Market Wrap Declines take a timeout KSE100 Index 29,940|High 30,025|Low 29,694|Change +246|Value USD63mn|Vol 110mn Pakistan equities closed with gains on Wednesday, breaking the six day losing streak primarily triggered by positives on political front as cleric led PAT called off 70 day long sit-in in Islamabad. Investors cheered on hopes that despite PAT calling for nationwide protests and PTI continuing its sit-in in Islamabad, this move will help ease political tensions. KSE100 index pushed by oil stocks tested 30,000 in early trade while gains in MCB Bank MCB PA +1.5% and Engro Corp ENGRO PA +2.7% helped counter profit taking in index heavy illiquids. Maple Leaf Cement MLCF PA -0.7% that announced lower than estimated first quarterly earnings, led volumes and churned over 45% of KSE100 index and ended the day lower. We see benchmark to test 30,000 and trade volatile with investors focus on profits and payouts during earnings season. Market will remain sensitive to flows from foreigners and news flow of over politics in days ahead and we advise buying value plays (NML, UBL, DGKC, ENGRO, PPL and LUCK) and booking gains in illiquids. KEY EARNINGS: Maple Leaf Cement announced 1Q EPS PKR1.03/sh, down 2% YoY but up 30% QoQ, against our estimate of PKR1.5/sh. Top line expanded by 6% YoY however higher than estimated finance costs, distribution expenses and tax rate dented bottom line. Finance costs were down by 22% YoY while gross margins clocked in at 35%, up 3pp YoY but below our expectation of 37% on higher fuel costs where we believe company might have used older expensive coal inventory. Note that coal prices have fallen by 8% QoQ in 1QFY15. Tax rate clocked in at 31% against our estimate of 20% which further dented bottom line. At last closing, MLCF offers an upside of 16% to our June 2015 PT of PKR34/sh. BUY! Faisal Bilwani fbilwani@elixirsec
Posted on: Thu, 23 Oct 2014 08:45:00 +0000
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