Karachi Stock Exchange Weekly Analysis 12 February, 2012

The Karachi Stock Exchange (KSE) market movement was bullish in last week, the benchmark KSE100 crossed the psychological level of 12,000pts and maintained (closed at 12,232pts, up 2.08% WoW). The week began with massive buying amid results season in full swing. KSE – 100 index has reached 12,231.60 points by gaining of 248.98 points or 2.07 per cent. While KSE – 30 index has reached 11,415.20 points by gaining of 157.12 points or 1.39 per cent. According to experts, the result season, unchanged discount rate, likely robust full-year financial results of banks, and foreign buying may take the market up by another 100-150 points in next week.

In its assessment report on Pakistan, IMF was critical of State Bank of Pakistan’s (SBP) accommodative monetary policy stance and insisted on more exchange rate flexibility. Moreover, IMF highlighted the fiscal vulnerabilities and believes that the government’s fiscal deficit target of 4.7 percent of the gross domestic product (GDP) is highly optimistic and projects the deficit to reach 7 percent of GDP. Additionally, the fund expects the economy to grow at 3.4 percent and consumer price index inflation to average at 12 percent in the current fiscal year.

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

  • SBP (State Bank of Pakistan) has announced Monetary policy and maintained the discount rate unchanged at 12 per cent
  • Foreign investors have shown interest in various chips supported by improved Pak-US relations and expectations of early resolution of the circular debt issue
  • According to stats by NCCPL (National Clearing Company of Pakistan Limited), foreign portfolio investors have poured another $5.96 million last week
  • Investors had already booked profit at the KSE after the SBP increased rate of interest of treasury bills last week and inflation bounced back in the doubt-digit in January
  • If Indictment of Prime Minister of Pakistan Syed Yousaf Raza Gilani in Supreme Court on 13 February, 2012 will lead for a big change in political setup, the KSE market could react negatively
  • An analyst at KASB Securities said he looked forward to finalisation of the Rs138-144 billion debt swap deal to settle a part of the circular debt in the power sector next week. “This should improve the fortunes of the energy chain.”
  • The average daily volumes improved by 85 percent to 170 million shares last week. Also, the market capitalisation surged by Rs69 billion to Rs3,185 billion
  • The two main results announced this week were Hubco and PSO. Hubco’s earnings were above street estimates as the company posted an earning per share (EPS) of Rs 2.59 in 1HFY12, up 5 percent on yearly basis. Along with the result, the company announced an interim cash dividend of Rs 3 per share. Conversely, PSO’s 1HFY12 result was below expectations, reporting an EPS of Rs 26.72, down 36 percent on yearly basis. Also, the company did not announce any cash payout
  • “Bullish sentiments reigned at the KSE amid speculations over upcoming corporate earnings announcements in blue chips - bank, fertilizer and oil scrips,” said Arif Habib Investments Ltd Director Ahsan Mehanti. staff report
  • Government considering 20% increase in PSDP
  • Qatar agrees to supply 3.5mn tons of LNG
  • Cement sales up 2% YoY in Jan‐12
  • Auto sales up 38% MoM in Jan-12 to 13k units
  • Government urea prices dropped by Rs400/bag in the local market

EFOODS, NBP, AKBL, UBL, SNGP, Bestway Cement, Pak. Int. Cont. Ter. Ltd., Silkbank Limited, Pak Telephone and Nishat Power Ltd. were the major gainers while PSO, AICL, NML, LOTPTA, EFCL, Grays Of Cambridge, Indus Dyeing, Attock Refinery, Engro Polymer and International Industries 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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