Karachi Stock Exchange Weekly Analysis 15 January, 2012

The Karachi Stock Exchange (KSE) market movement was bearish and faced a hefty fall during the week. KSE – 100 index has reached 11,014.46 points by losing of 110.89 points or 0.99 per cent. The average daily volumes fell by 33.4 percent to 28.1 million shares last week from 42 million traded in the week earlier. The market capitalisation fell by Rs27 billion to Rs2,866 billion.

Supreme court has already warns government of disqualifying Prime Minister and President. The movement of KSE in next week will depend on Supreme court hearing in NRO (National Reconciliation Ordinance) and memo commission will also resume its hearing. Electoral politics will also affect market in next week.

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

  • Political noise over the memogate issue in supreme court and the Prime Minister’s statement on unconstitutional and illegal actions by the government functionaries have really hurt the sentiments of investors
  • Prime minister has also dismissed the defence secretary, which has created further friction between government and army
  • Pak Rupee is continuously depreciating
  • Gas shortfall in industries is also creating serious problems
  • On the macro front, swelling of trade deficit also dampened investor sentiment
  • Prime Minister has inaugurated Kunnar-Pasakhi Gas pipeline project, which has excited the investors up to some extent
  • Both FFC and FFBL raised urea prices this week, consequently outperforming the market by 5 percent and 4 percent, respectively
  • Corporate results season can also affect market and lead it to positive direction
  • The market may react positively if Federal Board of Revenue accepts the Securities and Exchange Commission of Pakistan’s proposal of changing rules for capital gains tax regime as per stock brokers and investors’ wish
  • Cement sales up 4% during 1HFY12
  • Analysts have also recommended buying LUCKY cement and DGKC
  • Remittances increase 19% YoY in 1HFY12
  • Trade deficit widens 38% in 1HFY12
  • 100mmcfd gas added to system, gas crisis could end in 2013

Shifa Int Hospitals Ltd, TRG Pakistan, K.E.S.C., Colgate Palmolive and Jahangir Siddiqui & Co were the major gainers while Pak Telephone, Nestle Pakistan Limited, International Steel Limited, Dawood Hercules and Al‐Ghazi Tractors 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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