Karachi Stock Exchange Weekly Analysis 26 April, 2014

The Karachi Stock Exchange (KSE) market remained range bound during the week, bearish momentum sustains despite positive news flow. KSE - 100 index closed at 28,850 by losing -220 points or -0.8 percent.

We expect next week’s results announcements, with results of index heavy stocks primarily OGDC, PSO, ENGRO, HUBCO, BAFL, BAHL and FFC due next week, to guide index momentum while investors should also be watchful of Apr-14 inflation figure which is likely to be announced next week. Volumes were very thin, with ADTO down 43% WoW to 209mn shares whereas daily value traded was down 31% WoW to US$101mn.
 
Following news have played vital role in Karachi Stock Market index movement:

  • Bearish momentum sustains despite positive news flow  
  • KSE-100 index remained volatile during the week and lost 0.8% WoW as investors preferred to book gains despite positive news flow with regarding privatization and completion of 3G/4G spectrum auction
  • Rest of the banking stocks did post healthy results while ABL outpaced the rest of its peers
  • The results of cement stocks were fairly mixed where DGKC posted lower earnings, LUCK outpaced its peers with exceptionally good earnings and CHCC also impressed the investors
  • NML declared its financial result which was far below expectations, largely on account of PKR appreciation along with industry dynamics
  • OGDCL, PPL and UBL; three consortia appointed as FAs
  • The negativity primarily emanated from ENGRO and PSO which lost 6.5% and 4.2% respectively and cumulatively dragged the index down by 105pts
  • PKR20bn paid to PSO by government for international payments
  • Trading activity took a breather declining by 45% WoW, averaging 142mn during the week
  • Foreigners continued to remain buyers during the week and bought stocks worth USD18.6mn, against USD7.5mn in the previous week
  • Long-delayed 3G, 4G auction; amount fetched below Dar's prediction
  • PIBs auction fetches PKR425bn
  • SBP's reserves up by USD2bn in a week 
  • Electricity prices are expected to be reduced by more than PRs1/unit retrospective from Mar‐14 due to rupee appreciation against the dollar 
  • MCB Bank will set up a wholly owned Islamic banking subsidiary while dropping plans to take a stake in Islamic lender Burj Bank, according to a filing with the KSE 
  • SBP is likely to declare the monetary policy decision where we can expect SBP can cut the rate by 50bps to 9.5%
  • PSMC introduced 1000 cc Suzuki Wagon R in Pakistan. MD Pak Suzuki that Suzuki Wagon R is recognized as a star product in Suzuki line up and has been highly successful throughout the world 


Top ten gainers of last week were: Kohinoor Energy, Packages Limited, Abbott Lab, Arif Habib Corp, Bata (Pak) Ltd., Jubilee Gen Ins, Kohat Cement, Attock Cement Ltd, Ghani Glass and GlaxoSmithKline Pak.

Top ten losers of last week were: Jah.Sidd. Co., Askari Bank Ltd., Pak.Int.Con, NIB Bank, Azgard Nine, Muree Brewery Co Ltd, Mari Petroleum, Pace (Pak) Ltd., P.T.C.L.A and Shell Pakistan.

Top ten volume leaders were: MLCF, LPCL, JSCL, BOP, FCCL, KEL, NBP, PTC, NIB, FABL, and PSO.

Thank you very much for reading this article.

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 19 April, 2014

The Karachi Stock Exchange (KSE) witnessed mixed trend, bulls hit the brake late in the week. KSE - 100 index closed at 29,069.93 (after hitting an all-time high of 29,672 on Thursday) points by losing -179.52 points or -0.61 percent. While KSE – 30 index closed at 20,297.49 by losing -236.2 points or -1.15 percent.

Trading activity remained buoyant increasing 14% WoW, averaging at 259mn during the week. After gaining 7.9% in the preceding two weeks, KSE’s exuberance was challenged as the benchmark index lost 0.6% in a week marked by heightened volatility. Foreign flows continued to remain positive mopping up USD7.5mn worth of shares, though shy of the mammoth USD34.8mn net buy in the previous week. We expect the upcoming results in the next week to guide the index momentum with major results due including that of: MCB, PPL, DGKC and Lucky. According to analysts, financial results and foreign portfolio investment will set the direction of the market next week.
 
Following news have played vital role in Karachi Stock Market index movement:

  • Banks were moving on a fast lane along with cement stocks while oil stocks slipped a bit
  • The Pakistan Taliban announced that ceasefire will not be extended
  • The negativity primarily emanated from the Oil sector with OGDC, POL, PPL and PSO losing 3.62%, 3.95%, 1.79% and 5.26% respectively. Cumulatively contributing -257 points to the index
  • USD4.5bn WB loan for Dasu power project likely
  • Procurement of locomotive: IDB to invest USD264mn
  • Moody’s hints at improved outlook
  • The bids of four mobile operators qualified for the auction of 3G and 4G licenses (Mobilink, Telenor, Ufone and China Mobile)
  • Current account deficit over USD2.1bn, data reveals 
  • Major results due in upcoming week including that of: MCB, PPL, DGKC, ABL, BAFL, MEBL and Lucky
  • ECC in its meeting chaired by Ishaq Dar decided to withdraw SRO15(1)/2010 that exempted cotton yarn import from customs duty of 5%
  • Mar-14 Current account deficit clocked in at US$156mn vs. a surplus of US$167mn in Feb-14
  • Daily value traded fell by 10% WoW to US$146mn. Net FIPI during the week was US$7.5mn
  • Attock Cement has signed a JV agreement to set up a 3000tpd or 0.9mtpa cement grinding unit in Basra, Iraq
  • Global rating agency Moody’s has hinted that if Pakistan continued to improve economic performance, the country’s credit rating could be improved 
  • PPL, one of the leading oil/gas E&P companies, is committed to adding up to 3.23 TCF gas within next three years
  • Another thing to watch out for is the relationship between the military and the government, which has been strained recently
  • Average daily turnover increased by 18 percent on week-on-week basis to 368 million shares against 332 million shares. Daily value traded remained lacklustre, down by 36 percent on week-on-week basis to $86 million
  • The week saw foreign portfolio investment inflows of $7.5 million as compared to $34.8 million last week. The start of the Easter holidays also meant that foreign buying ($7.5 million for the week) was at a minimum and could not provide support to the index
  • The current account deficit clocked in at $156 million in March and $2 billion Eurobond proceeds were credited to the State Bank of Pakistan (SBP) 
  • The earnings season kicked off in full gear this week with several industry heavyweights announcing their results for the period ended March 31. The results were by and large in-line (Attock Group Companies) or above (Engro Foods, KAPCO) market expectations and had a positive impact on the market


Top ten gainers of last week were: Mari Petroleum, Pak Services, Pak.Int.Cont, NIB Bank, Allied Bank, Askari Bank Ltd., TRG Pakistan Ltd, Shell Pakistan, K‐Electric and United Bank.

Top ten losers of last week were: National Refinery, Jubilee Gen Ins, Javedan Corporation, Thal Limited, Soneri Bank, Muree Brewery Co Ltd, Pak Tobacco Co, Shifa International Hospitals, P.S.O. and Engro Foods Ltd

Top ten volume leaders were: KEL, JSCL, NIB, LPCL, FABL, BOP, MLCF, NBP, PACE, TRG, and BAFL.

Thank you very much for reading this article.

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 12 April, 2014

The Karachi Stock Exchange (KSE) market activity was bullish, Bulls assume control. KSE - 100 index closed at 29,249 points by gaining 842 points or 3.0 percent. Activity remained robust during the week with ADTO rise to 332mn shares, up 7% WoW; whereas US$ value traded increased by 18% WoW to US$134mn.

Trading activity maintained a dynamic trend followed by an already strong week and posted a 8.8% WoW increase in average volumes to 227mn shares. Foreign interest is primarily keeping the benchmark index buoyant whereby net foreign buying clocked in at USD34.8mn during the week. We expect market would likely be guided by result announcements while investors would also be watchful of foreign flows.

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

  • Optimism over euro bond issues along with PKR appreciation and anticipation over monetary easing drove benchmark index to grow by 3.0% WoW to 29,249pts
  • ENGRO, MCB, OGDC, PSO and PSEL were the primary index movers and increased by 11.0%, 3.8%, 2.7%, 6.8% and 27.6% respectively
  • Pakistan sells USD2bn bonds in world market
  • State Bank hints at lowering discount rate
  • According to Government, there will be no further delay in 3G/4G auction, expecting USD3bn inflow
  • Pakistan total cement sales were down 4.1% YoY in March‐2014 where domestic sales were down 3.7% and exports were down 5.6% YoY
  • Finance Minister Ishaq Dar has said the World Bank will provide US$10bn to Pakistan for development projects over the next five years
  • PKR with yet again rallied against the dollar after massive interest in the EURO bond and hit a lower level of PKR96.20/USD
  • GoP is expecting Rs140bn from the divestment of its shares in OGDCL, PPL and UBL by June’14. GoP has planned to offload 10% of its shares in OGDCL through GDRs and IPO, which is likely to bring PKR80 to 90bn
  • Best performers included banks on (expected Pakistan Investment Bond (PIB) yield gains) as well as beneficiaries of a strong Pakistani rupee such as the auto and pharma sectors
  • Remittances in the nine months of FY14 were reported at $11.6 billion, a growth of 11.9 percent on year-on-year basis over the same period last fiscal year
  • During the week, the ECC rejected the demand of the Power Ministry to divert 60mmcfd of gas from Engro to Guddu Power, earlier, Fatima Fertilizer had announced to invest up to $300 million in Midwest Fertilizer Corp (US), as an equity contribution by Fatima over a period of four years (2014-18)
  • Lafarge Group, which owns the parent company of Lafarge Pakistan, announced a merger with Holcim Group to create the largest cement player in the world

Top ten gainers of last week were: Pak Services, EFU General Ins, Shell Pakistan, Soneri Bank, Lafarge Pakistan, Agriautos Industries, Indus Motor, Tri‐Pack Films Limited, Pak Tobacco Co.XD and Pace (Pak) Ltd.

Top ten losers of last week were: Javedan Corporation, Kohinoor Textile, Muree Brewery Co Ltd, Cherat Cement, International Steels Ltd, Nestle Pakistan, TRG Pakistan Ltd, TPL Trakker Ltd, Fauji Fert BinXD and Kohat Cement

Top ten volume leaders were: LPCL, JSCL, BOP, PACE, FABL, FCCL, MLCF, NBP, ENGRO, TRG, and NIB.

Thank you very much for reading this article.

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 5 April, 2014

The Karachi Stock Exchange (KSE) market activity was bullish, MSCI changes guide index to all-time high. KSE - 100 index closed at 28,408.03 points by gaining 1291.90 points or 4.76 percent. While KSE – 30 index closed at 20,030.28 by gaining 829.74 points or 4.32 percent.

After two consecutive weeks of decline, trading activity posted strong recovery with daily volumes averaging at a staggering 209mn shares, ↑ 89% WoW. Foreigners were the major buyers with net buying of USD35.8mn during the week, the highest foreign net inflow FYTD. For the upcoming week, Musharraf’s trial would be closely watched, although the direct impact on the market is likely to remain limited in case of either outcome.

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


  • The key reasons behind the markets rebound was foreign buying interest on the back of the upcoming re-composition of MSCI FM 100 Index where Pakistan's weight is more than likely to go up to 8.9% with inclusion of 3 more stocks (PSO, LUCK and BAHL), taking total stocks from Pakistan to twelve
  • News flow of increased weight for Pakistan in the MSCI Frontier Markets (FM) Index allowed optimism to dominate at the local bourse with the KSE-100 index gaining a massive 4.8% during the week, its highest WoW gain since Jul-13
  • Continuation of peace talks with TTP
  • Index heavyweights OGDC and MCB contributed most of the gains with both stocks cumulatively adding 308pts to the index. LUCK also remained one of the major index drivers over news flow of the stock being added to the MSCI FM Index
  • Forex reserves at USD10.072bn on March 31
  • CPI-based inflation up 0.96pc in March
  • Government granted two waivers by IMF
  • WB to provide USD10.2bn to Pakistan in next five years
  • Unprecedented buying in PSO from a newly established fund for the country provided another surprise to investors
  • IMF warned that inflation is likely to rebound in coming months in Pakistan
  • IMF has advised SBP to tightening its monetary policy, as the current decline in inflation rate could be a temporary phase
  • MoF it showed KP government’s overall revenues after spending stood at Rs 32.8bn in the 1HFY14 as against Rs 11. bn in the corresponding period of previous financial year
  • Government of Pakistan would hold roadshows in 6‐major international cities to invite/attract potential investors for making investment in government papers to mobilise $500mn
  • LUCK started production in Iraq from February this year through its joint venture grinding plant
  • DGKC is expected to begin the construction of its new production plant at Hub
  • Cement sales in the country including export and local dispatches during 9MFY14 rose marginally by 0.7% to 24.705mn tonnes as compared to 24.542mn tonnes in same period last fiscal year
  • SAS a fully held subsidiary of Lafarge SA is evaluating a potential divestment of its shares in LPCL
  • OGDCL announced a gas discovery from Maru East Well‐1, which is located in Ghotki, Sindh
  • SBP In its quarterly report released on 28th Mar, SBP has expressed apprehension about achieving the growth target for FY14 due to a decline in cotton production. GDP growth is likely to remain in the range of 3.5% to 4.5%


Top ten gainers of last week were: EFU General Ins, Pak Tobacco Co.XD, IGI Insurance, Lafarge Pakistan, Ghani Glass, Indus Motor, Lucky Cement, Thal Limited, Packages Limited and Shell Pakistan.

Top ten losers of last week were: Rafhan Maize Prod., Avedan Corporation, International Steels Ltd, Nestle Pakistan, Century Paper, Muree Brewery Co Ltd, Kohinoor Textile, Cherat Cement, Pak.Int.Con.XDXB and Askari Bank Ltd.

Top ten volume leaders were: LPCL, FABL, LOTCHEM, NIB, FFBL, MLCF, KEL, FML, UBL, and JVDC.

Thank you very much for reading this article.

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