JS Highlights of the day

February 27, 2023 REP - 084

PSX Snapshot
Indices KSE30 KSE100 KSE100: Gainers Price Price ∆ % ∆ Futures Mkt. Open Interest
Index Level 15,351.53 40,784.13 PSEL 1,965.00 95.00 5.08% Volume Value
DoD points change 25.65 76.37 UBL 113.10 5.40 5.01% mn sh Rs mn
DoD % change 0.17% 0.19% HGFA 4.49 0.16 3.70% TRG-MAR 39.19 4,427.68 View from the Desk
YTD CY23 3.47% 0.90% INIL 67.15 2.06 3.16% OGDC-MAR 5.53 475.64 Lackluster session was witnessed at
YTD FY23 -2.87% -1.82% BNWM 21.64 0.64 3.05% PSO-MAR 2.81 335.95 the bourse as market closed at
52 week High 17,942.72 46,601.54 UNITY-MAR 24.87 328.31 40,784, losing 76 points compared to
52 week Low 14,080.47 38,342.21 KSE100: Losers Price Price ∆ %∆ ATRL-MAR 1.91 321.89 the previous close. Traded volume
THALL 174.90 (8.48) -4.62% TPLP-MAR 19.91 308.64 stood at 158mn shares where WTL
PSX Market Capitalization PAKT 720.01 (31.24) -4.16% PPL-MAR 4.53 299.87 (2.3%), HUBC (0.9%), TPLP (4.5%), HBL
PSX Market Cap (Rs bn) 6,316.62 SRVI 232.08 (8.49) -3.53% ENGRO-MARB 0.76 229.40 (0.8%) and MLCF (1.5%) were the
PSX Market Cap (US$ bn) 24.34 GHGL 36.68 (0.99) -2.63% DGKC-MAR 4.32 177.22 volume leaders. Going forward,
DoD % change -0.06% OLPL 19.48 (0.51) -2.55% SNGP-MAR 4.19 172.75 market performance would largely
YTD CY23 -2.83% PRL-MAR 13.24 170.73 depend on clarity over the IMF deal.
52 week High (Rs bn) 7,764.51 Volume Leaders Price mn sh Rs mn HUBC-MAR 1.94 137.81
We recommend investors to adopt a
52 week Low (Rs bn) 6,134.08 WTL 1.33 39.55 52.92 LUCK-MAR 0.32 135.65
buy-on-dips strategy in the Banking,
12 Month Average (Rs bn) 6,910.92 HUBC 70.61 22.67 1,594.87 NRL-MAR 0.89 131.90
E&P and Fertilizer sectors.
TPLP 15.32 11.94 182.66 PIOC-MAR 2.12 124.32
PSX Ready Turnover HBL 70.14 6.19 430.23 SHEL-MAR 1.25 112.31
Mubashir Anis Naviwala
Total Volume (mn shares) 158.08 MLCF 25.09 4.51 113.19 MLCF-MAR 4.45 112.05
muhammad.mubashir@js.com
Total Value (Rs. bn) 5.72 AVN-MAR 1.69 108.82
Total Value (US$ mn) 22.03 PSX Futures Curr. CNERGY-MAR 30.08 107.97
mn sh Rs mn
52 week ADTO (mn shares) 218.54 Details Spread FCCL-MAR 8.17 96.42
52 week ADTO (Rs bn) 6.78 TRG-MAR 4.06 456.64 14.90% NETSOL-MAR 1.28 95.73
52 week ADTO (US$ mn) 31.65 HUBC-MAR 3.64 256.58 3.20% GGL-MAR 8.60 87.84
ATRL-MAR 0.97 164.08 5.69% SYS-MAR 0.16 79.76
Regional Markets Curr. %∆ CYTD OGDC-MAR 1.86 161.62 0.25% APL-MAR 0.24 74.11
China (SSEA) 3,258.03 -0.3% 5.5% PPL-MAR 1.44 95.84 4.37% TGL-MAR 1.05 64.90
India (BSESN) 59,288.35 -0.3% -2.6% PIOC-MAR 1.61 93.98 12.82% SEARL-MAR 1.16 63.49
JS Global Capital Limited
Indonesia (JKSE) 6,854.78 0.0% 0.1% MLCF-MAR 2.93 73.74 2.14% PTC-MAR 10.37 63.23 The Centre, 17th Floor, Plot No. 28,
Korea (KOSPI) 2,402.64 -0.9% 7.4% TPLP-MAR 4.52 70.17 15.44% SSGC-MAR 5.52 60.50 SB-5, Abdullah Haroon Road, Karachi
Malaysia (KLSE) 1,455.50 -0.1% -2.7% PSO-MAR 0.42 50.02 13.84% AIRLINK-MAR 2.50 57.19 Phone: +9221 111-574-111
Philippines (PSI) 6,599.34 -1.3% 0.5% NRL-MAR 0.33 48.81 11.67% GHNI-MAR 0.64 55.68
Taiwan (TWII) 15,503.79 0.0% 9.7% TOTAL 36.49 1,808.22 9.20% TOTAL 309.99 9,955.32 JS Research is available on Bloomberg, Thomson
Reuters, CapitalIQ and www.jsgcl.com
This report has been prepared for information purposes by the Research Department of JS Global Capital Limited. The information and data on which this report is based are obtained from sources which we believe to be reliable but we do not guarantee that it is accurate or complete. 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. This report should also not be considered as a reflection on the concerned company’s management and its performances or ability, or appreciation or criticism, as to
the affairs or operations of such company or institution. Warning: This report may not be reproduced, distributed or published by any person for any purpose whatsoever. Action will be taken for unauthorized reproduction, distribution or publication.
 JS Highlights of the day

Buy-back transactions snapshot

LUCK ENGRO KOHC KTML

Buy-back Window

From 29-Sep-22 03-Feb-23 01-Mar-23 13-Mar-23

To 27-Mar-23 25-Jul-23 19-Aug-23 29-Aug-23

Buy-back Details

Shares (in mn) 10 70 5 30*

% of outstanding shares 3.1% 12.1% 2.5% 10.0%

% of Free Float 8.8% 22.1% 8.3% 33.4%

Shares bought back to date (in mn) 7.8 4.7 - -

Avg. Purchase price (Rs/share) 441.6 299.4 - -

% of Buy-back Completed 78.3% 6.8% 0.0% 0.0%

Remaining shares (in mn) 2.2 65.3 5.0 30.0

Source: PSX, JS Research *an EOGM of the Company will be held on Friday, March 3, 2023 at company's registered office in Lahore for approval 2
 JS Highlights of the day

Impact of IFRS 9 adoption

Please find below impact of IFRS 9 adoption on books as reported in CY22 accounts.

Allied Bank Limited Bank Alfalah Limited

Rsmn Rs/share Rsmn Rs/share

One-time equity impact 937 0.82 One-time equity impact 937 0.82

CY22 Pre-IFRS 9 Post-IFRS 9 CAR changes CY22 Pre-IFRS 9 Post-IFRS 9 CAR changes
CET I 18.51% 18.39% -0.12% CET I 18.51% 18.39% -0.12%
Tier I 18.51% 18.39% -0.12% Tier I 18.51% 18.39% -0.12%
Total 19.74% 19.72% -0.02% Total 19.74% 19.72% -0.02%

Other notes: Other notes:

100% of the equity investments will be categorized under FVOCI. The bank has disclosed that it would continue to provide the
outstanding General Provisioning stock of Rs5.97bn in light of current
economic uncertainty and not reverse it post IFRS 9 adoption.

Source: Company accounts, JS Research 3

 JS Highlights of the day

Impact of IFRS 9 adoption

Please find below impact of IFRS 9 adoption on books as reported in CY22 accounts.

Habib Bank Limited Bank Al Habib Limited

Rsmn Rs/share Rsmn Rs/share

One-time equity impact 6,072 4.14 One-time equity impact 1,717 1.55

CY22 Pre-IFRS 9 Post-IFRS 9 CAR changes CY22 Pre-IFRS 9 Post-IFRS 9 CAR changes
CET I CET I
Tier I Not Reported Tier I Not Reported
Total Total

Other notes: Other notes:

81% of the equity instruments will be categorized under FVOCI. The bank disclosed that the one-time BV decline does not include the
outstanding General Provisioning stock of Rs5.75bn (before tax)

Source: Company accounts, JS Research 4

 JS Highlights of the day

Higher rates and expanding fiscal deficit – Banks to open direct credit lines for the government
CY21: Present picture of banks' exposure to public / govt 10YR PKRV reaches 14-year high (%)
loans as % of Total loans 20 16.65 15.46
46%
15
32% 31% 31% 29% 27% 22% 10
20%
11% 11% 9% 8% 5
0

Apr-10

Apr-21
Feb-12

Feb-23
Aug-06

Aug-17
Dec-02

Dec-13
Oct-04

Jun-08

Oct-15

Jun-19
BOP

UBL

HBL

BAHL
MEBL

MCB

HMB
FABL
ABL

NBP

BAFL
AKBL

Longest negative spread phase between 10YR and 3M 3M PKRV just shy of 20% (%)
10 PKRV since 2002 (%) 30 19.62
5 20
0 10
-5 0

Apr-21
Apr-10
Aug-06

Feb-12

Aug-17

Feb-23
Dec-02

Jun-08

Jun-19
Oct-04

Dec-13

Oct-15
Oct-04

Oct-15

Feb-23
Apr-10

Apr-21
Aug-06

Feb-12

Aug-17
Dec-02

Dec-13
Jun-08

Jun-19

News flows suggest the government is likely to tap the banking sector for fresh borrowings amid increasing funding needs as the government's fiscal deficit is expected to breach the
budgeted Rs4.5trn (5.4% of GDP) by 38% to Rs6.2trn (7.4% of GDP). This would likely avoid any competitive bidding process and would provide the government funds earlier than the
scheduled government securities auctions, and also at relatively lower rates.
Banks may also consider the product as the lending would lift ADR, carrying zero risk for adequacy calculations.
For perspective, government has already borrowed net Rs4.4trn through government securities auctions in 7MFY23 (total auctions less maturities). On the other hand, data suggests net
external debt payments of ~US$900mn in 1HFY23 (~Rs200bn) versus budgeted borrowing of Rs1.6trn. For more details, please refer to our note, 'Banks to open direct credit lines for the
government', released today.

Source: MUFAP, Company accounts, JS Research 5