Group Presentation

Group-III
Honourable Supervisor
Ms. Kalsoom Akhtar
Lecturer
Member Syndicate IUB
Deputy Director QEC
School of Business, Management & Administrative Sciences BJ Campus Bahawalpur
 Group Members
MS-2nd Semester (FINANCE)
1) Mr. Naveed Ahmad

2) Mr. Arslan Liaqat

3) Ghulam Mustafa Shakar

4) Mr. Muhammad Fiaz

5) Mr. Ammar Saleem

6) Mr. Arif Mahmood

Group-III MS Weekend Program (Finance Specialization)

 Presentation Topic

Investment Decision of One Million Rupees in

Top Four Sectors/Firms of Pakistan Stock

Exchange.
Pakistan Stock Exchange
Formerly Known As Karachi Stock Exchange (Gurantee) Limited

Established on 18th September 1947

New Setup After Merger of Lahore, Islamabad and Karachi Stock Exchanges
Founded on 11th January 2016 , Known as Pakistan Stock Exchange (Centralized
System)

Source: https://www.psx.com.pk/psx/exchange/profile/about-us
 Pakistan Stock Exchange
Total Sectors: 37
Total Listed Companies: 540
Total Market Capitalization: $52Billion
Selected Sectors For Analysis: 4
 Selected Sectors For Investment

 0828 Technology & Communication

 0810 Food and Personal Care Products

 08 07Commercial Banks

 0809 Fertilizer
 (Sector Wise Comparison) Year-2018
No. of Companies Co’s that Announced Co’s Paying Dividend Profit Making Co’s that Profit Making Loss M
Annual Results Omitted Dividend Co’s
- END MUTUAL FUND  7 2 - - - 2
RABAS 31 28 17 3 20 8
NG COMPANIES 9 7 2 2 4 3
ANKS / INV. COS. / SECURITIES COS. 29 24 5 8 13 11
MERCIAL BANKS 20 19 12 7 19 -
ANCE 29 26 15 5 20 6
STATE INVESTMENT TRUST 1 1 1 - 1 -
E SPINNING 75 67 24 9 33 34
E WEAVING 11 8 3 1 4 4
E COMPOSITE 52 41 23 9 32 9
LEN 2 2 2 - 2 -
ETIC & RAYON 10 9 4 2 6 3
2 2 - - - 2
R & ALLIED INDUSTRIES 30 27 13 2 15 12
NT 20 19 13 4 17 2
CCO 3 3 2 1 3 -
ERY 4 4 2 2 4 -
R GENERATION & DISTRIBUTION 18 15 10 1 11 4
GAS MARKETING COMPANIES 8 7 7 - 6 1
GAS EXPLORATION COMPANIES 4 4 4 - 4 -
EERING 17 16 9 2 11 5
MOBILE ASSEMBLER 12 12 8 2 10 2
MOBILE PARTS & ACCESSORIES 10 9 5 2 7 2
& ELECTRICAL GOODS 7 7 3 2 5 2
SPORT 4 3 2 - 2 1
OLOGY & COMMUNICATION 12 12 5 3 8 4
IZER 7 7 7 - 7 -
MACEUTICALS 12 12 12 - 11 1
ICAL 27 26 17 3 20 6
& BOARD 10 9 6 - 5 4
SPATI & ALLIED INDUSTRIES 6 4 3 - 3 1
ER & TANNERIES 5 5 2 1 3 2
 (Sector Wise Comparison) Year-2019
No. of Companies Co’s that Announced Co’s Paying Dividend Profit Making Co’s that Profit Making Loss M
Annual Results Omitted Dividend Co’s
- END MUTUAL FUND  7 2 - - - 2
RABAS 30 27 14 5 19 8
NG COMPANIES 9 7 2 2 4 3
ANKS / INV. COS. / SECURITIES COS. 29 24 6 7 13 11
MERCIAL BANKS 20 19 13 5 18 1
ANCE 28 25 13 5 18 7
STATE INVESTMENT TRUST 1 1 1 - 1 -
E SPINNING 70 64 22 9 31 33
E WEAVING 11 8 3 3 6 2
E COMPOSITE 52 41 25 9 34 7
LEN 2 2 - 1 1 1
ETIC & RAYON 10 9 3 2 5 4
2 2 - - - 2
R & ALLIED INDUSTRIES 29 28 15 5 20 8
NT 20 19 11 6 17 2
CCO 3 3 1 - 1 2
ERY 4 4 - - - 4
R GENERATION & DISTRIBUTION 17 16 7 6 13 3
GAS MARKETING COMPANIES 8 7 5 - 4 3
GAS EXPLORATION COMPANIES 4 4 4 - 4 -
EERING 17 15 4 5 9 6
MOBILE ASSEMBLER 12 12 5 2 7 5
MOBILE PARTS & ACCESSORIES 9 9 4 1 5 4
& ELECTRICAL GOODS 6 6 3 2 5 1
SPORT 4 4 2 - 2 2
OLOGY & COMMUNICATION 12 12 5 3 8 4 (Com
IZER 6 6 4 - 4 2
MACEUTICALS 12 12 11 - 11 1
ICAL 27 25 14 6 20 5
& BOARD 10 9 5 - 5 4
SPATI & ALLIED INDUSTRIES 6 3 3 - 3 -
ER & TANNERIES 5 5 2 1 3 2
 Reasons Behind Selected Sectors
Technology & Communication (Sector-I)
Pakistan’s IT exports increased by 44% to USD 379 million during the first quarter of the fiscal year 2020-21,
and there is a lot of potential to grow more and explore avenues to enhance software export.

Zero income tax on IT & ITeS exports.

100% foreign ownership of IT & ITeS companies & 100% repatriation of profits to foreign investors of
Technology sector.

As per recent survey, demand for stocks of the Technology and Communication (T&C) sector spurred in the
current pandemic.

Work from home model accelerated the digital revolution. In addition, the listing of TPL Trakker also increased
the market capitalization T&C.

Total No. of Listed Companies in Sector:13

Total Turnover of Listed Companies: 19.28% (36,993,552/191,834,857).

Source: https://dailytimes.com.pk
Source: https://dps.psx.com.pk/sector-summary
 Reasons Behind Selected Sectors
Technology & Communication (Sector-I)
Pakistan has more than 2000 IT companies & call centres and the number is growing every year.
Pakistan has more than 300,000 English speaking IT professionals with expertise in current and
emerging IT products and technologies, 13 Software technology parks, More than 20,000 IT graduates
and engineers are being produced each year coupled with a rising start-up culture.

Pakistan’s Information Technology (IT) sector is carving a differentiated position as the preferred source
for software development, BPO and freelancing. Pakistan was ranked at number four for freelance
development in the world and IT exports have increased 70% during the last three year.

IT Sector is one of the fastest growing sectors of Pakistan showing positivity every year.

In accordance with Pakistan Vision 2025 and the Digital policy of Pakistan 2018, the ICT industry size is
targeted to reach $20 billion by 2025.

The Information Telecommunication (IT) and IT-enabled Services (ITeS) export remittances comprising
computer services and call center services surged to $1.11 billion at a growth rate of 20.75 percent in
the first 11 months of fiscal year 2019-2020 (July–May)
 Reasons Behind Selected Sectors
Food & Personal Care (Sector-II)
 Food and Personal Care Companies Moving Towards Circular Economy.
The food and personal care products is the third largest sector of PSX having 9%
weight (up to March 2020) in the total market capitalization of the PSX.
Total Listed Companies in Sector: 24
 Total Turnover of Listed Companies: 11.93%(22,889,890/191,834,857)
 Profit/Loss Making Companies: 15 (75%) + 5(25%)
 Reasons Behind Selected Sectors
Commercial Banks(Sector-III)
The banking sector is the biggest sector of PSX having 18% weight in the total market
capitalization of the PSX.

 The banking sector is the back bone of an economy of any country particularly for Pakistan
and played a significant role in the mobilization of money in country.

 As per recent report, banking sector showed highest positive contributions (456 points)
amongst other sectors of Pakistan Stock Exchange.

Total Number of Listed Banks: 20

Profit/Loss Making Banks: 19(95%)+1(5%)

Note: One bank (Summit Bank) had not declared its annual result.

Source: https://tribune.com.pk/story/2302332/psx-ends-historic-week-in-green
 Reasons Behind Selected Sectors
Fertilizer (Sector-IV)
 The fertilizer sector is the fifth largest sector of PSX having 7% weight in
the total market capitalization of the PSX.

 Demand of the fertilizer industry is directly aligned with growth in

agricultural sector. The sector accounts for 21% of the GDP and absorbs
around 44% of the country’s workforce.

 As per recent report dated 30th May 2021, fertilizer sector showed positive
contribution of 89 points.

 Total Number of Listed Companies: 6

 Profit/Loss Making Companies: 4(66.66%) + 2(33.33%)

Selection Criteria For Companies
Requirement: One Top Listed Company in Each Opted Sector

Criteria: After selecting the sectors we have selected one top

company from each sector on the basis of
following indicators/scales.
 Market Capitalization
 Earnings Per Share
 EPS Growth Rate (%)
 Selection Criteria For Companies
Measurement/Formulas of Criteria
Market Capitalization: Current Market Price Per Share x Total No. of Outstanding
Shares

Earning Per Share(EPS): Net Available to Common Equity/No. Of Common Shares

EPS Growth Rate: Share Price/EPS

 Selected Listed Companies in Sector-I
Technology and Communication
 Systems Limited.

 Avanceon Limited.

 PTCL

Source: https://dps.psx.com.pk/sector-summary
Scale-I: Market Capitalization
(Comparison of Sector’s Companies)
Scale-II: Earnings Per Share (EPS)
(Comparison of Sector’s Companies)
Scale-III: EPS Growth Rate
(Comparison of Sector’s Companies)
Scale-IV: 5 Years Market Trend of Share Price
(Comparison of Sector’s Companies)
 Investment Decision
 Current Market Price Per Share: Rs.558.86. After analysing technical and fundamental indicators we
are hopeful that market price of Systems Ltd. share will continue to rise in next 3 months up to Rs. 680
per share.
So, Investment Amounting to Rs. 200,000 Be Made in Stocks of System Limited Company.
 No of Share Purchased: 200,000/558.86 = 358
 Expected Profit: Rs.43,368 (358x121.14)
 Reasons/Justifications for Investment:

o Top firm (highest market share price) in Technology and Communication Sector.

o Higher Market Capitalization as compare to other companies and it hold 28% of Sector.

o Earnings Per Share is Constantly Moving Forward (It means management is efficient).

o EPS Growth Rate is Higher as Compare to other firms despite of Covid-19.

o 5 Years Historical Data of market trend of share price depicts that Systems Limited stock

price is increasing at a higher rate as compare to others.

 Selected Listed Companies in Sector-II
Food & Personal Care Products
 Frieslandcampina Engro Pakistan Limited.

 Nestle Pakistan Limited.

 National Foods Limited.

Source: https://dps.psx.com.pk/sector-summary
Scale-I: Market Capitalization
(Comparison of Sector’s Companies)
Scale-II: Earnings Per Share (EPS)
(Comparison of Sector’s Companies)
 Scale-III: EPS Growth Rate
(Comparison of Sector’s Companies)
Scale-IV: 5 Years Market Trend of Share Price
(Comparison of Sector’s Companies)
 Investment Decision
Current Market Price Per Share: Rs 5820. After analysing technical and fundamental indicators we
are hopeful that market price of Nestle Pak Ltd. share will continue to rise in next 3 months up to
Rs 7500
 So, Investment Amounting to Rs. 400,000 Be Made in Stocks of System Limited
Company.
 No. of Shares Purchased: 400,000/5820 = 69
 Expected Profit: Rs.115,920 (69x1680)
Reasons/Justifications for Investment:
 The Nestle Company recorded a revenue of PKR 32.3 billion for the last three months period ended 31st
March 2021, an increase of 8.2% compared to the same period last year, whereas Friesland Campina
reported a revenue of Rs. 11.6 billion during the quarter registering a 18% growth versus last year and
National Foods Limited showed Rs.25.55 billion, with 22% growth.
 Net Profit Ratio up to 31st March 2021 of three companies is given below.
i. The Nestle Company: 9.9%
ii. Friesland Campina: 4.7%
iii. National Foods Limited: 6.1%
 The Nestle Company, Pakistan is holding higher market capitalization up to 35% of the market.
 Changes in EPS Growth Rate occurred in a slight way as compare to other two companies of this sector.
 Selected Listed Companies in Sector-III
Commercial Banks
 MCB Bank Limited.

 HBL Bank Limited.

 Meezan Bank Limited.

Source: https://dps.psx.com.pk/sector-summary
Scale-I: Market Capitalization
(Comparison of Sector’s Companies)
MCB HBL Meezan Others

14%

14%

59%

13%
 Scale-II: Earnings Per Share (EPS)
(Comparison of Sector’s Companies)
30

25

20

15 MCB
HBL
Meezan
10

0
2017 2018 2019 2020
(Comparison of Sector’s Companies)

120

100

80

60 MCB
HBL
Meezan
40

20

0
2017 2018 2019 2020
Scale-IV: 5 Years Market Trend of Share Price
(Comparison of Sector’s Companies)
 Investment Decision
Current Market Price Per Share: Rs 158.50. After analysing technical and fundamental
indicators we are hopeful that market price of MCB Limited share will continue to rise in
next 3 months up to Rs 179
 So, Investment Amounting to Rs. 200,000 Be Made in Stocks of MCB
Limited.
 No. of Shares Purchased: 200,000/158.50 = 1262
 Expected Profit: Rs.25,871 (1262x20.5)
Reasons/Justifications for Investment:
 The Board of Directors of MCB Limited has declared first interim cash dividend of Rs. 4.5 per share
for the first quarter ended March 31, 2021 whereas HBL Management has declared an interim cash
dividend of Rs 1.75 per share for same period and Meezan’s Board has approved Rs.1.5 per share as
interim dividend. (Main Reason)
 EPS Growth Rate of MCB Limited is showing positivity since last three years as compare to HBL
where fluctuation rate is very high.
 Market Trend of Share Price is positive at present .
 MCB Limited has hold 14% market capitalization in commercial banking sector.
 Selected Listed Companies in Sector-III
FERTILIZER
 Engro Corporation Limited.

 Fauji Fertilizer Company Limited.

 Engro Fertilizers Limited.

Source: https://dps.psx.com.pk/sector-summary
Scale-I: Market Capitalization
(Comparison of Sector’s Companies)
Engro Corporation Ltd Fauji Fertilizer Company Ltd Engro Fertilizers Ltd Others

22%

33%

19%

26%
 Scale-II: Earnings Per Share (EPS)
(Comparison of Sector’s Companies)

30

25

Engro Corporation Ltd.

20
Fauji Fertilizer Company Ltd.
15
Engro Fertilizers Ltd.
10

0
2017 2018 2019 2020
 Scale-III: EPS Growth Rate
(Comparison of Sector’s Companies)

80
60
40
Engro Corporation Ltd.
20 Fauji Fertilizer Company Ltd.
0 Engro Fertilizers Ltd.

-20
-40
-60
-80
Scale-IV: 5 Years Market Trend of Share Price
(Comparison of Sector’s Companies)
 Investment Decision
Current Market Price Per Share: Rs 297.18. After analysing technical and
fundamental indicators we are hopeful that market price of Engro Corporation share
will continue to rise in next 3 months up to Rs 320
 So, Investment Amounting to Rs. 200,000 Be Made in Stocks of
Engro Corporation.
 No. of Shares Purchased: 200,000/297.18 = 673
 Expected Profit: Rs.15,358 (673x22.82)
Reasons/Justifications for Investment:
 Engro Corporation is holding 33% market capitalization in fertilizer sector which is higher to
other companies.
 EPS Growth Rate of Engro Corporation is showing positivity since last three years.
 Market Trend of Share Price is positive at present (Rs.1.41 per share increase)
 The Company revenue grew by 58%, during 1st quarter of 2021 WHEREAS Fuji Fertilizer
Company earning growth rate was 36% during same period and Fuji Fertilizer earned profit up
to 22.40%.
 Expected Profit After 3 Months Of Investing
One Million Rupees in PSX
• Sector 1 = Rs 43,368.
• Sector 2 = Rs 115,920.
• Sector 3 = Rs 25,871.
• Sector 4 = Rs 15,358.
• Total = Rs 200,517.
• Profit Percentage = 20.05%