Pakistan Equities earnings mostly disappointed – Elixir Research
By: Faisal Bilwani
Elixir Securities Pakistan (Pvt.) Ltd.
Pakistan equities closed little changed after volatile trading as gains in index heavy Oil & Gas Dev Co OGDC PA +2.9% and MCB Bank MCB PA +1% were countered well by profit taking in broader market. Earnings announcements (details below) were mostly disappointing however foreigner’s continuous inflow and local institutional cherry picking kept interest alive volumes at a somewhat respectable level. Illiquid yet index heavy pharma stocks mostly hit upper price limit on rumors of a possible go ahead on hike in prices that have been frozen for many years. Pakistan State Oil PSO PA -2.8% traded red on fears on sharp resurgence in energy sector circular debt while Engro Foods EFOODS PA -3.7% hit 11 month low after guidance from company yesterday that suggests possible decline in earnings for the ongoing quarter.
We see stocks to trade volatile with broader market tracking flows. Investors will closely follow foreigner’s activity but are likely to remain net sellers ahead of the weekend with financials leading the laggards pack in our view.
Key earnings announced today:
Hub Power HUBC PA announced 1Q EPS PKR1.57, down 14% YoY and 9% QoQ. This is lower than Elixir estimated PKR1.94/share.
MCB Bank MCB PA announced 9M EPS PKR17, +4% YoY. Earnings for the quarter clocked in at PKR5.2, down 1% YoY. MCB also announced a cash payout of PKR3.5/sh for 3Q taking 9M payout to PKR10.5/sh, in line with our expectations.
United Bank UBL PA announced earnings for 9M 2013 at PKR10.5/share, down 8% YoY and above expectations. Earnings for 3Q clocked in at EPS PKR3.8, down 2% YoY. UBL also declared a dividend of PKR2/sh, taking 9M payout to PKR6/sh, in line with our expectations.
Pakgen Power PKGP PA announced 9M 2013 results at EPS PKR2.97 down 31% YoY. Earnings for the quarter were PKR0.22/sh significantly below our expectations.
Kot Addu Power KAPCO PA announced 1Q EPS PKR1.96, -2% YoY and +2% QoQ below our expectations.
Bank Islami BIPL PA announced its 9M 2013 financial results today. It posted EPS PKR0.08, -89% YoY. Earnings for the quarter clocked in at PKR0.07, down ~74x YoY.