Karachi Stock Exchange Weekly Analysis 27 May, 2012


The Karachi Stock Exchange (KSE) market was range bound and activities were remain stagnant. KSE – 100 index has reached 13,925.06 points by gaining 67.28 points or 0.5 percent.

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


  • Unresolved NATO supply issue coupled with worsening law and order situation in the city hurt investor sentiment 
  • As the federal budget is approaching (expected on 1st June, 2012), investors are very cautious and are hesitated on heavy investment. The most anticipated budget will set the directions of market for the future
  • A reversal of trend was seen from foreigners as they bought shares worth $12 million after last week’s selling 
  • TCP (Trading Corporation of Pakistan) has finalized the import of 0.1 million tons of Urea. The bid is approved of worth US$ 522.86 per ton
  • Pakistan banking spreads contract 8bp MoM to 7.22% in April 2012
  • SBP (State Bank of Pakistan) has announced that FX reserves have been increased by US$ 207 million and reached up to US$ 16.31 billion
  • Pak rupee has been depreciated to its ever high peak i.e. 1 US$ = Rs. 92.35
  • Rs873bn is proposed for PSDP in budget FY13
  • Banks NPLs down by 5.6% in 1QCY12
  • Remittances up by 20.2% YoY to USD10.9bn in 10MFY12
  • Govt is planning to import 500MW of power from India
  • Power rates up by Rs2.38/unit, Inflation to fuel further
  • Textile sector to continue facing 500mmcfd gas shortfall
  • A reversal of trend was seen from foreigners as they bought shares worth $12 million after last week’s selling 
  • Uncertain global stocks and lower global commodities on possible Greece exit from eurozone and limited foreign interest also affected the market sentiment


TRG Pakistan, Fauji Cement, Engro Corporation, Pak Services and Pakistan Reinsurance were the major gainers while Media Times Limited, E.F.U. Life Assurance, Dreamworld Ltd, Adamjee Insurance and Shell Pakistan were major losers in the benchmark KSE-100 this week.

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

We advocate a cherry picking approach and advise an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco, NML, DGKC, FCCL and NCPL (our top picks in the energy chain). In the banking space, MCB is our preferred play while EFoods also warrants a closer look.

Fertilizer sector were hard hit over the reports of potential increase in development cess on feedstock gas by 52% to PRs300/mmbtu, as producers’ ability to pass‐through the impact of PRs131/bag (with GST) hike remains uncertain. We estimate this could hit earnings by 6%/7.5% for FFBL and FFC 2012E in a worst-case scenario.

However, positivity was seen in cement sector scrips, which followed another increase of Rs10/bag during the week and expected Rs873bn allocation for PSDP in budget which will further boost cement demand going forward.

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

Written by: Rana Khurram

Karachi Stock Exchange Weekly Analysis 20 May, 2012


The Karachi Stock Exchange (KSE) market is continued to suffer heavy losses for the second consecutive week. The Karachi Stock Exchange (KSE) is likely to take its cue from the trend of global stock markets next week. KSE – 100 index has dropped from psychological level of 14,000 and 13,900, and reached 13,857.78 points by losing 372.71 points or 2.61 percent. While the KSE 30-share index decreased by 392.59 points, or 3.17 percent, to 11,980.80

Average volume plummeted by 45% and stood at 144 million shares per day compared to 261 million shares per day in the previous week. On the macro front, the country’s current account stood with a deficit of $3.39 billion for 10 months of the current fiscal year compared to a surplus of $446 million in the same period last year. The turnover dropped 25.84 percent and traded 175.70 million shares as compared with previous week’s 236.94 million shares.

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


  • Profit taking was witnessed especially from foreign portfolio investors. They have chose to cash in on the recent highs touched by the index and have offloaded $6 million worth equity during the week as their native markets continued to decline due to Euro zone debt crisis remained unresolved yet
  • As the federal budget is approaching (expected on 1st June, 2012), investors are very cautious and are hesitated on heavy investment
  • Pak-US relations are improving because Pak government has allowed supplies for US embassy in Kabul to cross into Afghanistan from Pakistan. Military and civilian aid is also expected in upcoming weeks
  • Government to extend PRs12.2bn sovereign guarantee to NITL
  • LSM sector records poor growth of 1.05% in 9MFY12
  • MoF considering local urea procurement proposal; Iran deal not likely
  • Government raises PRs143bn in T-bill auction
  • Current account deficit swells to US$3.39bn in 10MFY12


Philip Morris Pak Ltd, Tandlianwala Sugar, E.F.U. General Insurance, BYCO Petroleum and Pak Suzuki Motors were the major gainers while Media Times Limited, Lotte Pakistan PTA, Agritech Limited, D.G. Khan Cement and Pak. Int. Cont. Ter. Ltd. were major losers in the benchmark KSE-100 this week.

In the prevailing scenario, we advocate a cherry picking approach and advise an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (our top picks in the energy chain). We also see upside potential in FFC and PTC which boast strong fundamentals. In the banking space, MCB is our preferred play and we also add EFoods to our recommended list.

The cement sector came under pressure, after prices of cement bags were reduced by Rs25 in the northern region of the country. The sector, which has been the outstanding performer of the year, saw shares take a plunge as Lucky Cement and DG Khan Cement dropped 4% and 9% respectively.

Habib Bank Limited was on the receiving end as it was removed from the MSCI frontier index. The removal reduced Pakistan’s representation in the index from 4.7% to 4.4% and resulted in the HBL’s share dropping by 2% during the week.

The energy sector got some relief with the issuance of Rs82 billion worth of TFCs with the aim of resolving inter-corporate debt. Activity was also witnessed in the oil and gas sector where Pakistan Petroleum announced plans for acquisitions and to invest internationally, in Iraq. PPL is to bid for corporate acquisition of MND Exploration and Production Limited, the company has assets in Pakistan and Yemen. Moreover, Petroleum Ministry has sought GoP’s approval to authorize PPL to pursue Iraq’s exploration opportunity on standalone basis with US$100mn limit, or pursue a larger exploration programme in joint venture with another company. However, PPL underperformed the market by 0.2%WoW.

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

Written by: Rana Khurram

Top Ten Investment Tips

1. Diversify
The expression, "don't put all your eggs in one basket" is meaningful when it comes to money investing. Don't put all your money in one stock. Also, buy fixed income securities (i.e. bonds) and stocks. Don't pick only one type of investment.

2. Do Your Homework
Obtain and analyze as much information as possible before making your investment decisions. This will alert you of any problems a company may have, or what to expect from your investment.

3. Set Goals and Limits
Determine the price (high target price or low stop-loss price) at which you're willing to sell. Analyze interest rates to decide what return you want.

4. Don't Gamble With Money You Can't Afford To Lose

The less you can afford a loss, the more conservative you should be in your choice of investments.

5. Don't Be Greedy
Don't expect your broker to recommend stocks that will double in value within a few months. If you do have a stock that goes up considerably -- i.e. 50% or more -- sell.

6. Invest For The Long-Term
Company stock prices will fluctuate, sometimes unfavorably, in the short-term. Invest for the long-term, but keep your current financial needs in mind. You never know when you might need some of that money.

7. Avoid Acting On Impulse
An impulse buy, whether at the mall or on the stock market, is still an impulse buy. Stick to your plan. Don't buy a stock on a hot rumor; you'll get burned 90% of the time.

8. Go For Value
Undervalued stocks will help create the most growth in your portfolio. Look for bonds of companies that are out of favor too. They should be selling at a deep discount.

9. Tax Planning Is Important
Consider income-splitting techniques. (Ask your investment advisor).

10. Get Professional Help
If you're starting out, hire the best professional help you can afford. Professional advice will likely pay for itself within a short period of time. Once you become used to the market, do the research yourself. Later on in the game, switch to an online broker.

Karachi Stock Exchange Weekly Analysis 13 May, 2012


The Karachi Stock Exchange (KSE) market has witnessed a bearish trend during the week. KSE – 100 index has reached 14,230 points by losing 387 points or 2.66 percent. According to experts, Correction on the go, yet traded value goes through roof. The turnover dropped 29.30 percent to 236.94 million shares as compared to previous week’s close of 335.16 million shares.

Interestingly, while average share volume growth on WoW basis remained flat at around 261mn shares, average traded value went through the roof to USD120mn, up 35.5% WoW, as average intraday volumes remained concentrated towards heavyweights.

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


  • Domestic political uncertainty and the deteriorating US-Pak ties amid the US Congress seeking new restrictions on aid to Pakistan kept investor activity under check
  • Signing of Demutualization Bill by the President
  • Proposed bill in the US Congress committee linking Pakistan’s military & economic support to NATO supplies depressed market sentiment further
  • Foreign buying was limited to US$ 3.3 million
  • Investors are cautious seriously concerned about the developments on upcoming budget
  • Budgetary proposals related to 15% increase in tax on bank's investment in government securities and removing the cap on gas infrastructure and development surcharge resulted in negative sentiments in the market
  • Situation in power sector stood quite depress with IPPs giving final notices to government for invoking sovereign guarantees
  • As public sentiment boiled over power outages, government finally released Rs23bn to power sector, whereas proposed TFC of Rs82bn has also been finalized to be floated next week in order to raise funds to limit circular debt
  • Remittances rise to US$ 1.14bn during Apr-12, 10.7% YoY
  • Cement sector local dispatches up 9.5% YoY in Apr-12
  • For fertilizers, a voluntary Rs145 per 50 KG bag (to Rs. 1650) cut in urea prices was seen as the viable step needed to clear record high inventories and remain competitive with lower - priced imported urea. More urea imports are expected as Pak-Iran barter trade deal has been resumed
  • The key fertilizer stocks like FFC, FFBL, ENGRO and FATIMA recorded price performance of -5.6%, -2.9%, 3.4% and -1.5% respectively, during the week
  • GDP growth for FY12 at 3.67%
  • In order to tackle the circular debt issue, the government decided to raise Rs 70 billion from the reserves of Oil and Gas Development Company (OGDC) by issuing TFCs. During the week, the two key stakeholders of this issue, OGDC and Pakistan State Oil (PSO) witnessed mixed sentiment. OGDC underperformed the market by 1.9 percent, while PSO outperformed the by 5.7 percent.


Ibrahim Fibers, Colgate Palmolive, Unilever Pak Foods, Rafhan Maiz, Media Times Limited, Adamjee Insurance, PTCL, EFOODs, Lotte Pakistan PTA, ENGRO, PSO, ICI, HUBCO, Attock Refinery, DGKC, and Nishat (Chunian) Limited were the major gainers while K.E.S.C, TRG Pakistan, Pak Suzuki, United Bank Ltd, and Abbot Laboratories were major losers at KSE last week.

A close scrutiny revealed that market heavyweights including ENGRO (31%), PSO (25%), DGKC (15%), FFC (10%), NML (9%) and PTC (8%) recorded cumulative 98% contribution to overall market traded value this week while OGDC, PPL and EFOODS saw declines affecting a portion of market value.

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

According to experts and analysts, the top picks for next week are PTC, FFBL, DGKC, FATIMA, PPL, PSO, OGDC, POL, NCPL and HUBCO. Our liking also extends to FFC, Lucky, DGKC and PTC where robust business models and strong fundamentals make these names a worthwhile play, while MCB continues to remain our preferred play in the banking space.

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

Written by: Rana Khurram

Karachi Stock Exchange Weekly Analysis 6 May, 2012



The Karachi Stock Exchange (KSE) market has witnessed a bullish movement during the week. KSE – 100 index has reached 14,612.28 points by gaining 570 points or 4.1 percent. Please note that it is the highest level achieved since May 5, 2008. Volumes also showed marginal improvement with Friday alone volumes reached to Rs 10 billion, which is a 15-month high. From a broader perspective, our end-Dec’12 Index target has been upped to 16,000 points.

The weekly turnover appreciated by 70.86 percent and traded 335.16 million shares as against the previous week’s 196.15 million shares.

According to Pakistan Bureau of Statistics (PBS), consumer price index (CPI) clocked in at 11.3 percent for April 2012 as against 10.84 percent last month. The cumulative CPI figure for July-April stood at 10.84 percent. Hence full year inflation is expected to remain below the budgetary target of 12 percent. Moreover, the country’s foreign exchange reserves rose to $16.43 billion in the week ending on April 27, from $16.42 billion of the previous week. Furthermore, the rupee continued to slide against the US dollar and dropped to an all-time low of Rs91.07 per dollar.

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


  • Aggressive Foreign buying has moved KSE index to positive direction. They bought shares worth $33 million, while the KSE also outperformed the regional markets by 3.0 percent
  • There are expectations of favourable federal budget announcement for the corporate sector and improvement in Pak-US relations
  • Cotton arrivals as of April 30, 2012, stood at a record of 14.8 million bales, up 26 percent on yearly basis
  • Opposition parties are launching protest across the country, demanding resignation of Prime minister
  • The Ministry of Petroleum and Natural Resources opposed a proposal for divestment of shares of Pakistan Petroleum Limited (PPL) at a discounted price, citing PPL as a healthy and profitable commercial enterprise
  • POL prices kept unchanged, LDO rates lowered
  • MOI (Ministry of Industries) rejects the proposal to buy urea from local producers
  • Reduction of 50% in ST on raw material imports proposed
  • Government fetched Rs155bn through T-bills, yields unchanged
  • NEPRA notifies Rs6.4/unit power tariff hike under fuel adjustment


Engro Foods, Pakistan Telecommunication Company Ltd (PTCL) and Dera Ghazi Khan Cement (DGKC) were among the outperformers this week. The fertiliser sector also performed well, with Fatima Fertilizer and Engro Corporation climbing by 12.4% and 7.5% respectively.

Media Times Limited, PTCL, Ibrahim Fibers, Al‐Ghazi Tractors and IGI Insurance were the major gainers while Javedan Corporation, Grays of Cambridge, Tandlianwala Sugar, Nishat Chun Power and Pak Cables were major losers last week.

The top-5 scrips at the futures counter holding 61% of the total open interest were ENGRO, DGKC, NBP, LUCK and ATRL.

Experts and analysts are recommending 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, FFBL, PSMC, ICI, Lucky, DGKC and PTC where robust business models and strong fundamentals make these names a worthwhile play, while MCB continues to remain our preferred play in the banking space.

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