Karachi Stock Exchange Weekly Analysis 27 December, 2014

The Karachi Stock Exchange (KSE) market movement was bullish. KSE-100 index closed on 31,993 by gaining 982 points or 3.17%, while KSE – 30 index closed on 20,780 by gaining 742 points or 3.70%.

Trading activity picked up by 18% WoW, with average daily turnover clocking in at 163mn. Foreigners, after four weeks of consecutive selling, turned net buyers and bought USD7.8mn worth of shares.

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

  • Release of IMF US$1.05bn, and supplementary fourth, fifth reviews and accompanying documents by the IMF setting the tone for crucial GoP policies to come
  • The broader market witnessed a sharp increase driven by gains in index heavyweight stocks primarily MCB, UBL, OGDC, HUBC and ENGRO cumulatively contributing ~524 points. IMF country report and military courts’ approval by Prime Minister boosted sentiment
  • Nepra approved a PkR2.97/unit reduction in power tariff for Nov’14 under a monthly fuel price adjustment formula but the government decided to pass on only PkR2.37/unit to consumers and keep the remaining PKR0.6 for debt servicing of Discos
  • According to a recent projection made by the IMF, Pakistan’s oil imports will stand at US$14.6bn in the current year, a decline of US$1.2bn compared to the purchases projected in the budget. Last year, oil imports stood at US$14.67bn. According to PBS, oil imports of the country fell 5.37% to US$6.11bn in the 5MFY15. In comparison, they stood at US$6.46bn in 5MFY14
  • SBP in its latest auction of T-Bills raised PkR44bn against the target of PkR75bn, with a high level of participation seen in the 12-month paper
  • A pullback seen in oil stocks on the back of stable international oil prices and swift moves against the menace of terrorism on the local front gave a breath of fresh air to the bourse
  • Penny stocks were once again grabbed centre‐stage as the week’s top volume leaders featured KEL, BOP and TRG
  • The upcoming earnings season and anticipation of dividend generated healthy interest in fertilizer plays whereby Fauji twins and EFERT both featured in a savvy investors buying list
  • PTI decides to stage come back to parliament
  • 10-64pc increase in gas tariff on the cards
  • UBL, HBL and MCB all marched into positive territory during the week. Expectations of continued monetary easing and a further cut in DR in the next MPS lifted leveraged cement plays spearheaded by MLCF and FCCL
  • NIB, BOP and UBL were amongst the top gainers during the week, while MARI, ICI and ABL featured amongst the top losers
  • ENGRO and EFERT remained in limelight on last trading of the week with news reports of continuation of temporary 60mmscfd gas supply
  • Engro striking deal to install gas booster compressor
  • Luscious dividend yield of blue chip IPP’s such as HUBC and KAPCO kept their price stout as fixed income yield seekers ran short of suitable avenues in the wake of receding bond yields in the money market
  • Government denies complete relief to the power consumer
  • ECC approves subsidy on sugar export, reduces duty on potato export
  • US to give Pakistan USD1bn as Obama signs massive defense budget
  • Unproductive IPPs to be revived on take-and-pay tariff basis
  • Reserves cross US$ 15 billion
  • IMF predicts 5% growth, reduction in inflation
  • Russia earmarks US$ 7 billion investment
  • ECC approves funds for NBP to bridge Bangladesh shortfall
  • PSM is unable to gain benefit from the slight increase in its production due to arrival of steel products from various illegal channels. Though Blast Furnace no. 2 became operational earlier this week after 15‐months of inactivity, the mill is facing serious problems as the steel market is swamped with untaxed, smuggled and under invoiced imported steel products
  • K‐Electric plans to invest USD2bn, in addition to USD1bn it invested to boost its generation, transmission and distribution network
  • BAFL has received subscription amount of PKR6.67bn in respect of IFC equity investment in the bank

Top gainers of last week were: Pak Tobacco Co, Arif Habib Corp, NIB Bank, Shifa International Hospitals, Colgate Palmolive, B.O.Punjab, United Bank, TRG Pakistan Ltd, Bata (Pak) Ltd. and Engro Fertilizer

Top losers of last week were: Muree Brewery Co Ltd, Mari Petroleum, Thal Limited, Pak Services, Archroma Pakistan, ICI Pakistan, Century Paper, PICIC Growth, Allied Bank and Indus Motor.

Top ten volume leaders: KEL, BOP, TRG, MLCF, NIB, ENGRO, JSCL, FCCL, SNGP, DGKC, and EFERT.

Following are few BUY recommendations:

Engro Polymer Chemicals (EPCL) - BUY
Current Price: PKR 12.2
Target Price: PKR 16.5

Engro Corp. Limited (ENGRO) - BUY
Current Price: PKR 223.50
Target Price: PKR 245

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 212.1
Target Price: PKR 302.1

Pak Oilfields (POL) – BUY
Current Price: PKR 387.3
Target Price: PKR 538.3

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 179.40
Target Price: PKR 221

K-Electric Limited (KEL) – BUY
Current Price: PKR 9.2
Target Price: PKR 12.1

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 177.38
Target Price: PKR 221.00

Attock Petroleum (APL) – BUY
Current Price: PKR 525.06
Target Price: PKR 612.00

Allied Bank Limited (ABL) – BUY
Current Price: PKR 110.49
Target Price: PKR 177.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 218.56
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 32.56
Target Price: PKR 39

Following are few SELL recommendations:

Kot Addu Power Co (KAPCO) – SELL
Current Price: PKR 79.55
Target Price: PKR 58.0

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 45.51
Target Price: PKR 38.00

National Bank (NBP) – SELL
Current Price: PKR 67.41
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 20 December, 2014

The Karachi Stock Exchange (KSE) market fails to recover after terror strikes Peshawar. KSE-100 index closed on 31,011 by losing -579 points or -1.83%, while KSE – 30 index closed on 20,038 by losing -503 points or -2.45%.

The index ended up 2% down WoW to 31,011pts. ADTO fell further 15% WoW to 203mn shares, whereas average daily value traded showed 5% WoW decline to US$119mn. Blue chips stocks remained in the limelight. FIPI outflow increased by 25% WoW to US$30mn this week compared to US$24mn outflow seen last week.

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

  • The broader market witnessed a sharp decline mid-week, falling by 814pts, as gruesome terror events unfolded in Peshawar. Furthermore, continued foreign selling also kept most investors at bay. However, with PTI calling off country wide protests, index posted slight recovery towards the end of the week
  • PTI chairman calling‐off of the party’s street protests following the Peshawar tragedy
  • 50‐60 bps decline in 10yr PIBs’ secondary market yields hinting towards another DR cut in the Jan’15 MPS
  • Approval of US$1.1bn IMF tranche
  • Slashing of cement prices by a number of players throughout Pakistan, ranging from PkR5/bag to PkR23/bag
  • The index was further dragged down by weakening international oil prices with the E&P sector declining by 2.7% WoW. Financials also remained under pressure (-1.5% WoW) due to expectations of DR cut in next MPS announcement
  • Trading activity fell by 13% WoW, with average daily turnover clocking in at 138mn
  • For the fourth consecutive week, foreigners remained net sellers, selling USD30.1mn worth of shares
  • ABL transaction: government generates PKR14.4bn
  • Power sector receivables soar to PKR581.32bn
  • The government reinstated the capital punishment which was suspended due to the conditions laid by the EU for GSP plus status. The market participants however panicked when reinstating of capital punishment was announced, plunging the textile stocks
  • PM announces cut in power tariff by PRs2.32/KWh
  • The government is likely to reduce prices of the major petroleum products in the range of PRs5 to PRs15/ltr effective Jan 1, 2015 following a reduction in global fuel price which came down to US$60/bbl, Petroleum Ministry officials said
  • FDI rises 19.2% to $422mn for 5MFY14
  • Power sector receivables to Rs581.32bn
  • LPG price up by Rs5/kg
  • Interest on domestic debt exceeds Rs1 trillion
  • Investors remained focused on cement and banking sector as the cement industry is enjoying low coal prices, low power tariff, increase in demand and expected decrease in interest rate to further improve their bottom line
  • Underlying asset of govt’s Ijara Sukuk substituted
  • Researchers develop new method to diagnose cotton leaf curl virus
  • SBP has given green signal to two local banks for due diligence of KASB Bank for the proposed acquisition of the bank. According to information sent to KSE, the SBP has granted permission to AKBL and Sindh Bank Limited for initiating the due diligence of KASBB
  • Gadoon Textile okays merger with Fazal Mills
  • KEL briefs Dar on its USD3bn 3‐years investment plan
  • KEL considering selling shares to South Korean company
Top gainers of last week were: Shifa International Hospitals, Sui North Gas Pipe., Sui South Gas, Searle Pak, Pakistan Cables, Pioneer Cement, Habib Bank Ltd, Jubilee Gen Ins, K‐Electric and Muree Brewery Co Ltd.

Top losers of last week were: Grays Of Combridge, Mari Petroleum, Nishat Mills Limited, J.D.W.Sugar, Nishat Chunian, Pace (Pak) Ltd., Netsol Technologies, Archroma Pakistan, ICI Pakistan and Pak Tobacco Co.

Top ten volume leaders: BOP, KEL, MLCF, LPCL, JSCL, DGKC, FCCL, SNGP, PIOC, BAFL and SCBPL.

Following are few BUY recommendations:

Engro Polymer Chemicals (EPCL) - BUY
Current Price: PKR 12.4
Target Price: PKR 16.5

Fatima Fertilizer Co (FATIMA) – BUY
Current Price: PKR 32.8
Target Price: PKR 40.9

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 204.6
Target Price: PKR 302.1

Pak Oilfields (POL) – BUY
Current Price: PKR 370.1
Target Price: PKR 538.3

K-Electric Limited (KEL) – BUY
Current Price: PKR 8.7
Target Price: PKR 12.1

United Bank Ltd (UBL) – BUY
Current Price: PKR 163.1
Target Price: PKR 201.0

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 177.38
Target Price: PKR 221.00

Attock Petroleum (APL) – BUY
Current Price: PKR 519.28
Target Price: PKR 612.00

Allied Bank Limited (ABL) – BUY
Current Price: PKR 112.92
Target Price: PKR 177.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 215.13
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 30.64
Target Price: PKR 36.00

Following are few SELL recommendations:

Kot Addu Power Co (KAPCO) – SELL
Current Price: PKR 76.93
Target Price: PKR 58.0

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 45.75
Target Price: PKR 38.00

National Bank (NBP) – SELL
Current Price: PKR 65.15
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 14 December, 2014

The Karachi Stock Exchange (KSE) market was largely volatile during the week, falling 1% WoW to 31,589 points, as political unrest in the country turned investors cautious. KSE-100 index closed on 31,590 by losing -559 points or -1.74%, while KSE – 30 index closed on 20,541 by losing -277 points or -1.33%.

ADTO fell 32% WoW to 238mn shares. Average daily value traded fell 25% WoW to US$126mn. Foreign investment outflow jumped to US$24mn this week compared to US$1.8mn last week.

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

  • The week was dominated by political events with PTI’s move to close down the major cities in the country turned violent. Government’s offer to protesting party of unconditional negotiations eased concerns
  • The government is likely to pay the protesting IPPs from the privatization proceeds
  • FFBL to invest multibillion rupees in new businesses Fauji Fertilizer Bin Qasim Limited (FFBL) has incorporated three wholly-owned subsidiaries: (1) Fauji Meat Limited to establish a slaughterhouse for the halal slaughtering of animals and for the sale of meat products in domestic and foreign markets; (2) Fauji Foods Limited to venture into the dairy foods and allied products business; and (3) FFBL Power Company Limited to set up 118-megawatt coal-fired generation plant at Port Qasim in the vicinity of the company’s existing fertilizer plant
  • Mari Petroleum Company Limited (Mari) disclosed on Wednesday that the Economic Coordination Committee (ECC) of the Cabinet had approved the proposal for dismantling of the company’s Gas Pricing Agreement (GPA) and its replacement with market related formula
  • Oil stocks went deeper into the red due to declining oil prices in international market
  • The government decided to reorganize the power consumer slabs (introducing a 301-500KWh per month category) and announced to reduce tariff by 20% for the new slab
  • PM Sharif announced a PkR2.32/unit cut in the consumer electricity tariff, and announced upcoming cuts in POL prices on account of international oil prices hiting 5‐year lows
  • Engro Corp announced it is considering a secondary offering of up to 10% of its stake in Engro Fertilizer
  • SBP set it’s inflation expectations between 7.5% and 8.5% for FY15
  • ECC of the Cabinet headed by FM snubbed the top brass of PIA for seeking an amount much greater than $52 million to be paid for aircraft to be acquired on a dry lease
  • Government of Pakistan and ADB have signed loan and project agreements amounting to USD150mn dollars for the Loan No 3159/3160: Trimmu and Panjnad Barrages Improvement Project
  • Saudi Arabia slashed its oil prices for Asian and US buyers, in a move some analysts said shows it is stepping up its battle for market share a week after refusing to support OPEC output cuts
  • K-Electric has submitted a request to NEPRA to reduce 74 paisa/unit on account of monthly fuel cost adjustment for October, 2014
  • International Oil prices drop below $60 a barrel
  • Forex reserves rise to $13.92 billion
  • Silkbank achieves 10% CAR
  • PSO resumes fuel supply to PIA
  • Sindh seeks to raise professional tax rate to Rs 0.5 million

Top gainers of last week were: Kohinoor Textile, Shezan International Ltd., D.G.K.Cement, Maple Leaf Cement, Kohat Cement, Avanceon Ltd, Century Paper, Cherat Cement, B.O.Punjab and Lucky Cement.

Top losers of last week were: Abbott Lab, Searle Pak, Mari Petroleum, ICI Pakistan, Pak Tobacco Co, GlaxoSmithKline Pak., Pak Oilfields, EFU Life Assur Ltd., Hum Network Ltd and Nishat Power Ltd.

Top ten volume leaders: BOP, KEL, MLCF, DGKC, FCCL, TRG, PIOC, JSCL, AICL, ENGRO and LPCL.

Following are few BUY recommendations:

Engro Polymer Chemicals (EPCL) - BUY
Current Price: PKR 12.5
Target Price: PKR 16.5

Fatima Fertilizer Co (FATIMA) – BUY
Current Price: PKR 32.4
Target Price: PKR 40.9

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 213.4
Target Price: PKR 302.1

Pak Oilfields (POL) – BUY
Current Price: PKR 391.8
Target Price: PKR 612.6

K-Electric Limited (KEL) – BUY
Current Price: PKR 8.4
Target Price: PKR 12.1

United Bank Ltd (UBL) – BUY
Current Price: PKR 172.1
Target Price: PKR 225.0

Engro Corp. Ltd (ENGRO) – BUY
Current Price: PKR 213.07
Target Price: PKR 245.0

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 177.92
Target Price: PKR 221.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 207.38
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 30.63
Target Price: PKR 36.00

Following are few SELL recommendations:

Kot Addu Power Co (KAPCO) – SELL
Current Price: PKR 76.13
Target Price: PKR 58.0

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 45.87
Target Price: PKR 38.00

National Bank (NBP) – SELL
Current Price: PKR 66.79
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 7 December, 2014

The Karachi Stock Exchange (KSE) market movement was bullish, solid macro theme leads the rally. It has closed at a new all-time high of 32,149 pts. KSE-100 index gained 951 points (3.05%) to close at 32,149 points. KSE – 30 index reached on 20,818 by increasing 485 points or 2.39% percent.

As we move closer to results season for December quarter, we expect trading activity to remain strong, as likely results and expected cash payout will keep the market interest high. Market participants would likely track international oil prices with any unexpected recovery likely to fuel interest in E&Ps. Participation in ABL book building will also guide general sentiment. ADTO jumped 68% WoW to 350mn shares. Average daily value traded rose 51% WoW to US$166mn. FIPI clocked in negative US$1.8mn, compared to a higher outflow of US$4.5mn last week.

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

  • The benchmark index trended upwards throughout the week, gaining 951pts (3.0%) as 11 year low monthly inflation (announced on Monday) fuelled positive sentiment
  • Banks and yield plays gained interest with MCB, UBL, HUBC and FFC adding 232pts through the week
  • Index heavyweight oil stocks traded lackluster, despite the slight reversal in international oil prices, with OGDC (+2.2%), PPL (-2.0%) and POL (-4.7%) cumulatively dragging KSE-100 by 21pts during the week
  • Trading activity picked up with average daily volumes clocking in at 233mn, up 80% WoW
  • Foreigners remained sellers for a second week in a row, selling USD1.76mn worth of shares
  • November CPI inflation came in at an 11-year low of 3.96 percent year-on-year, fuelling speculation of a discount rate cut in the next monetary policy statement in January 2015
  • Forex reserves slip below $13 billion
  • Pakistan receives $1bn sukuk payment
  • 5MFY15: Cement sales show healthy growth
  • Oil and gas sector: leading Russian E&P companies agreed to invest
  • OGDCL, PPL to explore gas in Turkmenistan
  • OGDCL makes discovery in Punjab
  • APTMA chairman says textile exports have risen
  • CASA-1000 agreement inked in Istanbul
  • ECNEC approves eight projects of Rs157.429bn
  • EU approves $800m for several projects
  • US extends conditional Pak military aid for one year
  • China, Pakistan likely to revise FTA
  • Govt for privatising power distribution, generation companies
  • Justice Sardar Raza named new CEC
  • Govt seeks ‘reasonable time’ to add name of abettors
  • Petrol price tumbles by PKR9.66 a litre
  • LNG import: PSO cancels tender in a serious blow to government
  • Inflation rate falls to 3.96% YoY in November
  • PKR 270 billion overdue as of December 2, 2014: IPPs poised to invoke sovereign guarantees
  • Fauji Fertilizer applies for 118MW plant license
  • Cement sales jumped 9.4% in first five months
  • Cotton production target again revised downward
  • The GoP’s commitment to provide gas to textile sector in winter by diverting gas from power sector
  • ABL privatization, successful completion of which will set the tone for HBL’s privatization

Top gainers of last week were: Sui North Gas Pipe., Engro Corp, Maple Leaf Cem., SSGC, NCL, TRG, Shezan International, Kohinoor Textile.

Top losers of last week were: AGTL, HCAR, PPL, POL, OGDC, Murree Brewery, Shifa International Hospital.

Top ten volume leaders: KEL, TRG, BOP, MLCF, JSCL.

Following are few BUY recommendations:

DG Khan Cement (DGKC) - BUY
Current Price: PKR 97.9
Target Price: PKR 118.2

Engro Polymer Chemicals (EPCL) - BUY
Current Price: PKR 12.5
Target Price: PKR 16.5

Fatima Fertilizer Co (FATIMA) – BUY
Current Price: PKR 33.1
Target Price: PKR 40.9

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 217.8
Target Price: PKR 302.1

Pak Oilfields (POL) – BUY
Current Price: PKR 425.8
Target Price: PKR 612.6

K-Electric Limited (KEL) – BUY
Current Price: PKR 8.3
Target Price: PKR 12.1

United Bank Ltd (UBL) – BUY
Current Price: PKR 180.9
Target Price: PKR 225.0

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