BMA Today for April 17, 2019 
 
     WEDNESDAY 17 April 2019 
 
 

 

   

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At a Glance

Previous Market Session

Local Market    
 KSE 100 N.A N.A
 KSE T. Value PKRbn N.A N.A
 10YR PIB N.A N.A
 6M KIBOR N.A. N.A.
 PKR/USD N.A. N.A.
Asia Pacific    
 BSE SENSEX 30 N.A N.A.
 NIKKEI 225 N.A N.A.
 STRAITS TIMES INDEX N.A N.A.
 KUALA LUMPUR N.A N.A.
 JAKARTA COMP. N.A N.A.
 THAI SET 50 N.A N.A.
Middle East    
 DFM GENERAL N.A N.A.
 TADAWUL ALL SHARE N.A N.A.
 MSM30 INDEX N.A N.A.
 KUWAIT SE WEIGHTED N.A N.A.
 DSM 20 INDEX N.A N.A.
Global Markets    
 OIL (NYMEX) N.A. N.A.
 US 10YrBOND N.A. N.A.
 LIBOR6MTH N.A. N.A.
 FTSE 100 N.A N.A.
 DOWJONES N.A N.A.
 S&P 500 N.A N.A.
       
 
In Focus
Lotte Chemical Pakistan Ltd: Concerns on margin overplayed; outlook remains encouraging

   We tweak our earnings estimates for Lotte Chemical Pakistan Ltd (LOTCHEM) by 1-2% over CY19-21E incorporating (i) released details from annual accounts, (ii) tweaks in volumetric assumptions, and (iii) working capital deployment. PTA margins have held up steady after a bumper year and currently trade at USd167/ton compared to 1QCY19 average of USD139/ton. Consequently, we eye earnings for 1QCY19 to reside at PKR0.57/sh, up by 2.4x YoY as demand for PTA remained relatively muted while tapered margins prune an otherwise decent quarter. We do not foresee any payout accompanied with the result. Margin trajectory should continue to be largely dictated by the timing of the capacity additions for both, PTA and PX, which remain the key determining factor for the margin outlook. We expect some stability in the remainder of 1HCY19. We maintain our TP of PKR21/sh and reiterate our Buy rating on LOTCHEM presenting an upside of 43% from last close where 14% correction in the stock price over the past 3-mnths remains unjustified in our view. The stock trades at CY19E P/E of 5.0x, which implies PTA margin of only USD99/ton vs current margins of USD167/ton.

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Media Watch

Economy: Pakistans GDP growth to hover around 5 percent in 2019 GECS / The News
Sectoral: Govt mulls revision in fuel price adjustment for coal fired plants / The News
Sectoral: Senate body slams discrepancy in payments to IPPs / The News
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DISCLAIMER
This memorandum is produced by BMA Capital Management Limited and is only for the use of their clients. While the information contained herein is from sources believed reliable, we do not represent that it is accurate or complete and should not be relied upon as such. Opinions expressed may be revised at any time. This memorandum is for information only and is not an offer to buy or sell, or solicitation of any offer to buy or sell the securities mentioned.