Karachi Stock Exchange Weekly Analysis 29 April, 2012

The Karachi Stock Exchange (KSE) market has witnessed mixed movement during the week. KSE – 100 index has reached 14,042.77 points by gaining 106 points or 0.76 percent. KSE has finally breached the psychological level of 14,000 points. Average volumes during the week declined by 4% WoW to 256 million shares, however, whereas average traded value increased by a healthy 15% WoW to stand at US$95 million.

Despite intra‐day attempts, the market failed to rally higher and ended up with a soft 0.8% gain. Significantly though, it managed to hold its ground above the 14k level. Volumes receded slightly to 257mn shares/day while values traded were up 11% to US$80mn/day.

With result season approaching its end (remaining results include those for AICL, FATIMA and NCL. The market is likely to focus on the fine points of the recent Presidential Ordinance alongside developments on the political and macro fronts. Regarding the latter, Mar’12 inflation data will be released next week (CPI likely to clock in north of 11%) while budget-related news flow continues to come in thick and fast. Considering the cement sector has been in the limelight of late, release of cement dispatches data next week could prove to be an important checkpoint.

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

  • The eagerly anticipated CGT Presidential Ordinance was finally unveiled, easing investor jitters over the timing and possible changes in regulations
  • Politics was the second dominant theme this week where the PM was convicted of contempt charges by the apex court and was handed a symbolic sentence
  • SECP (Securities Exchange Commission of Pakistan) approves rules for Index Option contracts, which would provide alternate trading mechanism to traders
  • Fertilizer sector witnessed relatively better offtake numbers for the month of Mar-12 as urea and DAP segments witnessed MoM growth of 65% and 294%, respectively
  • For the broader market, the week was a busy one, with corporate results pouring in and influencing stock‐specific movements
  • Foreign investors were more aggressive this week as net inflows of US$12.8mn were recorded compared to net inflows of USD8.1mn last week (up 58%WoW)
  • WB (World Bank) has approved US$ 1.8 billion loan for the energy sector projects
  • Indefinite postponement of 3G license auction of USD630mn and low GDP figures of 3.2% during 9MFY12 against the target of 4% brought some negativity in the market
  • Mergers and Acquisitions in Banking sector to be re-initiated. Bank-al-Falah acquiring IGI Investment Bank and Fauji Foundation getting the approval by SBP for due diligence for Askari Bank Limited
  • Nepra allowed Discos to raise tariff by Rs2.38/unit for Feb & Mar

Ghani Glass, Pakistan Tobacco Company, Unilever Pakistan Foods, Pak Suzuki Motors, EFOODs, FFBL, LPCL and Murree Brewery were the major gainers while K.E.S.C., Pakistan Reinsurance, E.F.U. General Insurance, Jahangir Siddiqui & Co, DGKC, NML and Agritech Limited were major losers last week.

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

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, FFBL, ENGRO, FCCL, 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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