Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Deterioration for ACWI ex-US, EAFE, and EM, continued bearish-leaning indicators, and the downward trajectory of bond yields leads us to remain cautious and concerned that global equities remain vulnerable and could be poised for additional weakness moving forward. Major indexes around the world continue to do next to nothing, making Sector, Group, and stock selection all the more important. We prefer to use a barbell strategy of growth and safety. Attractive and actionable themes highlighted in today’s report include IT Services/Tech Software, Communications, Precious Metals, and Utilities.

Deterioration for ACWI ex-US, EAFE, and EM, continued bearish-leaning indicators, and the downward trajectory of bond yields leads us to remain cautious and concerned that global equities remain vulnerable and could be poised for additional weakness moving forward. Major indexes around the world continue to do next to nothing, making Sector, Group, and stock selection all the more important. We prefer to use a barbell strategy of growth and safety. Attractive and actionable themes highlighted in today’s report include IT Services/Tech Software, Communications, Precious Metals, and Utilities.

Global Equity Strategy: Stay on the Defensive

External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

Pakistan cement manufacturers posted profitability decline of 3% YoY (pretax profits down 15%) during 1QFY18 vs. double digit growth of 17% and 32% seen in 1QFY17 and 1QFY16, respectively. Our analysis is based on a sample of 15 listed cement producers (out of a total of 18) which represents 99.7% of total cement companies’ market capitalization.During 1QFY18, sector sales grew by 11% YoY, mainly supported by 21% growth in local dispatches (total volume up 15%).  Performance of local dispatches…

Pakistan cement manufacturers posted profitability decline of 3% YoY (pretax profits down 15%) during 1QFY18 vs. double digit growth of 17% and 32% seen in 1QFY17 and 1QFY16, respectively. Our analysis is based on a sample of 15 listed cement producers (out of a total of 18) which represents 99.7% of total cement companies’ market capitalization.During 1QFY18, sector sales grew by 11% YoY, mainly supported by 21% growth in local dispatches (total volume up 15%).  Performance of local dispatches…

Pakistan Cements: Sector Profits -3%, Pretax Profits -15% YoY in 1QFY18

Investing in high growth Asian frontier economies., Asia Frontier Capital

Scott Osheroff

Investing in high growth Asian frontier economies.

Asia Frontier Capital

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

I had the opportunity in early October 2016 to attend a three-day fund manager conference organized by one of our Pakistani brokers in Lahore (one day) and two days in Karachi, followed by my own visits to some of our investee companies and a number of promising companies pinned down by our research efforts...

I had the opportunity in early October 2016 to attend a three-day fund manager conference organized by one of our Pakistani brokers in Lahore (one day) and two days in Karachi, followed by my own visits to some of our investee companies and a number of promising companies pinned down by our research efforts...

Asia Frontier Capital Travel Report: Pakistan

Frontier and emerging markets (Vietnam)

Dylan Waller

Nomadic Equity

Pakistan's UpgradePakistan received its well deserved emerging market upgrade from MSCI last week, and valuation still remains below its historical high experienced when it was previously an emerging market.  Now is a strong time to swoop in to profit from Pakistan's future upside, as the market has the potential trade at up to 13.8X its earnings, based on its historical valuation.  Unfortunately, this is a case where simple exposure through an ETF, the <a href="https://www.smartkarma.com/entities/21016" target="_blank" data-smartkarma-citation="entities:21016">Global X Msci Pakistan Etf</a>, is not an…

Pakistan's UpgradePakistan received its well deserved emerging market upgrade from MSCI last week, and valuation still remains below its historical high experienced when it was previously an emerging market.  Now is a strong time to swoop in to profit from Pakistan's future upside, as the market has the potential trade at up to 13.8X its earnings, based on its historical valuation.  Unfortunately, this is a case where simple exposure through an ETF, the Global X Msci Pakistan Etf, is not an…

Top Industries for Investment as Pakistan Transitions to an Emerging Market

Equity Bottom-Up

Maple Leaf Cement Factory / Equity Bottom-Up

Pakistan's cement industry is poised for substantial growth, which will be driven by the China Pakistan Economic Corridor.  Maple Leaf Cement is the top performing stock in this industry, and represents a strong compliment to the three previously mentioned companies, which all have new plants that they will fully develop by 2018-2019.

Pakistan's cement industry is poised for substantial growth, which will be driven by the China Pakistan Economic Corridor.  Maple Leaf Cement is the top performing stock in this industry, and represents a strong compliment to the three previously mentioned companies, which all have new plants that they will fully develop by 2018-2019.

Pakistan

Attock Cement Pakistan Limited manufactures and sells cement and related products. The Company is also part of the Pharaon group, which in addition to investments in the cement industry also owns interests in the oil and gas sector.

Attock Cement Pakistan (ACPL PA)

Global Equity Strategy: Stay on the Defensive

Deterioration for ACWI ex-US, EAFE, and EM, continued bearish-leaning indicators, and the downward trajectory of bond yields leads us to remain...

Vermilion Research

Pakistan Cements: Sector Profits -3%, Pretax Profits -15% YoY in 1QFY18

Pakistan cement manufacturers posted profitability decline of 3% YoY (pretax profits down 15%) during 1QFY18 vs. double digit growth of 17% and 32%...

Topline Securities

Asia Frontier Capital Travel Report: Pakistan

I had the opportunity in early October 2016 to attend a three-day fund manager conference organized by one of our Pakistani brokers in Lahore (one...

Asia Frontier Capital

Top Industries for Investment as Pakistan Transitions to an Emerging Market

Pakistan's UpgradePakistan received its well deserved emerging market upgrade from MSCI last week, and valuation still remains below its historical...

Nomadic Equity

Pakistan's Top Performing Cement Company

Pakistan's cement industry is poised for substantial growth, which will be driven by the China Pakistan Economic Corridor. Maple Leaf Cement is...

Nomadic Equity