Karachi Stock Exchange Weekly Analysis 6 November, 2011

The Karachi Stock Exchange (KSE) market activity was bullish. KSE – 100 index has reached 11,957.30 points by gaining of 395.63 points or 3.4 per cent. The KSE 30-share index surged 397.48 points, or 3.64 percent, to 11,292.57. According to analysts, KSE – 100 index will cross the psychological level of 12,000 points in next week. But the market has a long weekend this time due to Eid and if anything untoward happened during the holidays, the market would react accordingly.

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

  • There were rumours that the government released funds to PSO to ease circular debt concerns in the energy sector
  • Pakistani Rupee gaining strength during the week and touching a three-month high of Rs 86.16 (15 weeks highest value) versus the dollar
  • Investment remained bullish in fertilizer stocks on higher local urea prices and approval for release of gas to fertilizer producers despite concerns over approval of rise in gas prices in fertilizer sector
  • The week started off on a positive note owing to reports of hike in urea prices by Engro. Engro is still facing gas suspension at its new urea plant due to which the company raised its urea prices
  • Investors have also some serious concerns over domestic political scenario and global economic outlook
  • The energy sector would lead the rally as Pakistan State Oil, Oil & Gas Development Company and Pakistan Petroleum would be the major beneficiaries of the resolution of circular debt issue
  • Gas load management plan was approved during the week and it was decided that two out of four fertilizer plants on Sui Northern Gas Pipeline Limited network would not be supplied gas in November
  • PSO announced higher-than-expected Q1 FY12 result of Rs 14.50 per share (up 207 percent on yearly basis), while Engro posted nine months 2011 earnings of Rs 14.21 per share (up 27 percent)
  • The daily turnover fell by 31.08 percent to close at 55.88 million shares as compared to 81.08 million shares of the previous week. The average daily turnover fell by 2.5 percent to 73.4 million shares from 75.3 million shares last week. The overall market capitalisation rose by Rs95 billion week-on-week to Rs3,116 billion
  • “If the government manages to attract banks to buy its one-year treasury-bills and five-year Pakistan Investment Bonds (PIBs) worth Rs391 billion to resole power sector circular debt, the current buying rally at KSE would go farther,” said Faraz Farooq, an analyst at First Capital Equities
  • CPI up 10.96% YoY in Oct‐11
  • Cement Sales up 0.74% YoY in October
  • Tax collection rises 24% YoY to PRs492bn in 4MFY12
  • Power tariff raised by Rs1.77/unit, raising inflation concerns

Pace (Pak) Ltd, Jahangir Siddiqui & Co, Engro Corporation, Pakistan State Oil and Millat Tractors were the major gainers while Feroze1888, NetSol Technologies, Pak Cables, Shifa Int Hospitals Ltd and International Industries 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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