Karachi Stock Exchange Weekly Analysis 29 August, 2010

As was expected, Karachi Stock Exchange (KSE) performance was lacklustre and the trading trend was bearish during the week because of flood crisis, damage in exports and broader inflationary concerns. Market has recovered a little bit by the end of week, The Karachi Stock Exchange (KSE) 100-share index closed at 9,598.71 points by losing of 261.66 points or 2.9 percent. The meeting of IMF (International Monetary Fund) executives with Pakistan’s economic managers in Washington next week would be very important.

Following news have played vital role in Karachi Stock Exchange (KSE) index movement:
  • Local investors were very careful and cautious because of widespread flood crisis throughout the country.
  • Investors are uncertain about the meeting of IMF (International Monetary Fund) and Pakistan officials regarding power tariffs and GST (General Sales Tax)
  • The meeting has been cancelled, with KSE chairman to resolve the issues of Margin Trading System (MTS), and further delaying the product’s introduction
  • The corporate results announced last week of some blue chips i.e. PTCL, NBP, BAFL and FABL have really disappointed the sentiments of investors
  • As International oil prices are falling continuously, it has adversely affected PSO and POL
  • Exploration firms has cut down 50 percent drilling because of flood and Gas import plan has also threatened due the sanctions of Iran
  • Political turmoil and instability especially after the statements of MQM(Muttahida Qaumi Movement) leaders for calling army support against corrupt politicians
There is some positive news also which can affect Karachi Stock Exchange (KSE) in upcoming weeks:
  • IMF is reconsidering its imposed conditionals and easing the terms of its $11 billion program. International Community is committing more aid on UN’s appeal for flood victims which has increased $800 million
  • Asian Development Bank (ADB) and World Bank (WB) are assisting Pakistan for reconstruction after the flood
  • As funds are continuously arriving from International donors, the value of Rupee has becoming strong as compare to dollar
  • Moody’s and S&P stated that the credit rating for Pakistan will not be affected immediately
  • The corporate results of ICI and Lotte Pakistan was very positive
  • Foreign Portfolio Investors are continuously showing interest especially in Banking and Oil & Gas sectors. They have invested $6.07 million during the week while it was $6.09 million in last week
POL, ENGRO, PSO, MCB, OGDC, Lotte Pakistan, Silk Bank, AHSL, DGKC were on top at KSE last week. Gharibwal Cement, Unilever Pakistan Foods, Sui South Gas, Bestway Cement and Jevedan Cement were major gainers while Adamjee Insurance, Pakistan Refinery, Indus Motor, EFU General Insurance, Shifa Int. Hospitals were major Losers at KSE last week.

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram

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