Karachi Stock Exchange Weekly Analysis 27 July, 2014

The Karachi Stock Exchange (KSE) market Volumes surge amid start of results season. rose by 249.86 points or 0.8 percent to close all time historical high of 30,474.75 points during the past week as compared to 30,224.89 points of previous week’s closing. The KSE-100 index gained 32 percent Week on week (WoW) higher average trading volumes of 173 million shares.

Volumes were robust, with ADTO picking up by impressive 32% WoW to 173mn shares. Similarly, average daily value traded rose by 21% WoW to US$91mn. Foreigners continued to support the market, with FIPI rising by 4% WoW to US$25.1mn in a small 4-trading-days week. The market will continue pricing in strong anticipated banking results, in addition to high payouts from energy stocks. On the flip side, cements may remain under pressure on the recent development. Trading activity in the Karachi capital market is likely to remain lackluster next week due to the Eid holidays, as only two days of trading will be observed in next week.

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


  • In the recent bi‐monthly monetary policy review, the State Bank of Pakistan (SBP), as largely expected, decided to leave discount rate unchanged at 10%. This is the fourth consecutive status quo decision made by the central bank 
  • The build‐up on the political front holds the key as it is widely expected that this saga will gather pace after Eid holidays. Unfolding of new political alliances and pressure tactics can unsettle the sitting government, which can be very unnerving for investors spoiling the jubilant mood at the bourse 
  • Imran Khan’s proposed long march on 14 August will be a key trigger for the market
  • The government may not change the petroleum products prices in the Aug‐14, which as per international trends are expected to increase in the range of PRs1.4/l to PRs4.5/l
  • Pakistan’s Fatima Group Principals and US‐based Midwest Fertilizer Corporation have signed a memorandum of understanding with an Italian petrochemical contractor Maire Tecnimont to undertake Engineering, Procurement and Construction (EPC) study for a US$1.6bn nitrogen fertilizer complex in the US. The work is expected to be completed in 2018 
  • Banking results started coming in during the week ‐ very strong earnings posted by Askari Bank (up 12.7% WoW) and HBL (‐0.8% WoW) indicate vigorous outlook on upcoming sector‐wide profitability expectations 
  • Bestway Cement has acquired Lafarge Cement at an EV of US$329, which translates into an acquisition price of PRs19.7/sh
  • IMF’s fourth review discussion will commence on August 6, which will be keenly tracked
  • The result of the Fauji twins didn’t offer much excitement in spite of FFBL’s higher than expected dividend
  • AKBL surged sharply during the week (↑13% W/W) driven by a startling turnaround in its operations and an unexpected dividend
  • HCAR feasted on another round of price appreciation (↑5% W/W) showing a staggering increase in its profits, led by stout margins in the wake of currency gains
  • Delay in CHCC’s expansion plans has already pushed the script deep into greener meadows as the stock has advanced by 37% during the last two weeks
  • Announcement of the telecom policy in the near term will provide clarity to the sector. The upcoming telecom policy has envisaged that PTA and CCP will prepare a joint MoU to clarify their respective roles in the sector. The sector will increasingly be managed through the application of a Competition Framework. PTA, working with the CCoP, will develop a Competition Framework for the telecommunications sector
  • The energy space may lack the spice from an earnings point of view, but strong payout expectations should keep investors interested
  • Foreigners have been very active in the market lately, with inflows of USD57.5mn MTD (USD14.46mn in the outgoing week). The major portion of foreign buying has been concentrated in the Oil and Gas sector driven by attractive valuation levels
  • ADB is likely to finance a Punjab government’s project to improve the quality of life of residents in the selected intermediate cities of the province 
  • Bestway Group has acquired the Co‐op pharmacy business for USD620 mn
  • PC has decided to appoint a consortium, led by Dubai Islamic Bank, as financial advisers for the privatization of PIA. Another consortium, led by E&Y and UBL has been appointed as financial advisers for Fesco
  • Stability in textile exports due to GSP plus status from European Union narrowed the country’s trade balance in the FY14 by 2.48% to USD19.98bn as compared to USD20.49bn in same period last FY13 
  • MoF, GoP has released the sum of PKR2.85bn to PSM. The amount is the third installment of the first tranche of the approved restructuring package of PKR18.5bn from the GoP 
  • Pakistan has assured IMF for bringing down the inflation rate within a range to 6‐7% by FY16 from the current level of 8.8%,. The commitment was made with the IMF when Pakistan entered into an EFF programmed for SDR USD5.393bn in even quarterly installments over a period of 3‐years subject to successful quarterly reviews 
  • NEPRA cut consumer tariff by 8 paisa/unit for Wapda''s Discos for a month, in a bid to pass on lower average power generation cost for June 2014. Nepra held a public hearing in response to a petition filed by the CPPA


Top ten gainers of last week were: EFU General Ins, EFU Life Assur Ltd., Askari Bank Ltd., Cherat Cement, ICI Pakistan, Attock Cement Ltd, Hum Network Ltd, Bata (Pak) Ltd., Lotte Chemical Pakistan and Abbott Lab

Top ten losers of last week were: Agritech, Pakistan Cables, Shezan International Ltd., K‐Electric, Kohat Cement, Sui South Gas, Pak Services, D.G.K.Cement, TRG Pakistan Ltd and Century Paper.

Top ten volume leaders were: LPCL, MLCF, FCCL, AKBL, BOP, DGKC, AICL, LOTCHEM, CHCC, ENGRO and NBP.

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 20 July, 2014

The Karachi Stock Exchange (KSE) market index was bullish and KSE‐100 index breached the psychological level of 30,000. The KSE-100 index rose by 907 points, or 3.1 percent, on week-on-week basis to close at 30,225 points against 29,318 points last week.

Volumes surged by 120%WoW led by Moody’s upgrade and start of result season, with ADTO clocking in at 131mn shares. Average daily value traded rose by a staggering 175.4%WoW to US$75.4mn. FIPI rose by a massive 192%WoW to US$24.2mn.

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


  • State Bank of Pakistan has announced monetary policy and keep the keep the policy  rate unchanged at 10.0 percent
  • The week started off on a great note after news that Moody’s had upgraded the country’s economic outlook from Negative to Stable
  • Activity was witnessed in the Banking and Oil and Gas sectors throughout the week, with both sectors providing the bulk of the KSE-100’s gains
  • The week saw foreign portfolio investment net inflows up by 192 percent to $24.2 million against $8.2 million last week
  • Index heavy OGDC contributed +125 points to the index as government finalized its shares off-load transaction timeline (Oct-14) while financials also gained +3.6% over Moody’s rating upgrade of five banks
  • DAP have plunged 52,000tons in Jun‐14, due to lack of clarity from the government regarding the price mechanism for providing the PRs14bn subsidy to farmers announced by Finance Minister Ishaq Dar in the budget 2014‐2015 
  • The Ministry of Finance has asked the central bank to waive its ‘per party limit’ on Pakistan State Oil (PSO) in an interim arrangement, which will enable the company to borrow more from banks and keep supplying fuel to power plants in required quantity, sources say 
  • Lucky Cement setting up a 660MW coal‐based power plant
  • Investors have had an eventful week triggered by Moody’s foreign exchange reserves rating for Pakistan revised up to stable
  • The ongoing corporate result season kicked‐off with a surprise dividend announced by PTC, however it failed to excite investors due to ongoing ICH issues
  • Investors may not want to ignore the political muddle in the country where 14th Aug event by the PTI may possibly keep investors watchful
  • INDU has invested about USD100mn in Pakistan to introduce a new model Corolla Altis Grande
  • Leaders of the BRICS group of emerging powers created a Shanghai‐based development bank and a reserve fund seen as counterweights to Western‐led financial institutions. The development bank will have initial capital of USD50bn that could rise to USD100bn, funded equally by each nation 
  • Exim Bank of China has agreed to offer a loan of USD300mn for completing the most critical Neelum Jhelum hydropower project, having a capacity of 969MW, by 2016. Wapda Chairman Wapda still required USD475mn to complete the project by 2016 
  • HASCOL has acquired 11.4% shareholding in PRL
  • MoSP the process for privatization of the PIA will be formally initiated after the appointment of a financial adviser on July 22


Top ten gainers of last week were: Cherat Cement, Thal Limited, ICI Pakistan, Kohat Cement, Bank AL‐Habib, Attock Cement Ltd, Fauji Cement Company, United Bank, Muree Brewery Co Ltd and Askari Bank Ltd.

Top ten losers of last week were: EFU General Ins, Shezan International Ltd., Pak Services, Allied Rental Mod, Grays Of Combridge, Pak Tobacco Co, NIB Bank, K‐Electric, TPL Trakker Ltd and Agritech

Top ten volume leaders were: LPCL, FCCL, KEL, MLCF, DGKC, JSCL, NBP, UBL, BOP, AICL and SSGC.

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 13 July, 2014

The Karachi Stock Exchange (KSE) market charts stayed as dry as a bone this week where activity from the trading desks evaporated in thin air. Investors blamed the cliché Ramadan effect for dreary activity on the bourse while culprits also include political chaos in the country and pressure built by mixed MPS expectations for Jul’14. The KSE-100 index closed at 29,318, down 1% WoW. The KSE-100 index lost 302 points, or one percent, on week-on-week basis to 29,318 points against 29,620 points last week. Volumes fell drastically by 43.9% WoW as Ramadan commenced, with ADTO clocking in at 59.6mn shares.

Traded daily average value during the week went as low as PKR2.7bn as against CYTD daily average of PKR9.1bn. On the other hand the daily average volume for the week reflected an even worse performance as it dialed to 60mn shares, in contrary to CYTD daily average clocking in at 226mn shares. Foreign investors seemed to remain muted by aforementioned factors as foreign inflow for the last four days totaled to a moderate USD7.07mn, where major buying was witnessed in the Chemicals sector.

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


  • First monetary policy statement of FY15 will be announced on July 19, which will be the key driver for the market momentum
  • MPS announcement in the upcoming week and clarity on the political front should be events to watch for
  • The upcoming MPS is likely to see a status‐quo; however resurging inflation has increased chatter of a 50bps DR increase
  • The week kicked off on a positive note, with cement sales for June showing an impressive increase of 14.3 percent as compared to June 2013
  • Volume leaders for the week were LPCL (24mn shares), FCCL (19mn shares) and LOTPTA (16mn shares), that contributed 29% to the bourse’s total volumes
  • The opposition party, PTI, set to march against the ruling party, PML‐N, on electoral reforms and PAT workers carrying out sit‐ins/protests against the GoP anytime soon. These due events have been creating dark clouds over the political environment
  • IMF report on Pakistan’s Economy highlighted the revised country’s FY15 fiscal deficit target along with rationalizing power tariffs to overcome deficit
  • IMF also hinted on further devaluation of PKR against the greenback; however GoP expressed their views on keeping the exchange rate stable
  • Corporate result season beginning in the coming days, We expect exciting results in the banking sector while record cement dispatches, lower coal prices and stable PKR in 4QFY14 is also expected to bring positive surprises for investors from the cement companies
  • The exports and domestic sales of cement increased in June 2014 compared to the corresponding month last year. The despatches to domestic markets increased by 14.32% to 2.53mn tonnes against 2.22mn tonnes during same month last year. Similarly, exports in June 2014 increased by 2.9% to 685,000 tonnes against 665,000 tonnes of June 2013
  • IMF has approved modifications in the targets on international reserves and budget deficit for the end of June by allowing Islamabad to utilise Eurobond worth USD2bn instead of Fund’s earlier projection of USD500mn on this account
  • Government of Pakistan has given written assurance to the IMF that another surcharge will be imposed to recover PKR240bn STCF from consumers if NEPRA does not include it in tariff determination
  • WB approved SAGP in an amount of USD76.4mn, aiming to improve the productivity and market access of small and medium producers in important commodity value chains. The project would benefit approximately 112,000 farmers covering over 66,000 hectares of land 
  • Government of Pakistan is likely to increase power tariff by PKR1.30/unit for domestic consumers, using 200‐300 units and PKR2.50/unit for agriculture tube‐wells, well‐informed FM. IMF, the authorities continued with their plans to bring electricity tariffs to the cost recovery level
  • Nishat signs LoI for another 660MW coal‐based power project in Jhang
  • Mobile phone subscriptions spike up to 140 million
  • At the request of the Petroleum Ministry, ECC lifted a ban on the import of CNG kits and cylinders for factory-fitted vehicles 
  • IMF has put in place six new structural benchmarks (including two modifications) to monitor Pakistan’s macroeconomic performance for disbursement of next tranche. On its part, the govt committed to impose a new surcharge on electricity consumers to recover PRs240bn, in addition to about PRs150bn further reduction in power sector subsidies during FY15 and a 4% increase in tariff 
  • According to data released by the SBP on Thursday, overseas Pakistani workers remitted US$15.8bn in FY14, which translates into an increase of 13.7% over the remittances of US$13.9bn received in FY13 
  • PSO's receivables have risen to PRs181.5bn which may soon touch peak levels seen in 2012
  • Finance Minister Ishaq Dar reportedly rejecting the gas price restructuring plan for Mari Petroleum, causing the stock to close five percent down


Top ten gainers of last week were: Pak Services, Shezan International Ltd., Arif Habib Corp, Fatima Fert.Co., Century Paper, Engro Corp, Lotte Chemical Pakistan, Engro Foods Ltd, Nishat Power Ltd and Nishat Mills Limited.

Top ten losers of last week were: Allied Bank, Jah.Sidd. Co., TPL Trakker Ltd, Packages Limited, K‐Electric, Javedan Corporation, Thal Limited, National Foods, Siemens Pak Engg. and Int. Ind.Ltd

Top ten volume leaders were: LPCL, FCCL, LOTCHEM, KEL, BOP, BAFL, NIB, PTC, SSGC, MLCF and FFC.

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 6 July, 2014

The Karachi Stock Exchange (KSE) market Volumes fell drastically by 34% WoW as Ramadan commenced, with ADTO clocking in at 106mn shares. The KSE-100 index closed at 29,620, up by increasing 276 points or 0.9% WoW.

According to analysts, next week volumes might remain at lower side. The market witnessed low volumes as expected in the first week of Ramazan, and the trend is expected to continue in the near term. Average daily value traded was down 28% WoW to US$60mn. FIPI remained strong, rising 20% WoW to US$18.56mn. Monetary policy review due mid of this month will be keenly watched, though analysts expect no change in discount rate this time around. Also any noises on the political front could prove to be essential catalysts for the market direction looking ahead.

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

  • Power sector receivables hit PRs520bn mark Power sector receivables have touched PRs520.18bn mark during 11MFY14 against PRs411bn as on June 30 2013, indicating a 26.5% increase in receivables. Power sector has also failed to collect bills from the private sector, which has reached alarming level of PRs352.09bn from only PRs281.5bn as on June 30 2013 
  • The government has finalized new rates of GIDC for different sectors of the economy to be applicable from today. The government has increased GIDC on industrial sector from PRs100/mmbtu to PRs150/mmbtu and on fertilizer sector from PRs197/mmbtu to PRs300/mmbtu, including the new urea plants of Fatima and Engro Fertilizer which were earlier exempted from the levy 
  • PBS announced June CPI at 8.2%, lower than our expectation of 8.6% and last month's 8.3%
  • Government approves 4,250MW coal based power projects
  • Pakistan’s liquid foreign reserves fell by US$273mn, from US$14.26bn on June 20, 2014 to US$13.99bn on 27 Jun 2014. This decrease was mainly due to debt servicing 
  • Monetary Policy review due mid of this month will be keenly watched, though we expect no change in discount rate this time around
  • Any noises on the political front could prove to be essential catalysts for the market direction looking ahead
  • The market will also start pricing in strong anticipated banking and cement sector results, in addition to high payouts from energy stocks
  • Despite dull market sentiment number of stocks including HUBC, AICL, INDU and SNGP posted better returns
  • Gas tariff revision pushed SNGP while settlement of tax related to HUBC also its role in pushing the stock upwards
  • PTCL was the top volume leader for the week where issues related ICH was settled
  • IMF disbursed USD555.9mn to Pakistan, confirming the country was on track with the conditions of its IMF loan program
  • NEPRA has revised down the upfront tariff for coal power projects, as the existing tariff has failed to attract private sector investment in coal‐based power generation in the country as was expected 
  • EFERT will be issuing 20.541mn shares to the IFC, a member of the WB Group, totaling PKR493mn (USD5mn) as the IFC has exercised its option to convert part of its convertible loan amount into the shares of the company 
  • PSO had reduced furnace oil supply to 18000‐19000 tons against the demand of 22,000 tons which hit power generation. GoP had allocated PKR293bn tariff differential subsidy for PEPCO and KEL in the FB‐14 of which 251bn (PKR232+19) bn was released till June 29, 2014
  • OGRA issued a notification to increase CNG price by PKR5.36/kg in region‐II and PKR2.10/kg in region‐I
  • The OGDC is next in line to be privatised by the government and investors now anticipate that its strike price will also be set at a premium to the market price
  • The Hub Power Company was the biggest gainer after it announced that the Federal Bureau of Revenue will refund Rs1.6 billion to the company after a Supreme Court decision on a withholding tax dispute went in the company’s favour. The company’s share price jumped 6.6% during the week and contributed 65 points to the KSE-100’s gains
  • There was bad news for Engro Fertilizers and Fatima Fertilizers after the government imposed Rs300 per Million British Thermal Unit Gas Infrastructure Development Cess on all fertilizer plants


Top ten gainers of last week were: Shezan International Ltd., Thal Limited, Packages Limited, Hub Power, Adamjee Ins, Indus Motor, Sui North Gas Pipe., Nishat Power Ltd, Allied Rental Mod and Archroma Pakistan

Top ten losers of last week were: Pak Tobacco Co, Javedan Corporation, Grays Of Combridge, Engro Corp, Pace (Pak) Ltd., Fatima Fert.Co., EFU Life Assur Ltd., Pak.Int.Con., Colgate Palmolive and Rafhan Maize Prod.

Top ten volume leaders were: PTC, SSGC, LPCL, BOP, AHCL, FCCL, SNGP, ENGRO, FFC, KEL and PPL.

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