Karachi Stock Exchange Weekly Analysis 30 November, 2014

The Karachi Stock Exchange (KSE) market index remained in the red zone. KSE-100 index lost -297 points (-0.94%) to close at 31,198 points. KSE – 30 index reached on 20,333 by losing -277 points or -1.35% percent.

Trading activity turned weak in bearish market with average daily turnover of 129.6mn, down 23% WoW. Foreigners turned sellers during the week, selling 4.47mn worth of shares relative to buying of USD4.8mn last week. Market participants would likely track Nov-14 CPI scheduled to be announced early next week while investors would also be watchful of foreign flows.

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

  • Uncertainty regarding outcome of the political showdown between the Government of Pakistan and PTI took its toll on the market this week
  • Receding oil prices drag KSE-100 index. KSE-100 index shed by 296 points (0.9% WoW) during the week owing to weakening international oil prices
  • Index heavy weight oil stocks primarily OGDC, PPL and POL fell by 8%, 6% and 6% respectively primarily on the back of falling oil prices cumulatively dragging index by ~400 points. Weakness in oil stocks was offset by rally in ENGRO which contributed ~71 points as index gains
  • Prime Minister Nawaz Sharif defers gas tariff hike
  • Pakistan receives $734.5m under CSF
  • Sukuk five times oversubscribed. Pakistan has successfully returned to the international Sukuk market, with the issuance of US dollardenominated Sukuk Notes under Reg‐S/144a format. The last international Sukuk was issued nine years ago. GoP was seeking to raise only USD500mn. However, the issue received a very high response from investors who made a subscription of USD2.3bn, which was nearly 5‐ times of the target amount
  • IPPs send govt notices for Rs42bn dues
  • Saudis block Opec output cut, sending oil price plunging
  • NML – Improving textile outlook strengthens investment case: We have revised up our FY15/16 EPS estimates for NML by 4%/8% to PKR17.4/PKR23.4 respectively. We maintain BUY call on NML as it offers 30% upside to our Jun-15 PT of PKR152/sh
  • EFERT – Materialization of key triggers to lure investor interest: We have tweaked our estimates for EFERT. We maintain BUY on the stock as it offers 14% upside coupled with 2% dividend yield
  • Fertilizers: 10MCY14 urea offtake declines by 2% YoY: Urea offtake in Pakistan declined by 14% YoY and 2% MoM in Oct-14.
  • Widening of current account deficit to US$1.7bn for 4MFY15, up 31%YoY
  • T‐bill yields easing off by 51bps in the latest auction while a 30‐40bps increase was seen in the recent PIB auction
  • OPEC’s decision not to cut petroleum production, despite the plunge in prices in recent months
  • OGRA forwarded a summary to MoP & MoF, recommending a reduction in prices of almost all petroleum products for Dec’14. Which is accepted by government of Pakistan
  • International oil price volatility is expected to keep the Oil & Gas sector under‐pressure, which can create an overall drag on the market
  • Nov’14 inflation figures are also likely to invigorate investors’ interest in the market
  • Expectation of another rate cut (Jan’15) by market participants on the back of macro‐economic improvements is likely to keep leveraged sectors high on investors’ radar where we believe sharp capital gains can be earned in medium to smaller cement players
  • JSCL and MLCF were at the top of the volume leader‐board in the week garnering a total turnover of 156mn shares in the week
  • Leveraged plays such as ENGRO and MLCF were amongst the top gainers during the week, driven by anticipation of finance cost savings in the wake of the recent 50bps DR cut. And Leveraged plays such as ENGRO, EFERT and MLCF are likely to witness another round of price appreciation
  • News flow regarding the materialization of Sukuk issue worth USD1bn and the likely inflow of USD1.1bn tranche propelled expectations of an improved FX position in the coming weeks
  • CDC of Pakistan is taking additional measures to facilitate the account holders of KASB Securities during its current suspension period. CDC has handled 126 Transfer of Holding Cases while 24,921,101 Securities worth around PKR1bn have been transferred from KASB Securities into respective accounts
  • The Chinese government and banks will finance Chinese companies to build USD45.6bn worth of energy and infrastructure projects in Pakistan over the next 6‐years, according to new details of the deal seen by Reuters
  • FFBL, the only fertilizer complex in the country producing DAP fertilizer and granular urea, plans to make the first foray in the food processing industry. The company announced that it was considering buying out NOPK – the listed company engaged in the manufacture and sale of Nurpur brand of dairy products
  • At the time when Pakistan’s overall exports are falling because of energy outages and exchange rate appreciation, its exports to European Union increased 18% to USD5.01bn during the 8MCY14 of this year after the GSP. The exports to EU were recorded at USD4.24bn in the same period a year earlier
  • Japan’s Mizuho Bank Limited will open offices in Pakistan under its expansion plan, said Hisanori Matsubayashi, senior manager, Asia and Oceania Division
  • Government to divest shares in ABL by December
  • Islamic banking profitability up by 57.5pc
  • Urea sales drop by 14pc
  • Banks NPLs rose by 2.2pc
  • LSM shows paltry growth of 1.86 pc for jul-sep
  • Imports rose from 16pc
  • Nepra has decreased the power tariff by PRs0.47/KWh for the month of October 2014 in the head of monthly fuel adjustment due to which PRs4bn relief will be provided to the masses in the electricity bills they will be receiving in the month of December
  • Fertilizer volumes: Slow start to the Rabi season
  • Forex reserves declined 0.06% to US$13.2bn as of November 21, 2014

Top ten gainers of last week were: Sui North Gas Pipe., Engro Corp, Maple Leaf Cem., Abbott Lab, Pakgen Power Ltd., Cherat Cement, Kohinoor Textile, Pioneer Cement, Sui South Gas and Nishat Chunian.

Top ten losers of last week were: Hum Network Ltd, Oil and Gas Deve, Jah.Sidd. Co., Pak Oilfields, Rafhan Maize Prod., Pak Petroleum, Pak.Int.Con., Pak Tobacco Co, Century Paper and Packages Limited.

Top ten volume leaders: JSCL, MLCF, EFOODS, EFERT, ENGRO, TRG, SCBPL, DGKC, HUMNL, KEL and LPCL.

Following are few BUY recommendations:

DG Khan Cement (DGKC)
Current Price: PKR 92.3
Target Price: PKR 127.00

Maple Leaf Cement Factory (MLCF)
Current Price: PKR 36.7
Target Price: PKR 45.5

Engro Polymer Chemicals (EPCL)
Current Price: PKR 11.9
Target Price: PKR 16.5

Oil & Gas Development Co. (OGDC)
Current Price: PKR 213.1
Target Price: PKR 302.1

Pak Oilfields (POL)
Current Price: PKR 446.6
Target Price: PKR 612.6

K-Electric Limited (KEL)
Current Price: PKR 7.6
Target Price: PKR 12.1
   
United Bank Ltd (UBL)
Current Price: PKR 177.1
Target Price: PKR 225.0

Fatima Fertilizer Co (FATIMA)
Current Price: PKR 31.54
Target Price: PKR 37.00

Pakistan Petroleum (PPL)
Current Price: PKR 189.62
Target Price: PKR 221.00

Allied Bank Ltd (ABL)
Current Price: PKR 113.47
Target Price: PKR 151.00

Habib Bank Ltd (HBL)
Current Price: PKR 204.75
Target Price: PKR 262.00

Bank Al-Falah (BAFL)
Current Price: PKR 30.25
Target Price: PKR 36.00

Following are few SELL recommendations:

Kot Addu Power Co (KAPCO)
Current Price: PKR 71.03
Target Price: PKR 58.00

Nishat Power Ltd (NPL)
Current Price: PKR 45.98
Target Price: PKR 38.00

National Bank (NBP)
Current Price: PKR 62.54
Target Price: PKR 53.00

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 23 November, 2014

The Karachi Stock Exchange (KSE) market momentum was bullish and continued to break records. The index eclipsed the 32K psychological barrier for the first time in history. KSE-100 index rose 150 points (0.5%) to close at 31,494 points. KSE – 30 index reached on 20,610 by gaining 81 points or 0.40 percent.

According to analysts, next week is expected to be positive due to more than one helpful variable. On the other hand it is a fact that revitalizing political conflict. The average traded daily volume during the week ticked at 259 million shares which showed a decrease of 8.48 percent WoW. Net foreign equity inflows were $ 4.81 million as compared to last week’s $10 million net inflow, a decrease of 52 percent WoW. The decrease in foreign inflows and average daily volumes is due to panic created in the market during the week. 

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

  • KSE-100 index managed to gain 150 points (↑0.5% WoW) during the week marred by heightened volatility. Trading activity remained flat WoW with average daily turnover of 168mn, close to last weeks’ average
  • Foreigners remained net buyers during the week, buying 4.8mn worth of shares relative to USD 10mn last week
  • Exuberance during the first half of the week, which was stimulated by SBP‘s decision to slash interest rates by 50bps, was cut short due to institutional selling in latter part of the week
  • LUCK led the resurgence and added 51.1 points to the index. However, anticipated NIM compression for banks in the backdrop of downturn in interest rate cycle kept the sector in check, with UBL in particular dragging the index by 63 points
  • Power sector receivables surge to Rs577bn
  • ECC approves 30pc hike in gas tariff
  • KASB bank and its subsidiary concerns being placed under a 6 month moratorium with a PkR300,000 transaction limit due to the parent bank’s inability to meet the SBP’s minimum capital requirement of PkR10bn
  • The situation was made worse due to the Securities and Exchange Commission of Pakistan suspending trading for one of the largest brokerage houses in the country, which created confusion and chaos in the market
  • The release of $1.1 billion by the IMF and the issuance of Sukuks amounting to $500 million by mid-December are expected to shore up the country’s foreign exchange reserves and stabilise the currency moving forwards
  • The cement sector was again in the limelight with the discount rate cut and weakening coal prices resulting in improved outlook for the sector
  • The banking sector took a hit after the rate cut prompted a sharp decline in PIB yields, which will result in lower net spreads for banks
  • The global oil prices continued to remain under stress, hence the government may continue to  reduce the oil prices which will eventually translate into lower inflation for the upcoming month
  • Government of Pakistan that it had achieved the target of ‘zero load‐shedding’ of electricity for all industries
  • Ghazi Fabrics International Limited, a listed company, has decided to set up 8.1MW heavy fuel oil based captive power plant at budgeted cost of PKR 130 million

Top ten gainers of last week were: Grays Of Combridge, Shezan International Ltd., Jah.Sidd. Co., Muree Brewery Co Ltd, Abbott Lab, Shifa International Hospitals, Sui South Gas, Jubilee Life Ins, Searle Pak and Sui North Gas Pipe.

Top ten losers of last week were: Archroma Pakistan, Pak Tobacco Co, Hum Network Ltd, B.O.Punjab, Bata (Pak) Ltd., Nishat Chunian, ICI Pakistan, Thal Limited, Atlas Honda Limited and Avanceon Ltd.

Top ten volume leaders: JSCL, MLCF, DGKC, EFERT, ENGRO, LPCL, HUMNL, AICL, BOP, PTC,  and FABL.

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 16 November, 2014

The Karachi Stock Exchange (KSE) market momentum was bullish and the index eclipsed the 31K psychological barrier for the first time in history. KSE-100 index rose 414 points (1.34%) to close at 31,344 points. KSE – 30 index reached on 20,529 by gaining 201 points or 0.99 percent.

Average daily turnover for the week surged by 29.5%WoW to 283.3mn shares, with volume leaders being JSCL (110.7mn shares), MLCF (47.5mn shares), EFERT (46.3mn shares) and ENGRO (32.6mn shares). According to analysts, monetary policy announcement on Saturday, positive news flow from PM’s visit to EU will be key factors dictating market movement in the upcoming week.

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

  • State Bank of Pakistan (SBP) has reduced the policy rate by 50 basis points (bps) to 9.5 percent on Saturday, thus it is expected Karachi equity market would remain bullish in upcoming week
  • Easing in the political exasperation also played its role in propelling the benchmark   
  • Release of auto numbers by PAMA depicting a 27%YoY increase in auto sales to 12,651 units in Oct’14
  • Cement dispatches clocking in at 2.1mn tons in Oct’14; up 6% YoY
  • Pakistan plans to issue a US dollar‐denominated Islamic bond worth at least USD500mn this month and also hopes to obtain USD1.1bn from the IMF soon, FM
  • Allowance of sugar exports and imposition of 20% import regulatory duty on the same
  • Trade deficit swelling to USD8.8bn in 4MFY15
  • Scrips weighing down on the Index included POL (-4.1%WoW, due to continued decline in oil prices), UBL (-3.4%WoW) and ICI (-2.6%WoW)
  • The Prime Minister of Pakistan visited China, Germany and Britain where he inked many contracts mainly building power plants to beat energy crisis. The foreign tours were rays of light for a country with ravenous appetite for FDI and energy
  • The decline in oil prices in international market was also rendered oil stocks at declining trajectory
  • Auto sales going up the hill
  • Germany desires to invest energy sector in Pakistan
  • LNG import to start from March 2015
  • OGDCL stake sale postponed after IMF nod
  • FDI 26.5% less then previous 1QFY15 year
  • Power receivables soar to Rs 577.33 billion
  • Mari Petroleum was infused with fresh rigor as approval of its new pricing formula pushed the scrip deep into green
  • Foreign participation remained stout with an inflow of USD 9.46 million which takes the MTD tally at USD 34.8 million
  • China promised Pakistan investment worth USD42bn, an, as Islamabad promised to help Beijing fight what it calls a terrorist threat in its far‐west. PM oversaw the signing of 19‐agreements and memorandums mostly centred on the energy sector as he met Chinese President Xi Jinping in Beijing 
  • Australia will significantly slash tariff on the import of Pakistan’s textile products from next year
  • GoP restored gas supply to the textile units in Punjab by suspending the gas‐load management, while connections already closed are also being restored

Top ten gainers of last week were: Mari Petroleum, Archroma Pakistan, EFU General Ins, Pakgen Power Ltd., Jah.Sidd. Co., Engro Corp, Pak Reinsurance, Gul Ahmed, EFU Life Assur Ltd. and Abbott Lab.

Top ten losers of last week were: Soneri Bank, Pak Suzuki Motor, Feroz 1888 Mills Ltd, Grays Of Combridge, Nishat Chunian Power, Indus Motor, Century Paper, Allied Rental Mod, Pak Oilfields and International Steels Ltd.

Top ten volume leaders: JSCL, MLCF, EFERT, ENGRO, AICL, DGKC, BAFL, TRG, PTC, KEL, and SHFA.

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 9 November, 2014

The Karachi Stock Exchange (KSE) market, Positive news flow takes bourse to new highs. KSE-100 index rose 553 points (1.82%) to close at 3 0,930 points. KSE – 30 index reached on 20,328 by gaining 223 points or 1.11 percent. According to experts, expectations regarding DR cut in monetary policy announcement, which is due in upcoming weeks, shall drive overall market direction while results of OGDC book building will remain a key trigger for the E&P sector.

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

  • Decline in CPI is expected backed by local POL product prices slashed by 7‐9% at this month’s start has led to investors building a DR cut scenario in the coming MPS announcement
  • KSE-100 index gained 554 points (+1.8% WoW) post long weekend with lower than consensus inflation figures in Oct-14 and weakening international oil prices remaining key triggers for the bull run
  • LUCK (+8.2% WoW) remained the key contributor to index gains and contributed 83 points during the week. However, bearish sentiment in OGDC (-1.3% WoW) on account of falling oil prices dragged the benchmark index by 37 points
  • Trading volumes continued their upward trend with average daily volumes clocking in at 168mn shares, up 63% WoW
  • Foreigners turned net buyers during the week and mopped up shares worth USD25.6mn which was primarily due to sizeable sale in HUMNL shares by sponsors (~USD22mn)
  • Wheat support price fixed at PKR 1300 (increased by 8.4%)
  • Import of used cars jumps 63% over 3-month period
  • Consumer Price Index inflation eases in October to 5.8%
  • Inflation for the month of October clocking in at an 18 month low of 5.8% YoY fuelling expectations of a rate cut by the SBP in its November 2014
  • Book building for offloading of 322 million shares in OGDC by the Government of Pakistan taking place over the week with a floor price set at PkR216 / share. But later on it's selling is cancelled by government because offers are not according to their expectations
  • The Yen falling sharply in international currency markets on the back of the BoJ’s surprise monetary policy easing
  • Oil & Gas Development Company (OGDCL) has made a discovery in Nim block at Jarwar 01
  • Forex reserves surges by 1.8 pc
  • Massive increase in gas tariff likely
  • Beneficiaries of fall in interest rates would be banks that have stacked PIBs in their investment portfolios due to which BAFL and HMB gained highest in the sector this week
  • Drop in global coal prices and Yen depreciation of 8% FYTD continued the rally in the Cement and Auto sector, respectively
  • Finance Minister urged to allow sugar export, impose duty on import
  • Around 6 companies have submitted their EOIs against imported coal based IPPs of cumulative capacity of 6600MW to be set up at Gadani Power Park Balochistan
  • SSGC regretted that it has been unable to finalize annual accounts for the second year in a row due to a delay on part of the OGRA
  • PTCL has introduced the VPS for its employees which will be available for one month, effective from November 5, 2014. Besides reducing retirement age from 20 to 18 years, the additional two years’ benefit has also been added to eligible pensioners. In addition to these benefits, employees are topped up with Early Bird Bonus (PKR200,000) and Group Bonus (PKR150,000), fulfilling the requisite conditions

Top ten gainers of last week were: Jah.Sidd. Co., Hum Network Ltd, Mari Petroleum, Pak Suzuki Motor, Grays Of Combridge, Gul Ahmed, Indus Motor, Sui South Gas, Pioneer Cement and Searle Pak.

Top ten losers of last week were: J.D.W.Sugar, GlaxoSmithKline Pak., Colgate Palmolive, Allied Rental Mod, Bata (Pak) Ltd., National Foods, Pak Oilfields, NIB Bank, P.S.O. and United Bank.

Top ten volume leaders: JSCL, MLCF, EFERT, FCCL, BAFL, DGKC, SHFA, BOP, SNGP, KEL, and AKBL.

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

Companies Results Oct 2014

Tariq Glass (TGL):
Profit/Loss (million): 164.34
EPS: 2.24
Div/Bouns: NIL

Ghani Glass (GGL):
Profit/Loss (million): 19.805
EPS: 0.27
Div/Bouns: NIL

K-Electric (KEL):
Profit/Loss (million): 314.77
EPS: 0.11
Div/Bouns: NIL

Pakistan Oil Field (POL):
Profit/Loss (million): 4166.783
EPS: 17.26
Div/Bouns: NIL

Attock Cement (ACPL):
Profit/Loss (million): 470.402
EPS: 4.11
Div/Bouns: NIL

Gul Ahmed Tex (GATM):
Profit/Loss (million): (177.093)
EPS: (0.31)
Div/Bouns: NIL

Netsol Technologies (NETSOL):
Profit/Loss (million): (190.235)
EPS: (2.20)
Div/Bouns: NIL

Pakistan Reinsurance  (PAKRI):
Profit/Loss (million): 401.648
EPS: 1.339
Div/Bouns: NIL

Karachi Stock Exchange Weekly Analysis 2 November, 2014

The Karachi Stock Exchange (KSE) market maintained its upward momentum on the back of strong corporate earnings as the benchmark KSE-100 index rose 278 points (0.9%) to close at 30,376 points during the week ended October 31.

Average trading volumes remained steady at 172 million shares, up 4.4% over the previous week. However, average trading values shot up by 28.6% and stood at Rs10 billion per day. The KSE’s market capitalization stood at Rs7.03 trillion at the end of the week.

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

  • Investors overlooked declining oil prices and continued sell-off by foreign investors to aid the index in cementing its position above the 30,000-point barrier
  • While local investors largely remained sidelined ahead of the Ashura holidays, foreigners showed interest across the board, except in the power sector
  • The banking sector dominated trading activity for the majority of the week after United Bank Limited announced better-than-expected earnings for the nine-month period of 2014
  • The power sector was up next with the country’s two largest independent power producers (IPPs), Kapco and Hubco announcing their earnings. Kapco’s earnings were above market expectations while Hubco also matched market expectations, resulting in activity in the sector
  • The auto sector’s strong performance at the bourse continued with Pak Suzuki Motor Company (PSMC) announcing earnings above market expectations
  • Oil Marketing Companies (OMCs) came into the limelight after the Economic Coordination Committee approved the increase in OMC margins in a meeting on October 30
  • Foreigners also continue to be net sellers and sold $7.84 million worth of equity during the week
  • Results of textile companies, especially NML lost its velocity with a lost of nearly 8%W/W
  • Refineries posted worthless results hence all the major refineries posted negative returns
  • Cement stocks were unable to impress the market with their financial results but on a return basis LUCK, DGKC and MLCF posted better returns
  • Twenty‐one Asian nations have signed on to a China‐driven initiative to create a new development bank for Asia that’s aimed at boosting infrastructure investment of all kinds
  • Pakistan and the IMF will start discussions from in Dubai on Pakistan's economic performance under the cobbling together of 4th and 5th review under USD6.64bn EFF
  • ECC of the Cabinet is expected to approve FY14‐19 envisaging textile exports at USD26bn, besides creating three million jobs, revealed
  • GoP approved incentives for use of imported LNG and allowed 570,000 tonnes of urea import
  • NEPRA approved the increase in tariff for distribution companies in a public hearing on Monday by PRs0.52/KWh on account of fuel price adjustment for September 2014

Top ten gainers of last week were: Soneri Bank, Searle Pak, Pak Suzuki Motor, Colgate Palmolive, Service Indus, Pak Tobacco Co, Nishat Power Ltd, Archroma Pakistan, Kot Addu Power Co. and Packages Limited.

Top ten losers of last week were: Nishat Mills Limited, Attock Refinery Ltd., Pace (Pak) Ltd., Nestle Pakistan, Bata (Pak) Ltd., Pakistan Cables, Fauji Cement Company Ltd., Allied Rental Mod, Bata (Pak) Ltd. and Shifa International Hospitals.

Top ten volume leaders: EFERT, FABL, BOP, MLCF, KEL, LPCL, DGKC, FCCL, PSO, UBL, and AKBL.

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