Karachi Stock Exchange Weekly Analysis 14 April, 2012

The Karachi Stock Exchange (KSE) market was dull and range bound. KSE was cooling off ahead of quarterly results. KSE – 100 index has reached 13,799 points by losing 76 points or 0.5 percent. On numerous occasions the index tested the 14,000 level, however lacked the momentum to make any significant in‐roads into 14,000 territory.

The Average daily volumes declined by 3.3% to 374 million shares while foreigners turned net buyers worth US$ 2.3 million.

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

  • SBP (state Bank of Pakistan) in its monetary policy statement maintained a status quo on discount rate at 12%
  • Economic Coordination Committee (ECC) approved institutional investments in National Saving Schemes (NSS)
  • SECP in its budgetary proposal asked for a gradual reduction in corporate tax rate
  • GoP asked Etisalat to make payment of the pending PTCL sale proceeds
  • Remittances recorded US$1.14bn in Mar‐12
  • LSM production up 6% YoY in Feb
  • 3‐year term for KSE board approved
  • Big ticket names such as FFBL, FFC, DGKC, POL and APL are featuring in the list of companies announcing their score cards next week
  • Break-through in the Pak-US relations with resuming NATO supplies and CFS restored by US, kept the investors upbeat
  • Finance Minister has said that there will be no new tax in next budget
  • Engro reduces DAP price by Rs100/bag following int'l price decline
  • Power sector again owes Rs192bn to PSO

Packages Limited, Adamjee Insurance, Pak Suzuki Motor Co. Ltd., HCAR, AICL, PSMC, UBL, Askari Bank Ltd., United Bank Ltd., Pakistan Telecommunication, Fauji Cement Company Ltd., Pak Petroleum Ltd., Indus Motor Company Limited, National Bank Of Pakistan, Nishat (Chunian) Limited, Bestway Cement, K.E.S.C., and NetSol Technologies were the major gainers while EFOODS, EPCL, FFC, ENGRO, LUCK, Pace (Pak) Ltd, TRG Pakistan, Jahangir Siddiqui & Co, E.F.U. General Insurance and Arif Habib Corporation were major losers last week.

According to experts, Banks could see some pressure in the early part of next week due to the higher minimum deposit rate for saving deposits.

The top-5 scrips at the futures counter holding 62% of the total open interest were ENGRO, NBP, DGKC, AHCL and FFC.

From an investment perspective, we recommend an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (our top picks in the energy chain). Our liking also extends to FFC, Lucky, DGKC, FCCL, APL, FFBL, ENGRO, NML and PTC where robust business models and strong fundamentals make these names a worthwhile play.

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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