Karachi Stock Exchange Weekly Analysis 27 November, 2011

The Karachi Stock Exchange (KSE) market activity was bearish. KSE – 100 index has reached 11,648.14 points by losing of 289.67 points or 2.4 per cent. The KSE-100 index closed negative in four out of the five trading sessions during the week, following a 0.8% (99 points) decline in the previous week. Political uncertainty along with the International Monetary Fund’s bleak outlook for the country’s economy contributed to the index’s woes.

Following news have played vital role in Karachi Stock Market index movement:

  • Investors have concerns over political uncertainty, resignation of Hussain Haqani and Mullen memo controversy and institutional profit taking for the expectation of status quo in upcoming Monetary Policy on 30 November, 2011
  • Analysts said the International Monetary Fund (IMF) released its economic review of Pakistan highlighting macroeconomic challenges owing to energy crisis and pressures on the external account having a negative impact on investor sentiment
  • IMF released its economic review of Pakistan highlighting macro–economic challenges owing to energy crisis and pressures on the external account
  • Foreigners remained net sellers of $3.8 million
  • The government of Pakistan has raised the wheat support price to Rs 1,050 per 40 kilogrammes (kg) from Rs 950 for the same weight previously
  • The daily turnover declined 26.44 percent to 28.17 million shares as compared with 38.83 million shares of the previous week
  • Major fall in global stocks and commodities on concerns for US economic growth and Europe debt crises affected the investor sentiment
  • Trade remained thin despite OGRA announcements for raise in local gas tariff easing concerns for rising circular debt in the country
  • Experts remained sellers in FFC and recommend sell on strength for FFC. Their recommended price was 180 with a stop loss at 184.75. ENGRO and LUCK still look good, with a stronger bias towards ENGRO in the short term, they added. Increase exposure in ENGRO on close above 132 and in LUCK at 81.50. They said that their sell call in FFBL continued with a covering price of 50
  • NATO’s attack on Pakistan’s territory and reaction of leaders will also set market movement for upcoming week.
  • A hike in wheat support prices coupled with exploration drilling in Zin Block were some of the positives from an otherwise lacklustre week
  • IMF’s Assistant Director says power tariff hike not enough
  • PM gives “in‐principle” approval to 3G spectrum auction policy
  • Remittances up14%MoM in Oct-11 to stand at USD1.018
  • FBR temporarily withdraws 5% sales tax on zero rated sector
  • FX reserves drop to USD16.96 bn
  • Oil import bill surges by 53.9% in 4MFY12

Agritech Limited, Shifa Int Hospitals Ltd, Pak Cables, Security Paper Limited and Rafhan Maize were the major gainers while IGI Insurance, Packages Limited, Pace (Pak) Ltd, Siemens Engineering and International Steel Limited were major losers last week.

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram

Karachi Stock Exchange Weekly Analysis 20 November, 2011

The Karachi Stock Exchange (KSE) market activity was bearish. KSE – 100 index has reached 11,937.81 points by losing of 101.12 points or 0.83 per cent. The KSE-30 Index fall by 160.40 points, or 1.40 percent, to close at 11,222.58 points.

Following news have played vital role in Karachi Stock Market index movement:

  • Investors have concerns over political uncertainty, offer of resignation of Hussain Haqani and Mullen memo controversy
  • Uncertainty in global markets on eurozone debt crisis, concerns over foreign inflow from the local bourse post-earning announcement also played a catalyst role in the bearish sentiment
  • Upcoming Monetary Policy will h shape the short term market direction, which is expected by the end of this month
  • According to dealers, panic selling cannot be ruled out in case the political noise in intensified. Because noise factor is humming and is likely to escalate in coming weeks
  • According to NCCPL (National Clearing Company of Pakistan Limited) Foreign Portfolio Investors have sold shares of worth $1.3 million
  • Furqan Ayub, an analyst at JS Research, said that foreign portfolio investment witnessed an outflow of $102.1 million in the last four months (July/October) against an inflow of $101.3 million in the corresponding period last year
  • Analyst at the KASB Securities said that the outcome of Pakistan-IMF talks and clarity on the resolution of inter-corporate debt could be a swing factor in determining market sentiments
  • Federal Cabinet has approved a four percent tariff hike in power sector
  • The analyst believes this will likely to add weight towards Pakistan’s case in obtaining a clean chit from the IMF and negotiating a $2 billion loan from the World Bank and the Asian Development Bank for power sector restructuring
  • Higher oil prices and new discoveries of oil has created interest of investors in E&P (Exploration and Production) sector
  • Fauji Fertilizer Company underperformed the market by 6.1 percent as investors feared reversal in the fertiliser price after the gas supply to the fertiliser manufacturing companies was restored
  • According to the SBP data, the non-performing loans rose by Rs38.3 billion during July/September to Rs613 billion. The pace of increase in the NPLs was much higher than in the previous two quarters

Pak Telephone, International Industries, Standard Chartered Bank, Atlas Honda and Indus Motors were the major gainers while Media Times Limited, P.I.A.C. (A), Tandlianwala Sugar, NetSol Technologies and IGI Insurance were major losers last week.

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram

Karachi Stock Exchange Weekly Analysis 13 November, 2011

The outgoing week saw only two trading sessions against the usual five sessions due to holidays on account of Eid and Iqbal Day. The Karachi Stock Exchange (KSE) market activity was bullish. KSE – 100 index has reached 12,038.93 points by gaining of 81.63 points or 0.68 per cent. The KSE-30 Index surged by 90.41 points, or 0.80 percent, to close at 11,382.98 points. The Karachi Stock Exchange (KSE) is expected to maintain buying momentum next week on trading in energy, banking and fertiliser stocks ahead of the next monetary policy due this month.

Following news have played vital role in Karachi Stock Market index movement:

  • Faisal Rajab Ali, a stockbroker, expects a cut of 50 basis points in the discount rate in the next monetary policy
  • Positive sentiments were witnessed on support from energy and oil sectors on hopes of early resolution of circular debt on $2 billion support from World Bank and Asian Development Bank
  • Restructuring of T-bills and meeting of Indo-Pak leadership also supported the market
  • The restoration of gas supply to Engro Corporation for 15 days may invite fresh buying in the fertiliser stocks
  • Any development on the government move to convert circular debt in the power sector into the government securities would accordingly invite buying in power, energy and banking stocks
  • Oil and Gas Development Company, Pakistan Petroleum Limited, Pakistan Oilfields, Pakistan State Oil, MCB Bank and the National Bank of Pakistan would be the major beneficiaries of resolution of the circular debt issue through adopted strategy
  • The ongoing week, therefore, recorded buying in energy, banking and fertiliser stocks due to the discovery of oil and gas reserves in Nashpa fields in Kohat and a large size gas discovery in Zin Block
  • The average weekly turnover, however, fell by 40 percent to 44 million shares due to low participation of investors. The overall market capitalisation increased by 19 billion to Rs3,135 billion

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram

Karachi Stock Exchange Weekly Analysis 6 November, 2011

The Karachi Stock Exchange (KSE) market activity was bullish. KSE – 100 index has reached 11,957.30 points by gaining of 395.63 points or 3.4 per cent. The KSE 30-share index surged 397.48 points, or 3.64 percent, to 11,292.57. According to analysts, KSE – 100 index will cross the psychological level of 12,000 points in next week. But the market has a long weekend this time due to Eid and if anything untoward happened during the holidays, the market would react accordingly.

Following news have played vital role in Karachi Stock Market index movement:

  • There were rumours that the government released funds to PSO to ease circular debt concerns in the energy sector
  • Pakistani Rupee gaining strength during the week and touching a three-month high of Rs 86.16 (15 weeks highest value) versus the dollar
  • Investment remained bullish in fertilizer stocks on higher local urea prices and approval for release of gas to fertilizer producers despite concerns over approval of rise in gas prices in fertilizer sector
  • The week started off on a positive note owing to reports of hike in urea prices by Engro. Engro is still facing gas suspension at its new urea plant due to which the company raised its urea prices
  • Investors have also some serious concerns over domestic political scenario and global economic outlook
  • The energy sector would lead the rally as Pakistan State Oil, Oil & Gas Development Company and Pakistan Petroleum would be the major beneficiaries of the resolution of circular debt issue
  • Gas load management plan was approved during the week and it was decided that two out of four fertilizer plants on Sui Northern Gas Pipeline Limited network would not be supplied gas in November
  • PSO announced higher-than-expected Q1 FY12 result of Rs 14.50 per share (up 207 percent on yearly basis), while Engro posted nine months 2011 earnings of Rs 14.21 per share (up 27 percent)
  • The daily turnover fell by 31.08 percent to close at 55.88 million shares as compared to 81.08 million shares of the previous week. The average daily turnover fell by 2.5 percent to 73.4 million shares from 75.3 million shares last week. The overall market capitalisation rose by Rs95 billion week-on-week to Rs3,116 billion
  • “If the government manages to attract banks to buy its one-year treasury-bills and five-year Pakistan Investment Bonds (PIBs) worth Rs391 billion to resole power sector circular debt, the current buying rally at KSE would go farther,” said Faraz Farooq, an analyst at First Capital Equities
  • CPI up 10.96% YoY in Oct‐11
  • Cement Sales up 0.74% YoY in October
  • Tax collection rises 24% YoY to PRs492bn in 4MFY12
  • Power tariff raised by Rs1.77/unit, raising inflation concerns

Pace (Pak) Ltd, Jahangir Siddiqui & Co, Engro Corporation, Pakistan State Oil and Millat Tractors were the major gainers while Feroze1888, NetSol Technologies, Pak Cables, Shifa Int Hospitals Ltd and International Industries were major losers at KSE this week.

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram