Payouts to be in limelight in the coming result season


Recently, the market entered a dry spell as investors preferred to remain on the sidelines amid domestic political instability and US-Pak impasse. This is evident from fall in average volumes to 81mn shares per day in Jun-Jul 2012 compared to 280mn shares in Mar-May 2012. The re-opening of the NATO supply routes by Pakistan and likely disbursement of funds under the coalition support fund (CSF) along with the start of the corporate result season are likely to improve activity at the local bourse, in our view. From a corporate result season vantage point, the market has gained an average 3% in the Jul-Aug period during the last 10 years, while posting a positive return on 7 occasions in this period. In today’s briefing we highlight stocks that are likely to announce strong payouts along with their June end results.


Eyes on payouts as result season approaches

With the result season approaching, we can expect another bout of excitement in stocks announcing payouts with their results. Attock group companies (Pakistan Oilfields, Attock Petroleum, Attock Refinery and National Refinery) are likely to announce healthy payouts with their year end results. In other oil stocks, Oil and Gas Development and Pakistan Petroleum are also expected to announce strong payouts with their results. Cement stocks are expected to improve their payouts compare to their historical trend on the back of impressive growth in their earnings. On the other hand, despite weakened earnings due to gas shortages, fertilizer stocks are likely to announce decent payouts as well.



Though the market has gained a notable 26% in 2012 YTD, it still offers impressive earnings yield and dividend yield of 16% and 7%, respectively for FY13. Moreover, its P/E discount to the region presently stands at 50% vs. its historical average of 34%. We prefer high dividend yielding stocks like POL, APL, HUBC and KAPCO. Also, stocks like PPL, PSO, DGKC and NBP are available at compelling valuations.


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