The time to buy is when there's blood in the streets. The global stock market crisis triggered by fear of US economic slowdown and Europe debt crisis coupled with ongoing killings in Karachi has made local stocks cheapest in last two and a half year. The fear factor is still prevailing amongst the investors in Pakistan equities and we believe that the market has discounted most of these uncertainties. Thus when every body seems negative, we are bullish on the Pakistan market. Investors in short run may not make money as most of the fund managers are anticipating more selling by foreigners. But in the medium term, we believe, investors buying here will make above average profit on their investment.
At current prices, Pakistan market trades at forward PE of 5.3 (ex OGDC), PBV of 1.4 and offering dividend yield of 10% (ex OGDC). In terms of valuation Pakistan is cheapest since early 2009 when equities collapsed post infamous price floor due to dumping by foreign funds.
After a gap of two-and-a-half year, average dividend yield (based on Topline sample ex OGDC) has reached 10% on next years estimated profits. And there are many stocks (see table) offering dividend yield of more than 1-year T-Bill rate which currently is 13.4%. With global market fall and ongoing killings in Karachi , the valuations look good for investors want to invest in high dividend paying defensive stocks. In our note dated August 08, 2011 we highlighted three defensive stocks namely FFC, Hubco and PTCL. Since than these stocks have outperformed the benchmark index by 2-15%.
With June end financial results either announced or to be announced in coming weeks, many stocks are trading on cum dividend basis. That is in next 12-15 months the actual dividend will be far higher. For instance many companies will go ex-dividend between Aug-Oct. Thus an investor in next 15-months will get this year and next year dividends. Especially in the case of Attock Group companies like NRL and POL whose meetings are schedule for.
September 10 &11, 2011 will announce good payouts whose book closure dates are likely in the month of October. In case of POL we expect this year final dividend of Rs20-22 per share (making total Rs30-32 per share) and next year dividend of Rs35 per share. Similarly, for NRL we expect company to announce a final cash dividend of Rs30-35 per share, while we expect the company to payout around Rs37 per share next year.
At current prices, Pakistan market trades at forward PE of 5.3 (ex OGDC), PBV of 1.4 and offering dividend yield of 10% (ex OGDC). In terms of valuation Pakistan is cheapest since early 2009 when equities collapsed post infamous price floor due to dumping by foreign funds.
After a gap of two-and-a-half year, average dividend yield (based on Topline sample ex OGDC) has reached 10% on next years estimated profits. And there are many stocks (see table) offering dividend yield of more than 1-year T-Bill rate which currently is 13.4%. With global market fall and ongoing killings in Karachi , the valuations look good for investors want to invest in high dividend paying defensive stocks. In our note dated August 08, 2011 we highlighted three defensive stocks namely FFC, Hubco and PTCL. Since than these stocks have outperformed the benchmark index by 2-15%.
With June end financial results either announced or to be announced in coming weeks, many stocks are trading on cum dividend basis. That is in next 12-15 months the actual dividend will be far higher. For instance many companies will go ex-dividend between Aug-Oct. Thus an investor in next 15-months will get this year and next year dividends. Especially in the case of Attock Group companies like NRL and POL whose meetings are schedule for.
September 10 &11, 2011 will announce good payouts whose book closure dates are likely in the month of October. In case of POL we expect this year final dividend of Rs20-22 per share (making total Rs30-32 per share) and next year dividend of Rs35 per share. Similarly, for NRL we expect company to announce a final cash dividend of Rs30-35 per share, while we expect the company to payout around Rs37 per share next year.
No comments:
Post a Comment