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management
Final Assignment
SUBMITTED BY:
Omer Fayyaz Paracha
Bilal rehman
The stocks that we have chosen for the purpose of the project are as follows:
1. Attock Refinery Limted
2. Indus Motors Co
*INDUS MOTORS CO
Indus Motor Company Limited (IMC) incorporated in 1989 as a joint venture company between
the between the House of Habib (HOH), a local conglomerate and Toyota Motor Corporation
(TMC) and Toyota Tsusho Corporation (TTC) of Japan. The company manufactures and markets
Toyota and Daihatsu brand automobiles for domestic consumption. The main product offerings
include several variants of the flagship Corolla in the passenger cars category, Hilux in the
light commercial vehicles segment and Fortuner in Sport Utility Vehicle (SUV) segment.
During last two months of the 3rd quarter, refinery margins started to improve.
Stability in Pak Rupee versus the US Dollar has helped the company suffering from
heavy losses in earlier quarters of the year. Profit has increased from 1.92 million to
1.937.81 million.
Attock refinery has declared a better annual total cash dividend of 50% for their
shareholders.
The company successfully recovered from circular debt crisis and however has
maintained a better position in its liquidity.
Beta: 0.1632
Annual Dividend: Rs. 50
Earnings per Share: Rs. 45.91
Share Price: Rs. 210.96
2. INDUS MOTORS
The investment in Indus Motors has been opted for because of the following
reasons:
Auto sales have therefore increased by 6 percent annually since 2012.
Pakistani rupee is strengthening against Japanese Yen and also the demand
for cars have therefore increased so its likely to improve future profit
margins with better returns.
Past five year analysis showed that the annual dividend and earnings per
share growth ranked in line with the industry averages and eventually have
improved fromRs. 22.50Rs. 54.74
RESULTS
ATTOCK
REFINERY
0.021145
INDUSMOTORS
KSE - 100
0.01156
0.02
Standard
Deviation
0.7611
0.4198
0.8019
Correlation
0.1719
1.1531
0.6310
Sharpe Ratio
Treynor
Measure
Porfolio Beta
Expected
Return
0.02001
0.03757
0.09124
0.01172
Total Returns
The standard deviation of the stocks is comparatively average . The standard deviation of an
asset shows the variability of distribution of returns about its mean or expected value. The
standard deviation of Attock Refinery is the highest which indicates that its a risky investment.
Similarly, the risk of Indus motors co. is the lowest.
WEIGHT
ATTOCK
WEIGHT TBILLS
42%
18%
40%
42% Of the investment has been done in INDUS MOTOR Co. because the correlation of INDUS
motor Co. and Attock Refinery Limited is 0.1719 which is low.
Securi
ties
Attock
Indus
T-Bill
Ending/closi
ng rate
216.74
381
95.27359941
Market
Value
No. Of
Current
Current
Shares
price
Market Value
830.4881
180000
425
210.96
175199.7785
1102.362
420000
205
430
474015.748
400000 4198.434 98.39086
413087.6347
1000000
458
SUM
Actual
Return
1062303.161
0.062303161
0.00519193
0.519193011
Investment options
We were provided with 1 million from which we had to decided how much to invest in stocks
and T-bill. We decided to invest 18% of the investment to invest in Attock refinery limited
because it has higher standard deviation which results in high risk. However the return is
relatively high. The remaining investment from which 42% was invested in Indus motor co
because it is less risky having low standard deviation whereas its return is average compared to
Attock. 40% of the investment which was left over we decided to invest in risk-free which show
that the investment is secured.