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-II (FINANCE)
1) Mr. Naveed Ahmad

2) Mr. Arslan Liaquat

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
Vision
A world class exchange for Pakistan.
Mission
PSX contributes to the economic development of
Pakistan by providing a fair, transparent, and
efficient marketplace to facilitate capital formation for
the benefit of investors, issuers and all stakeholders.
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
 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            
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 1
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
& PERSONAL CARE PRODUCTS 21 20 12 3 15 5
 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.

Zero Income tax for PSEB registered IT start-ups.

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 +1

Note: One 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:
 Profit/Loss Making Companies:
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
 Sales Volume
 Earnings Per Share
 EPS Growth Rate (%)
 Dividend Per Share
 Dividend Payout Ratio
 Selection Criteria For Companies
Measurement/Formulas of Criteria
Market Capitalization: Current Market Price Per Share x Total No. of Outstanding
Shares

Sales/Turnover: Total No. Of Units Sold x Sale Price Per Unit

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 & Communication)
 Systems Limited

 Avanceon Limited

 Pakistan Telecommunication Company Limited (PTCL)

Source: https://dps.psx.com.pk/sector-summary
Scale-I: Market Capitalization
(Comparison of Sector’s Companies)
Scale-II: Sales/Turnover Comparison
(Comparison of Sector’s Companies)
Scale-III: Earnings Per Share (EPS)
(Comparison of Sector’s Companies)
Scale-IV: EPS Growth Rate
(Comparison of Sector’s Companies)
Scale-V: 5 Years Market Trend of Share Price
(Comparison of Sector’s Companies)
 Investment Decision
 Investment Amounting to Rs. Be Made in Stocks of System
Limited Company
 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 Sales Growth Rate is Faster as Compare to

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: Sales/Turnover Comparison
(Comparison of Sector’s Companies)
 Scale-III: Earnings Per Share (EPS)
(Comparison of Sector’s Companies)
Scale-IV: EPS Growth Rate
(Comparison of Sector’s Companies)
Scale-V: 5 Years Market Trend of Share
Price
(Comparison of Sector’s Companies)
 Investment Decision
 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.