omc: no mention; hence safe - BMA Capital Management

High Conviction Stock Ideas
Company Ticker
10
June 7, 2010
1992 17-Jun -3.0% 14.4% 6.1% -3.1% 0.6% -11.0%
1991 18-Jun 2.6% 2.5% 20.9% -4.3% 5.6% 35.2%
1990 19-Jun -0.6% -1.0% NA -2.0% 5.0% 4.1%
Average (since 1990) 1.4% -1.0% -0.1% -1.1% 1.0% 3.6%
Average (since 1998) 2.0% -4.4% -1.5% -1.8% -1.1% 2.9%
Source: BMA Research
Current
Price
Having said that, inter-play of global markets may play a more important role
though. Post short lived respite in international markets, financial crisis
emanating from European Union debt crisis has again played havoc in capital
markets.
Keeping these in view, we remain conservative in our investment themes: 1)
pricing power, 2) devaluation positive revenue stream, 3) downside protection
from dividend yields and 4) value with growth. Moreover, we reiterate the need
for concentrated portfolios with investments limited in stocks with greater
degree of certainty. In short, maintaining our 2010 KSE100 index target at
11,500 we (re)flag our high conviction investment ideas as PSO, PPL, HUBC,
ACPL and LUCK while we add MCB in the list on the back of its recent share
price decline and upwards revision in valuations.
Fair
Value
Pot
Upside
EPS (PKR) PER(x) EPS Growth Dividend Yield
PKR/share PKR/share FY09A/E FY10E FY09A/E FY10E FY09A/E FY10E FY09A/E FY10E
Pakistan Petroleum PPL 186 236 27% 27.8 23.4 6.7 8.0 41% -16% 6% 5%
Pakistan State Oil PSO 271 409 51% (39.1) 52.3 NM 6.1 NM NM 2% 2%
MCB Bank MCB 192 245 28% 20.4 22.5 9.4 8.5 1% 11% 6% 7%
Attock Cement ACPL 66 98 48% 17.2 14.1 3.8 4.7 243% -18% 6% 4%
Lucky Cement LUCK 64 87 37% 14.2 12.9 4.5 4.9 72% -9% 6% 3%
Hub Power Company HUBC 33 43 29% 3.3 4.6 10.0 7.2 45% 40% 10% 15%
BMA Universe Average
Source: BMA Research
8.9 7.8 2% 14% 7% 7%