Market Analysis and Stock Recommendations
United Bank Limited (UBL)
- Last Close: 216.92
- Stance: Bullish
- Strategy: Buy
- Support Levels: S1 214.80, S2 212.50
- Pivot Point: 216.64
- Resistance Levels: R1 218.03, R2 219.14, R3 220.53
- Stop Loss: 210.00
Fundamental View: UBL has shown significant improvement in its current account savings account (CASA) ratio, reaching 88% in CY23. This has facilitated an expansion in net interest margins (NIMs), driven by strong deposit growth of 27% year-over-year (YoY) since CY22. The bank’s robust performance is further evidenced by its recent half-yearly results, where it announced dividends amounting to PKR 44 per share for the full year, resulting in an average yield of 33% in CY23.
Maple Leaf Cement Factory Limited (MLCF)
- Last Close: 37.51
- Stance: Bullish
- Strategy: Buy
- Support Levels: S1 36.50, S2 36.20
- Pivot Point: 37.81
- Resistance Levels: R1 38.40, R2 39.30, R3 39.89
- Stop Loss: 36.00
Fundamental View: MLCF is currently trading at an attractive valuation of EV/Ton of USD 24. The company reported healthy margins of 30% in 9MFY24, attributed to efficiencies in fuel and power usage. Additionally, a decline in local and Afghan coal prices is expected to bolster gross margins moving forward.
Nishat Mills Limited (NML)
- Last Close: 73.21
- Stance: Bullish
- Strategy: Buy
- Support Levels: S1 72.50, S2 71.80
- Pivot Point: 73.00
- Resistance Levels: R1 74.21, R2 75.20, R3 76.41
- Stop Loss: 71.50
Fundamental View: NML is a major player in Pakistan’s textile sector, with revenues exceeding half a billion dollars. The company also has a significant investment portfolio, largely consisting of investments in its associates and group companies. The total portfolio value is approximately PKR 130 per share, even after applying a 25% conglomerate discount, indicating considerable upside potential for the stock.
Nishat Power Limited (NPL)
- Last Close: 39.27
- Stance: Bullish
- Strategy: Buy
- Support Levels: S1 38.80, S2 38.00
- Pivot Point: 38.41
- Resistance Levels: R1 40.13, R2 40.98, R3 42.70
- Stop Loss: 37.50
Fundamental View: NPL is trading at a discount based on its net receivables and the net present value (NPV) of future capacity payments, which stand at PKR 48.5 per share and PKR 45 per share, respectively. Despite the routine buildup of power sector circular debt, projections indicate strong cash flow generation, supported by a return on equity (ROE) of 17% until 2035 and consistent fuel savings. The company is expected to maintain a dividend yield (DY) of 19-20% from FY25/26 onwards.
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