Karachi Stock Exchange Weekly Analysis 21 April, 2012

The Karachi Stock Exchange (KSE) market has witnessed mixed movement during the week. KSE – 100 index has reached 13,936 points by gaining 137 points or 0.99 percent. Intraday volatility with relatively flat closings (barring Wednesday) remained order of the week as KSE‐100 index failed to conquer the psychological 14,000 mark. While the market did venture into the 14k territory on Friday, it failed to sustain and closed just below that mark.

However, intra-day volumes declined by 28% WoW basis averaging 269mn shares while average traded value declined by only 9% WoW to stand at USD82mn. Foreign investors poured in more money in Pak equities this week as net foreign inflows stood at USD8.14mn against net inflows of only USD2.3mn last week. There were few better developments on economic front for Mar-12, as current account stood in surplus of USD142mn and tax collection figure exceeded 9%YoY to Rs155bn (24% YoY during 9MFY12).

No concrete development on the newly proposed CGT regime. Any development on the much-awaited CGT SRO should be a positive while, on the flipside, a delay in the same may add weight to calls for a technical correction in the KSE-100 Index.

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

  • FBR plans to suggest 1% cut in corporate tax
  • US pledges US$110mn aid amid talks over NATO supplies
  • Foreign direct investment falls 48% in 9MFY12
  • Current account turns surplus in March‐2012
  • MCB declined on the back of SBP’s decision to raise the floor on saving accounts from 5% to 6% with the bank having a higher proportion of saving a/c deposits
  • The result season will be at its peak in next week where big banks (including BAFL, MCB, HBL, ABL & BAHL) are scheduled to announce results. Other than banks, prominent stocks i.e. POL, PSO, LOTPTA, NML and LUCK will also announce their results next week and should impact market direction
  • Current Account register surplus of USD142 million in Mar-12
  • Gov't raised Rs150bn through T-Bill, yields remain unchanged
  • Cement prices remain firm as ABAD calls off strike on price issue

Abbot Laboratories, EFOODS, Adamjee Insurance, Bestway Cement, Murree Brewery, LUC  and D.G. Khan Cement were the major gainers while Indus Dyeing, P.I.A.C. (A), MCB, Soneri Bank, Packages Limited and Fauji Fertilizer Bin Qasim were major losers last week.

The top-5 scrips at the futures counter holding 60% of the total open interest were ENGRO, DGKC, AHCL, NBP and FFC.

Experts and analysts are recommending an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (top picks in the energy chain). And among other liking also extends to FFC, FCCL, FFBL, INDU, NML, Lucky, DGKC, MCB and PTC.

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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