BMA Today for February 23, 2018 
 
     FRIDAY 23 February 2018 
 
 

 

   

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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) 62.81

0.04
 US 10YrBOND N.A. N.A.
 LIBOR6MTH 2.13

0
 FTSE 100 7,252.39

29.18
 DOWJONES 24,962.48

164.7
 S&P 500 2,703.96

2.63
       
 
In Focus
Pioneer Cement Limited: Rising coal prices may put pressure on margin; Neutral

   We revise down our earnings estimates for Pioneer Cement Limited (PIOC) by 15-34% over FY18-20E incorporating (i) actual earnings of 1HFY18, (ii) 4-11% upward revision in coal prices estimates, (iii) tweaking sales volume, and (iv) delay in upcoming expansion (2.5mn tons).Consequently, we revise down our DCF-based TP for PIOC by 13% to PKR72 and amend our stance on the scrip by one notch from ‘Buy’ to ‘Neutral’ owing to declining earnings and rising leverage. Although we expect the upcoming projects of the company to be value accretive, we believe, increase in leverage in medium-term (from 13% in FY17 to 50% by FY19E) may stretch the payback period of the projects thus delaying the positives emanating thereon. PIOC posted EPS of PKR1.41/sh in 2QFY18 down 23%/60% QoQ/YoY (1H: PKR3.25/sh), mainly due to higher fuel cost leading to 7/12ppt QoQ/YoY drop in gross margins to 27% in 2Q). PIOC is currently trading at a premium to industry average (FY18E P/E of 8.1x is at 3% premium while EV/ton of USD104 is at 7% premium to industry).

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Media Watch

Economy: Indonesias Pertamina to sign LNG deal / Business Recorder
Economy: Pakistans short term borrowing rises to $1.77 billion in July Jan / The News
Economy: Import bill surges due to oil price spike / Dawn
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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.