Karachi Stock Exchange Weekly Analysis 29 April, 2012

The Karachi Stock Exchange (KSE) market has witnessed mixed movement during the week. KSE – 100 index has reached 14,042.77 points by gaining 106 points or 0.76 percent. KSE has finally breached the psychological level of 14,000 points. Average volumes during the week declined by 4% WoW to 256 million shares, however, whereas average traded value increased by a healthy 15% WoW to stand at US$95 million.

Despite intra‐day attempts, the market failed to rally higher and ended up with a soft 0.8% gain. Significantly though, it managed to hold its ground above the 14k level. Volumes receded slightly to 257mn shares/day while values traded were up 11% to US$80mn/day.

With result season approaching its end (remaining results include those for AICL, FATIMA and NCL. The market is likely to focus on the fine points of the recent Presidential Ordinance alongside developments on the political and macro fronts. Regarding the latter, Mar’12 inflation data will be released next week (CPI likely to clock in north of 11%) while budget-related news flow continues to come in thick and fast. Considering the cement sector has been in the limelight of late, release of cement dispatches data next week could prove to be an important checkpoint.

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

  • The eagerly anticipated CGT Presidential Ordinance was finally unveiled, easing investor jitters over the timing and possible changes in regulations
  • Politics was the second dominant theme this week where the PM was convicted of contempt charges by the apex court and was handed a symbolic sentence
  • SECP (Securities Exchange Commission of Pakistan) approves rules for Index Option contracts, which would provide alternate trading mechanism to traders
  • Fertilizer sector witnessed relatively better offtake numbers for the month of Mar-12 as urea and DAP segments witnessed MoM growth of 65% and 294%, respectively
  • For the broader market, the week was a busy one, with corporate results pouring in and influencing stock‐specific movements
  • Foreign investors were more aggressive this week as net inflows of US$12.8mn were recorded compared to net inflows of USD8.1mn last week (up 58%WoW)
  • WB (World Bank) has approved US$ 1.8 billion loan for the energy sector projects
  • Indefinite postponement of 3G license auction of USD630mn and low GDP figures of 3.2% during 9MFY12 against the target of 4% brought some negativity in the market
  • Mergers and Acquisitions in Banking sector to be re-initiated. Bank-al-Falah acquiring IGI Investment Bank and Fauji Foundation getting the approval by SBP for due diligence for Askari Bank Limited
  • Nepra allowed Discos to raise tariff by Rs2.38/unit for Feb & Mar

Ghani Glass, Pakistan Tobacco Company, Unilever Pakistan Foods, Pak Suzuki Motors, EFOODs, FFBL, LPCL and Murree Brewery were the major gainers while K.E.S.C., Pakistan Reinsurance, E.F.U. General Insurance, Jahangir Siddiqui & Co, DGKC, NML and Agritech Limited were major losers last week.

The top-5 scrips at the futures counter holding 62% of the total open interest were ENGRO, DGKC, NBP, AHCL and ATRL.

Experts and analysts are recommending an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (top picks in the energy chain). And among other liking also extends to FFC, FFBL, ENGRO, FCCL, Lucky, DGKC, MCB and PTC.


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 21 April, 2012


The Karachi Stock Exchange (KSE) market has witnessed mixed movement during the week. KSE – 100 index has reached 13,936 points by gaining 137 points or 0.99 percent. Intraday volatility with relatively flat closings (barring Wednesday) remained order of the week as KSE‐100 index failed to conquer the psychological 14,000 mark. While the market did venture into the 14k territory on Friday, it failed to sustain and closed just below that mark.

However, intra-day volumes declined by 28% WoW basis averaging 269mn shares while average traded value declined by only 9% WoW to stand at USD82mn. Foreign investors poured in more money in Pak equities this week as net foreign inflows stood at USD8.14mn against net inflows of only USD2.3mn last week. There were few better developments on economic front for Mar-12, as current account stood in surplus of USD142mn and tax collection figure exceeded 9%YoY to Rs155bn (24% YoY during 9MFY12).

No concrete development on the newly proposed CGT regime. Any development on the much-awaited CGT SRO should be a positive while, on the flipside, a delay in the same may add weight to calls for a technical correction in the KSE-100 Index.

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


  • FBR plans to suggest 1% cut in corporate tax
  • US pledges US$110mn aid amid talks over NATO supplies
  • Foreign direct investment falls 48% in 9MFY12
  • Current account turns surplus in March‐2012
  • MCB declined on the back of SBP’s decision to raise the floor on saving accounts from 5% to 6% with the bank having a higher proportion of saving a/c deposits
  • The result season will be at its peak in next week where big banks (including BAFL, MCB, HBL, ABL & BAHL) are scheduled to announce results. Other than banks, prominent stocks i.e. POL, PSO, LOTPTA, NML and LUCK will also announce their results next week and should impact market direction
  • Current Account register surplus of USD142 million in Mar-12
  • Gov't raised Rs150bn through T-Bill, yields remain unchanged
  • Cement prices remain firm as ABAD calls off strike on price issue


Abbot Laboratories, EFOODS, Adamjee Insurance, Bestway Cement, Murree Brewery, LUC  and D.G. Khan Cement were the major gainers while Indus Dyeing, P.I.A.C. (A), MCB, Soneri Bank, Packages Limited and Fauji Fertilizer Bin Qasim were major losers last week.

The top-5 scrips at the futures counter holding 60% of the total open interest were ENGRO, DGKC, AHCL, NBP and FFC.

Experts and analysts are recommending an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (top picks in the energy chain). And among other liking also extends to FFC, FCCL, FFBL, INDU, NML, Lucky, DGKC, MCB and PTC.

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 14 April, 2012

The Karachi Stock Exchange (KSE) market was dull and range bound. KSE was cooling off ahead of quarterly results. KSE – 100 index has reached 13,799 points by losing 76 points or 0.5 percent. On numerous occasions the index tested the 14,000 level, however lacked the momentum to make any significant in‐roads into 14,000 territory.

The Average daily volumes declined by 3.3% to 374 million shares while foreigners turned net buyers worth US$ 2.3 million.

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

  • SBP (state Bank of Pakistan) in its monetary policy statement maintained a status quo on discount rate at 12%
  • Economic Coordination Committee (ECC) approved institutional investments in National Saving Schemes (NSS)
  • SECP in its budgetary proposal asked for a gradual reduction in corporate tax rate
  • GoP asked Etisalat to make payment of the pending PTCL sale proceeds
  • Remittances recorded US$1.14bn in Mar‐12
  • LSM production up 6% YoY in Feb
  • 3‐year term for KSE board approved
  • Big ticket names such as FFBL, FFC, DGKC, POL and APL are featuring in the list of companies announcing their score cards next week
  • Break-through in the Pak-US relations with resuming NATO supplies and CFS restored by US, kept the investors upbeat
  • Finance Minister has said that there will be no new tax in next budget
  • Engro reduces DAP price by Rs100/bag following int'l price decline
  • Power sector again owes Rs192bn to PSO


Packages Limited, Adamjee Insurance, Pak Suzuki Motor Co. Ltd., HCAR, AICL, PSMC, UBL, Askari Bank Ltd., United Bank Ltd., Pakistan Telecommunication, Fauji Cement Company Ltd., Pak Petroleum Ltd., Indus Motor Company Limited, National Bank Of Pakistan, Nishat (Chunian) Limited, Bestway Cement, K.E.S.C., and NetSol Technologies were the major gainers while EFOODS, EPCL, FFC, ENGRO, LUCK, Pace (Pak) Ltd, TRG Pakistan, Jahangir Siddiqui & Co, E.F.U. General Insurance and Arif Habib Corporation were major losers last week.

According to experts, Banks could see some pressure in the early part of next week due to the higher minimum deposit rate for saving deposits.

The top-5 scrips at the futures counter holding 62% of the total open interest were ENGRO, NBP, DGKC, AHCL and FFC.

From an investment perspective, we recommend an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (our top picks in the energy chain). Our liking also extends to FFC, Lucky, DGKC, FCCL, APL, FFBL, ENGRO, NML and PTC where robust business models and strong fundamentals make these names a worthwhile play.


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 8 April, 2012

The Karachi Stock Exchange (KSE) market has witnessed a bullish trend. KSE – 100 index has reached 13,875.53 points by gaining 113.77 points or 0.82 percent, and is just 124.47 points away from 14,000 points crucial level. The benchmark index managed to test 14,000 points crucial level in the weekend session after almost 4 years(since 16 May, 2008). Late profit-selling, however, dragged the index down to the closing level. While KSE – 30 index has reached 12,183.37 points by gaining 69.24 points or 0.57 percent.

The average daily turnover improved by five percent to 387 million shares during the outgoing week. The market capitalisation surged by Rs37 billion to Rs3,565 billion. On the contrary, foreigners sold net shares worth $1.6 million in the week.

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

  • The KSE is believed to advance the buying rally ahead of the financial results for the quarter ended on March 31
  • Capital gains tax (CGT) SRO/Presidential Ordinance would remain the key to unlock further values
  • According to experts banking sector would lead the buying rally on the back of seemingly robust earnings for the March-end quarter
  • Cement stocks would also extend their heartiest support to the advancing index, as investors would continue to buy such stocks on the back of rise in the commodity prices and sales volumes in the local market. Cement stocks remained in the limelight on the back of increase in export price to Afghanistan and expectations of healthy earnings
  • Petroleum prices raised by 4‐6%
  • Profit rates on National Saving Schemes (NSS) raised
  • CPI inflation eases to 10.8% in Mar‐12
  • Cotton production hits all‐time high of 14.67mn bales
  • As soon as Pakistan opens NATO supplies, the United States would reimburse $1.5 billion to Pakistan under the Coalition Support Fund (CSF), which will be good for the economy and for the stocks, as well
  • Restoration of gas supply to Engro Corp’s new plant also kept the stock in the investors’ radar. While lower-than-expected inflation numbers for March did not have any impact on the market sentiments
  • Amongst macro indicators, CPI for the month of Mar-12 stood below 11% to 10.79% YoY excluding recent jump in petroleum prices (4%-8%)
  • FBR to cut corporate tax rate to 32% in budget FY13
  • FBR to increase tax on Banks by 5% to 40% in budget FY13
  • Byco Refinery has been approved a 7-year tax holiday
  • HSBC decides to quit its business from Pakistan

BYCO Petroleum, Engro Polymer, Standard Chartered Bank, Pace (Pak) Ltd, and Lucky Cement were the major gainers while Pak Cables, Philip Morris Pak, NIB Bank, Ghani Glass and P.I.A.C. were major losers last week.

The top-5 scrips at the futures counter holding 67% of the total open interest were ENGRO, DGKC, NBP , LUCK and AHCL.

From an investment perspective, we maintain our bullish stance towards the energy chain with PPL, APL, PSO, OGDC, POL, Hubco, and NCPL are our preferred picks. We also believe FCCL, ENGRO, FFBL, FFC, NBP, DGKC, Lucky, DGKC and PTC warrant a closer look as they offer a combination of inexpensive valuations, healthy upside potentials and double‐digit dividend yields at current levels.

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 1 April, 2012

The Karachi Stock Exchange (KSE) market has witnessed a bullish trend. KSE – 100 index has reached 13,761.76 points by losing of 488.47 points or 3.7 percent. While the KSE 30-share index rose by 532.22 points, or 4.59 percent.

During the outgoing week, the average daily volumes improved by 48 percent to 368 million shares. The market capitalisation also surged by Rs126 billion to Rs3,582 billion. Foreigners, after six weeks, turned sellers by selling shares worth $7.7 million in the week. Please note that it is the highest level achieved during last four years (since May, 2008), and according to analysts market will cross psychological level of 14,000 points soon.

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

  • Government has delayed CGT (Capital Gain Tax) reform imposition, and law & order situation in Karachi. But it didn’t have much of an impact on the sentiments of investors
  • Pakistan and US relations are getting improved
  • OGRA has announced increased fuel prices
  • The joint sitting of the parliament passed the bill on corporatisation, demutualisation and integration of the stock exchanges during the week
  • Investors are expecting healthy earnings in cement and bank sector.
  • NPIH (National Power International Holding) has decided to offload 17.44 percent shares of HUBCO, pending regulatory approval at the price of Rs 31 per share. The stock price of HUBCO outperformed the market by 10 percent
  • National Fertilizer Development Centre’s (NFDC) report for February shows that fertilizer offtake for the month drastically declined by 65 percent on yearly basis to 199,000 tonnes
  • Cement prices have been increased, Rs 10 per bag
  • Foreigners, after six weeks, turned sellers by selling shares worth $7.7 million
  • The monetary policy announcement scheduled for April 13 was expected to maintain status-quo with discount rates standing at 12 percent
  • Politics is expected to endure a choppy few weeks as the apex court is due to announce its verdict on the National Reconciliation Ordinance’s implementation case in mid-April. Moreover, the issue of reopening NATO supply routes has been under discussion at the highest level, which was expected to end with a firm decision soon
  • Aggressive tax collection on fiscal side exceeding Rs 1,122 bn (28% YoY) during Jul-Feb 2012 and efforts of government to reinitiate the privatization program through finalizing the SPO of PPL also supported the investor's confidence in the market
  • Fx reserves increased to 0.27% WoW to USD16.44bn
  • Pakistan is looking toward Russia for IP gas project
  • India offers Pakistan 5,000MW of electricity, offer accepted
  • Government signs accord with World Bank for additional US$150mn and borrowing from SBP at PRs1.39tn

Faysal Bank, Askari Bank, Pace (Pak) Ltd, BYCO Petroleum, Lafarge Pakistan Cement Ltd, Askari Bank Ltd., Maple Leaf Cement Factory Limited, National Bank Of Pakistan, Bank Al-Falah Limited, Hub Power Company Limited, Nishat Mills Ltd., Nishat (Chunian) Limited., D. G. Khan Cement Co., NIB Bank Limited, Lotte Pakistan PTA Ltd. and TRG Pakistan were the major gainers while Colgate Palmolive, Pakistan Reinsurance, Engro Polymer, Bata Pakistan and Pak. Int. Cont. Ter. Ltd. were major losers last week.

The top-5 scrips at the futures counter holding 59% of the total open interest were ENGRO, DGKC, NML , FFC and NBP.

According to experts, top picks include ENGRO, FFC, PPL, APL, PSO, OGDC, POL, NCPL, NBP and HUBC. While FFC, Lucky, DGKC and PTC warrant a closer look as they offer a combination of inexpensive valuations, healthy upside potentials and double‐digit dividend yields at current levels.

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