Karachi Stock Exchange Weekly Analysis 9 October, 2011

The Karachi Stock Exchange (KSE) market activity was bullish consecutively for the fourth week. KSE – 100 index has reached 11,853.84 points by gaining of 91.87 points or 0.78 per cent. According to analysts KSE market is likely to cross the psychological level of 12,000 points in next week, if nothing big unexpected happen on the economic and political fronts.

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

  • SBP (State Bank of Pakistan) has announced cut of 150 basis points in the discount rate to 12 per cent
  • Government’s patch up with the Muttahida Qaumi Movement (MQM) and PML-Q
  • Improvement in the rupee’s value
  • Government has increased Oil prices
  • Listed companies in Cement, Fertilizer, Textile and Energy sector which were built, extending and or operating on bank’s loan will fuel the rally. Engro Fertilizer, DG khan cement, are two notable companies among those leverage companies
  • Inflation dropping to 10.46% in September provided the early impetus the market needed during the start of the week
  • Fertilizer manufacturers raised ex-factory urea prices by Rs 174 per bag owing to Sui Northern Gas Pipeline Ltd’s gas suspension to fertilizer producers due to reduced supply from Qadirpur
  • Cement manufacturers in the southern region have also increased prices by Rs15 to Rs400 per 50kg bag
  • Car prices are increased by auto makers (Indus Motors and Pakistan Suzuki)
  • The average volumes of the outgoing week dipped by 9.3 percent to 75.5 million shares. On the contrary, the overall market capitalisation improved by Rs23 billion during the week to Rs3,126 billion
  • Foreign investors, however, sold stocks worth $2.7 million this week against an outflow of $7.3 million last week
  • Fertiliser stocks were the star performers with Fauji Fertiliser Company increased by 5.27 percent on weekly basis, Fauji Fertiliser Bin Qasim was up by 2.86 percent and Fatima Fertiliser rose by 4.14 percent on week-on-week basis following Engro’s decision to hike urea price
  • DG Khan Cement rose by 9.8 percent on weekly basis and remained in the limelight due to excitement regarding the monetary policy and Bhasha Dam
  • The government reportedly decided to convert outstanding financing and accrued interest of public sector power companies and commodity financing into Pakistan Investment Bonds. Actually Government to convert PRs 400 billion loans into PIBs and T‐bills

Tandlianwala Sugar, Thal limited, D.G. Khan Cement, Feroze1888 and Askari Bank were the major gainers while Grays Of Cambridge, Indus Dyeing, Ghani Glass, Pace (Pak) Ltd and Media Times Limited were major losers at KSE this 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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