Karachi Stock Exchange Weekly Analysis 5 March, 2012

In the Karachi Stock Exchange (KSE) market bulls were seen dominating last week. KSE – 100 index has crossed the psychological level of 13,000 points. KSE – 100 index has reached 13,089 points by gaining of 382.45 points or 3.01 per cent, which is the highest level achieved since June 2008. Please note that after this increment, the index has increased by 1,741.31 points, or 15.34 percent, to date since the beginning of calendar year 2012.

Although avg. daily turnover was down 11%WoW to 213mn, activity was still relatively healthy with volumes being topped by JSCL, FCCL and DGKC.

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

  • Investor’s confidence have skyrocketed because of healthy corporate results and on development of CGT (Capital Gain Tax) related issues
  • Amid IMF repayment of $399 million and rising oil prices in the international market have also played important role in the movement of market
  • TRCG forms Implementation Group
  • SBP warns rating downgrade risk on stopping cash injection
  • Fiscal deficit rises to PRs532bn for 1HFY12
  • Gas supply to ENGRO will be restored from 4th March, 2012 and there are expectations of possible urea price cut in the upcoming week. These news also have dragged FFC
  • Chairman FBR (Federal Board of Revenue) says there will be no new tax in FY13 budget.
  • FBR to reduce corporate tax rate gradually from 35% to 30%
  • Top performing stocks continued to be dominated by the banking & cement sector scrips and in this regard UBL (+12.5%), MEBL (+10.1%) and DGKC (+9.5%) continued to gain on good result announcements and a healthy outlook.
  • Key economic announcement during the week included the CPI for Feb’12 which came in at 1.05%YoY/0.3%MoM
  • In next week result season will come to an end, two key results are expected in next week i.e. FATIMA & NBP
  • Iran has further shown interests in bilateral trade relationships with Pakistan and offered oil on concessionary terms with barter arrangements.
  • US has showed its reservations regarding Pakistan – Iran gas pipeline project
  • According to NCCPL, foreign portfolio investors have injected US$ 5.6 million in this week
  • Cement export prices up US$12/ton to US$50/ton for Afghans
  • Construction and materials sector outperformed the broader market by 21 percent on weekly basis, supported by strong earnings outlook of the cement companies due to improved margins
  • Power Tariff increased by 39% to Rs3.03/unit
  • The government has also increased the prices of petroleum products (up to Rs 8.67 per litre), compressed natural gas (up Rs 1.77 per kilograms) during the week
  • Pak rupee also plunged to its all-time low level of Rs 91 against the dollar

Nestle Pakistan, E.F.U. General Insurance, Bestway Cement, Pak. Int. Cont. Ter. Ltd., Indus Dyeing and Feroze1888 were the major gainers while Unilever foods, Bata Pakistan, Soneri Bank, Jahangir Siddiqui & Co, P.I.A.C. (A) and Faysal Bank 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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