11,000 points. Most investors took off early for Eid holidays as average volumes plummeted 58% to 69.46 million shares during the week compared with the previous weeks 166 million shares. Foreign interest, however, continued in blue chips especially after Standard & Poor (S&P) affirmed a stable long-term outlook for the country. S&P, the credit rating agency, confirmed the countrys long-term rating on foreign currency debt at a stable B- because of a better financial position on Monday. Buying was witnessed in oil stocks following both local and foreign interest. Pakistan State Oil and Shell Pakistan climbed by 1.24% and 0.9%, respectively, during the week. National Refinery stole the show in a largely lackluster market on Tuesday by hitting its upper limit. Pakistan Petroleum and Pakistan Oilfields also rose by 1.15% and 1.9% to close at Rs 194.25 and Rs 256.3, respectively. Inclusion of HUBCO in Shariah compliant scrips, passing of RGST and payments to PSO together with estimates regarding flood losses coming in public finally are good steps in making the macroeconomic outlook somewhat clear. Going forward, market needs some positive triggers and more clarity on the macroeconomic front. Market is expected to be positive today with improved volumes.

KSE Market Capitalization

KSE Market Capitalization (Nov 15, 10) (Rs. bn) KSE Market Capitalization (US$ bn) Change from last Closing (%) YTD (since Dec 31, 09) 3,037.49 37.04 0.43% 10.31%

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Nov 22, 2010

In Focus: HUBCO
Net Profit surges to Rs 5.468 billion; increase of 47% YoY Hubco second largest power producer registered a consolidated net profit of Rs 5.468 billion as against a net profit of Rs 3.717 billion, a significant increase of 47% on the back of increase in power tariffs under the power purchase agreement and 7% rupee depreciation as revenues are indexed to the US$. Earning per share (EPS) increased to Rs 4.74 as compared with an EPS of Rs 3.23 in FY09. Final DPS at Rs 5 despite circular debt gives a positive sign HUBCO announced a final cash dividend of Rs 2.5 per share i.e. 25% on the par value of Rs 10 per share which is a positive sign despite circular debt issue. This is in addition to an interim dividend of Rs 2.5 paid in April. However, HUBCO did not announce any bonus shares or rights issue.

Sales swelled by 20.4% YoY to Rs 100 billion Sales also showed a remarkable growth and increased to Rs 99.694 billion in FY10 as against Rs 82.783 billion in FY09, a notable increase of 20.42% due to higher furnace oil prices. Operating costs also increased to Rs 92 billion in FY10 compared with Rs 76 billion in FY09, an increase of 21%. Gross profit surged to Rs 7.687 billion in FY10 as compared with Rs 6.096 billion in FY09 mainly due to increase in sales. The finance costs decreased to Rs 1.8 billion during FY10 as against Rs 2.098 billion recorded in FY09. The other income of Hubco declined to Rs 67.024 million in FY10 as against Rs 133.472 million in FY09. Future Outlook Hubcos 220 MW Narowal project is expected to commence by the start of October, 2010. In addition, Hubcos subsidiary Laraib Energy Limiteds 84MW hydropower project is in the construction phase. Amid floods in various regions of Pakistan, Hubco plants and sites are safe including Laraib hydel plant
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Nov 22, 2010

and Narowal sites are secure. With dividend yield of 15% for FY11, target price is Rs 39.

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Nov 22, 2010

News Bulletin
Services sector deficit narrows by six percent Services trade deficit narrowed down by 6 percent during first four months of the current fiscal year mainly due to higher exports and slowdown in imports. Statistics of the State Bank show that the countrys services sector trade had gradually improved as exports surged and deficit declined. Investment from Russia: government to start talks for agreement The government will start negotiations with Russia to sign the agreement on promotion and protection of investment. The signing of the agreement between Pakistan and the Russian Federation would help in promoting and protecting investment in future. Pakistan & Turkey develop consensus to promote trade cooperation A 30-member Turkish businessmen delegation, in a meeting with the Lahore Chamber of Commerce and Industry (LCCI) Executive Committee members developed consensus to promote co-operation in various sectors like agriculture, industrial, trade, science, education including technological advancements between Pakistan and Turkey. Development projects: Strict action against corrupt elements Punjab Chief Minister, Shahbaz Sharif has said that government officials failing to pursue legal proceedings against the elements involved in corruption in development projects, would be considered equally guilty. He was presiding over a high-level administrative meeting after laying foundation stone and inaugurating various development projects in Dera Ghazi Khan (DG Khan).

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Nov 22, 2010

Daily Snapshot
Forex market
Inter Bank Symbol
US $ Euro Japanese Yen Australian $
Buy Sell Buy

Top Volume Leaders

Open Mkt
Sell

symbol
85.70 Jah.Sidd. Co. Lotte Pakistan PTA Hub Power Co. Attock Refinery D.G.K.Cement

open
12.24 12.00 35.15 121.52 28.65

high
12.78 12.14 35.90 127.59 29.25

low
12.30 11.90 34.16 121.75 28.73

close
12.55 11.94 35.54 127.23 28.99

vol. (Mn)
8.85 5.33 5.32 3.88 3.12

85.30 116.16 1.03 84.09

85.50 116.43 1.03 84.29

85.30 118.60 1.04 84.60

119.10 1.05 84.70

Foreign Investors Portfolio Investment (FIPI)

Particulars
Trading activities of foreign investors on Nov 12, 2010 Trading activities of foreign investors from Oct 12, 2010 to Nov 12, 2010 Trading activities of foreign investors from July 01, 2010 to Nov 12, 2010
*Conversion rate USD/PKR 86

Gross Buy (Rs.)

249,560,259 7,896,749,290 33,286,947,862

Gross Sell (Rs.)

-140,918,656 -5,790,334,229

Net Buy/(Sell) USD (Rs.)

108,641,603 2,106,415,053 1,263,274 24,493,198

-19,384,750,054 13,902,197,767 162,518,672

Commodities
Cotton cents/lb Crude Oil (WTI)$/bbl Gold $/ozs Copper Cent/pound Wheat USD/bushel Malaysian Palm Oil Sugar NO. 11 cents/pound 123.15 81.98 1,352.30 384.25 684.00 1,084.00 26.15

Economic Indicators
GDP Growth FY10E Per Capita Income FY10 Forex Reserves (29-Oct-10) Inflation CPI% (Jul 10 - Sep 10) Imports (Jul 10 - Sep 10) Trade Balance (Jul 10 - Sep 10) Current A/C (Jul 10 - Sep 10) Foreign Investment (Jul 10 - Sep 10) Revenue (Jul 10 - Sep 10) Foreign Debt (Jun-10) Domestic Debt (Aug-10) Repatriated Profit (Jul 10 - Sep -10) 4.10% $1,051 $16.95bn 14.17% $12.25bn $(5.08)bn $(545)mn $455.10mn Rs 310bn $55.63bn Rs 4863.4bn $124.90mn

International Markets
Indeces Dow Jones Hang Seng BSE 30 Nikkie 225 Rate 11,203.55 23,284.41 19,585.44 9,774.71 1day change% 0.01% 16.26% -3.57% -0.54% YTD % 7.44 6.46 12.14 -7.32

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