Karachi Stock Exchange Weekly Analysis 25 October, 2014

The Karachi Stock Exchange (KSE) market remained almost unchanged closing at 30,098 amid relatively low volumes this week. Average daily volume and value traded rose 24% and 18% WoW, respectively to 165mn shares and US$93mn/day. FIPI outflow picked up pace and clocked in at US$15.2mn vs US$8.9mn last week. KSE – 100 index closed at 30,098 by increasing 215 points or 0.7 percent.

KSE-100 index remained range bound during the week managing to gain 215 points (↑0.7%) against a decline of 275 points (↓1%) in the previous week. Average daily trading volumes remained subdued during the week, decreasing by 9% WoW to 93mn shares. Foreigner remained net sellers during the week as well, selling net USD15.2mn worth of shares (↑68% WoW). According to analysts's expectations trading volume to pick up next week as major companies (IPPS, Textiles, and Cements) are slated to announce their quarterly financial result, while investors will also keep a watchful eye on foreign flows. One analyst at KASB Securities said the triggers, such as results, political issues and oil prices, which affected the market last week, will continue to influence it the next week.

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

  • The showdown of political power by the incumbent ruling party of Sindh over the weekend created a political drama where young political leader of PPP targeted all the political partiers’ and provided the masses with a policy guideline
  • Soon after the event, the minority partner in the provincial government left the ruling elite alone while creating a political deadlock
  • Nestle Pakistan added 64 points to the index on the back of strong 3Q results as the company reported 80% growth in bottom line
  • MLCF traded the highest volume of 53mn owing to strong 1QFY15 earnings expectation
  • Tahir ul Qadri wraps up D-Chowk (Islamabad) sit-in. Investor jubilation was seen on October 22, 2014 where investors celebrated the end of Qadari’s Dharna as they may see a clearer sky
  • LSM posts 5.27pc growth
  • Oil import declines in July-September
  • Forex reserves to improve by December: Dar
  • First quarter: Government breaks ceiling as expenses rise Rs100b
  • Fertilizers: Floods impact volumes in Sept-14: As per statistics released by NFDC today, urea offtake in Pakistan declined by 11% YoY and 33% MoM in Sept-14. Offtake for the local industry fell by 8% YoY while that of NFML declined by 38% YoY
  • ABL: Positives priced in: We re-initiate coverage on Allied Bank Limited (ABL) with a Jun-15 PT of PKR125/sh based on justified PBV of 1.8x. The stock has outperformed KSE-100 index by 35pp since Jan-14 owing to substantial earnings growth during 9MCY14. The stock is currently trading at CY15 PBV of 1.6x and PER of 8.3x and offers an upside of a mere 3% along with a dividend yield of 5%, translating into a total return of 8%
  • Privatization commission announced the OGDC‐GDS book bidding to kickoff probably on November 5, 2014 to November 7, 2014
  • The Supreme Court’s judgment allowing transfer of shares in the secondary public offering of Oil and Gas Development Company Limited (OGDCL) also provided some cushion
  • The results announced in the outgoing week were fairly mixed where major results from cement companies were unable to impress the investors
  • MLCF posted lower profitability on account of higher taxation, LPCL posted a marginal loss for the quarter and DGKC earnings & margins were well below the anticipated levels
  • From the banking space, HBL, FABL and ABL posted better earnings whereas INDU after launch of its new and stylish version of Corolla announced its result which was lower in comparison with market anticipation
  • Falling coal prices, however, rejuvenated buying interest in cement shares ahead of result announcements
  • On the last trading day of the week, strong rumors in circulation about the enhancement of OMC margin pushed the market higher where PSO hit the upper circuit breaker followed by SHEL and APL posting major gains
  • Government of Pakistan decided to keep the electricity tariff unchanged at an average rate of PKR 11.52 unit against a PKR13.81/unit as recommended by Nepra
  • Finance Minister has promised Punjab‐based textile industry that the government would resolve their problem of tax refund and gas supply after the industry expressed inability to take advantage of the GSP Plus status
  • Textile exports recorded a 4% year-on-year decline in the first quarter of the current fiscal year
  • China will provide USD3.5bn soft loan to Pakistan for repair and maintenance of railway infrastructure from Karachi to Peshawar, Pakistan Railways
  • MD Hinopak Motors Limited on October 22 introduced Euro II vehicles at the company’s head office in Karachi which include rigid trucks, prime movers and buses, calling them ‘green range’ of commercial vehicles
  • SBP announced concessional refinance scheme of PKR10bn for the revival of economic activities and to facilitate the flow of fresh credit in the flood‐affected areas as reported by the NDMA
  • The book building exercise for the sale of 10% stake of the OGDCL would start in the first week of November soon after Muharram holidays
  • The money market witnessed the first Ijara Sukuk OMO that was held on October 23, 2014 which witnessed outright purchases of PKR6.175bn in 6M and 12M tenors. The PIB auction conducted on October 22, 2014 saw bids of PKR329bn out of which only PKR49.6bn were accepted
  • Engro Elengy Terminal Private Limited (ETPL) said on Wednesday that it will be ready to receive liquefied natural gas (LNG) consignments at Karachi’s Port Qasim by January 26, 2015. The terminal has a capacity of handling 600mmcfd LNG, while the government would import 200mmcfd in the first year of operation

Top ten gainers of last week were: Hum Network Ltd, Pak.Int.Con., Cherat Cement, J.D.W.Sugar, Meezan Bank, Searle Pak, Pioneer Cement, Nestle Pakistan, Fatima Fert.Co. and Fauji Cement Company.

Top ten losers of last week were: Mari Petroleum, Allied Rental Mod, Grays Of Combridge, TRG Pakistan Ltd, Shezan International Ltd., International Steels Ltd, Century Paper, Bata (Pak) Ltd., National Refinery and Engro Foods Ltd.

Top ten volume leaders: MLCF, KEL, BOP, FCCL, TRG, LPCL, DGKC, AKBL, EFERT, JSCL, and KTML.

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 October, 2014

The Karachi Stock Exchange (KSE) market was dancing to the tunes of declining oil prices in the international markets. KSE – 100 index closed on 29,883 by losing -276 points or -0.91%.

The index shed 275 points during the week with an Average Daily Turnover (ADT) of 216 mn shares. With lack of interest in blue chips volumes were concentrated in small‐cap and third tier stocks. Earnings excitement in the banking stocks kept the sector hot on investor’s radar, however gains were pared as profit taking settled in towards the last leg of the week. Selected names in the cement universe such as FCCL and KOHC marked healthy advances as well.

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

  • KSE-100 index followed negative trend and dropped by 275 points (-1%) during the week. International oil prices dropped by 3% during the week and thus dragged oil stocks
  • Throughout the week major E&P scrips were seen under selling pressure
  • Index heavyweight stock, OGDC had the highest impact as it dragged index by 136 points followed by other three oil names PPL, PSO and POL which cumulatively contributed 184 points to the index decrease
  • PSO posted highest loss of 7% during the week among KSE-100 stocks, followed by PTC which dropped by 7% due to weak 9MCY14 results
  • Average daily trading volumes picked up post long holidays, and increased by 48% WoW to 102mn shares
  • Foreigners turned sellers during the week, after a long gap of nine weeks, with net foreign selling clocking in at USD8.99mn during the week relative to buying of USD9.4mn in the preceding week
  • Foreign reserves improve, reach $13.4bn by Oct 3
  • Government's total debt surges by 1.6 percent to Rs16.05trn
  • Car sales in first quarter remain flat
  • Automobile stocks were in for an unabated bull‐run on account of expected approval of the new auto policy that recommends a reduction in duties on CKD kits. Anticipation of stellar earnings in the wake of a declining Yen gave further thrust to the sector
  • ENGRO (↓5.58%) was dragged downwards as the company’s food subsidiary continues to bleed resources; the stock witnessed selling by foreigners and local institutions during the week
  • The result season will be in full swing as earnings announcement of major stocks across banking; E&P’s, autos and pharmaceutical sectors are lined‐up for next week
  • The Sindh government is starting a project to produce 672MW electricity daily from 2000 tons garbage of Karachi city
  • Around 2.5 million subscribers have opted for 3G services being provided by mobile phone operators since its launch in April this year
  • Karachi‐based Jubilee General Insurance Company will seek shareholder approval to offer Islamic insurance (takaful), becoming the latest firm to enter the sector after conventional firms were allowed to offer shariah‐compliant products earlier this year 
  • FM sounded confident on simultaneous release of two IMF tranches, totaling USD1.1bn in December, after an agreement was reached with the Fund on combining the fourth and fifth reviews of the country's economic performance 
  • PPL has discovered hydrocarbon from its exploratory well in district Sanghar of Sindh, a company announcement said on Tuesday


Top ten gainers of last week were: Bata (Pak) Ltd., J.D.W.Sugar, Netsol Technologies, Grays Of Combridge, Millat Tractors, Indus Motor, Thal Limited, Service Indus, Kohat Cement and GlaxoSmithKline Pak.

Top ten losers of last week were: P.S.O., P.T.C.L.A, Hum Network Ltd, Shell Pakistan, Pak Oilfields, Engro Corp, Atlas Honda Limited, Rafhan Maize Prod., Oil and Gas Deve and Lotte Chemical Pakistan Ltd.

Top ten volume leaders: LPCL, PTC, BOP, JSCL, TRG, FCCL, EFERT, AKBL, BAFL, DGKC and KEL.

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 October, 2014

The Karachi Stock Exchange (KSE) market exhibited volatility during this week, shortened to just two trading sessions on account of Eid holidays. The index gained a meager 0.2% WoW to close at 30,159 points. Locals were key support to the market, with foreigners selling US$6.2mn in just two days, compared to healthy buying of US$9.4mn last week. ADT rose 47% WoW to US$175mn shares, whereas value traded was up by 14% WoW to US$71mn/day.

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

  • The ECC directed the Ministry of Industries and Production and Ministry of Petroleum for provision of natural gas to local fertilizer manufacturers to meet maximum demand for urea to save precious foreign exchange
  • Pakistan’s total liquid foreign reserves rose by US$190mn to US$13.4bn as on 3 October, compared to US$13.2bn a week earlier. The increase can primarily be attributed to inflow of Coalition Support Fund (CSF)
  • The stock market experienced a turbulent couple of days during the week shortened by Eid holidays as judicial decisions took centre stage
  • The market opened on a negative note following the Peshawar High Court’s decision in the previous week that blocked the sale of shares in Oil and Gas Development Company Limited (OGDCL). The much-awaited book-building process of OGDCL’s shares was expected to start on Thursday but was delayed
  • Declining global oil prices compounded problems for the oil and gas sector and led to selling in index heavyweights. OGDCL’s share price fell 2.6% while Pakistan Petroleum Limited saw a drop of 1.2% in its share price on Thursday
  • On Friday after the Supreme Court allowed the OGDCL book-building process to continue with a caveat that no share transfer would take place until a hearing at a later date. The news was well received and brought stability in the oil and gas sector
  • The Sindh High Court restrained Sui Southern Gas Company (SSGC) and the Oil and Gas Regulatory Authority (Ogra) from levying the gas infrastructure development cess, despite a presidential ordinance. The news proved to be a catalyst for the fertiliser and cement sectors, which are heavy consumers of gas
  • On the macro front, the country’s foreign exchange reserves received a boost after the United States disbursed $364 million under the Coalition Support Fund. The reserves rose $190 million to $13.4 billion, according to latest figures of the State Bank of Pakistan
  • There was some bad news for investors as well as foreigners turned net sellers and offloaded $6.2 million worth of equity in just two days as compared to net buying of $9.4 million in the previous week


Top gainers of last week were: Rafhan Maize, Bata Pakistan, Pak Tobacco, Atlas Battery, Mari Petroleum, JDW Sugar, Grays of Cambridge, Allied Rental Modaraba, Bank of Punjab and Hum Network.

Top losers of last week were: Nestle Pakistan, Philip Morris, Sanofi Avantis, Shezan International, Sapphire Fibre, Oil & Gas Development Co., National Foods, TRG Pakistan, Adamjee Insurance and Thal limited.

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 7 October, 2014

The Karachi Stock Exchange (KSE) market Bullish momentum looses steam as KSE stays flat this week. The stock market recovered losses from the previous week as interest in the banking sector resulted in the KSE-100 index again breaching the 30,000 barrier, climbing 397 points (1.3%t) to close at 30,103 on Friday.

Average trading volumes fell 22.7% ahead of Eid holidays and stood at 119.5 million shares traded per day, while average daily values also fell 23.6% and were recorded at Rs6.40 billion. The KSE’s market capitalisation stood at Rs7.01 trillion at the end of the week.

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


  • The banking sector took centre stage following the revelation of inflation numbers for September which clocked in higher-than-expected at 7.68% as compared to 7% in August
  • The benchmark index has shifted between both sides of the 30,000-mark in recent weeks as political uncertainty has left investors unconvinced about the market’s future
  • With floods hitting the country, food inflation is expected to go up, further resulting in a higher CPI in the coming months, which in turn can prompt a hike in the discount rate
  • During the week, the State Bank of Pakistan also announced that it would raise Rs1.4 trillion during the second quarter of the current fiscal year through PIBs and T-Bills
  • Banking sector stocks jumped on these developments with Habib Metropolitan Bank’s share price jumping 14% during the week. Similarly, Allied Bank Limited, National Bank of Pakistan, United Bank Limited and Habib Bank climbing 6.2%, 3.6%, 2.9% and 2.3%, respectively
  • The week also saw a turnaround in the fortunes of the index heavyweight Oil and Gas Development Company as full details of its global depositary receipts (GDRs) issuance were revealed. The company’s stock had taken a beating in recent weeks amid rumours of the issue being offered at a significant discount to its current market price
  • Foreign buying was another major positive for the bourse this week as foreigners purchased a net of $9.4 million worth of equity during the week
  • The FBR reported that tax collection jumped 14% in the first quarter of the fiscal year and stood at Rs549 billion
  • The country’s foreign exchange reserves fell $94 million to $13.2 billion and the Pakistani rupee continued to depreciate against the greenback
  • International Monetary Fund (IMF) has confirmed that a delay has marred the finalization of the fourth review, and is unwilling to give any specific date for release of next tranche of US$555mn under US$6.65bn Extended Fund Facility to Pakistan  
  • Engro finds major faults in LNG terminal agreement. Engro Elengy Terminal Pakistan Limited (EETL) has complained of nonfulfilment of at least 10 contractual obligations by the government and the SSGC 
  • EFOODS is selling its North American business including meat business company Al‐Safa Halal and Engro Foods Canada Limited
  • The government on Tuesday reduced petroleum products' prices up to PRs2.95/ltr, effective from Oct‐14. According to a notification issued by the government, petrol price has been reduced by PRs2.95/ltr, kerosene by PRs1.31/ltr, High Speed Diesel (HSD) by PRs0.95/ltr, Light Diesel Oil (LDO) by PRs0.67/ltr and High Octane Blending Component (HOBC) by PRs1.88/ltr
  • PSO’s receivables against various public sector entities, including power sector have swelled to PRs229bn and it is facing serious liquidity problems. Wapda, Hubco and Kapco together owes about PRs192bn of total receivables 
  • ECC of the cabinet on Thursday approved construction of 700km Gwadar‐Nawabshah pipeline to transport LNG
  • The book building of Saif Power brought another wave of optimism in the IPP sector as it was over‐subscribed by more than 3x, settling its strike price on the upper circuit
  • The correction witnessed in OGDC last week (‐3.76%) was also recovered, closing up 1.71% this week, as investors considered current price levels of the scrip attractive enough along with intentions of allocated participation in the SPO 
  • The Sindh government got another Chinese investment of USD130mn for setting up 50MW Wind Power Project near Gharo city
  • Textile margins likely to increase. A sharp decline in cotton prices in the 1QFY15 has jolted the value chain of the textile sector. It is gradually bringing the sector in the limelight as margins of textile companies are expected to increase in coming months


Top ten gainers of last week were: Habib Metro Bank, Pakistan Cables, Dawood Hercules Chem, Mari Petroleum, J.D.W.Sugar, Rafhan Maize Prod., Grays Of Combridge, Millat Tractors, Allied Bank and Fatima Fert.Co.

Top ten losers of last week were: Shifa International Hospitals, Hum Network Ltd, Muree Brewery Co Ltd, Shezan International Ltd., Thal Limited, Archroma Pakistan, Allied Rental Mod, Engro Foods Ltd, International Steels Ltd and Sui South Gas.

Top ten volume leaders were: BAFL, LPCL, AKBL, NBP, FCCL, EFERT, MLCF, NCL, DGKC, PTC, and UBL.

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