Karachi Stock Exchange Weekly Analysis 9 June, 2012

The Karachi Stock Exchange (KSE) market was bearish. KSE – 100 index has reached 13,559 points by losing 317 points or 2.3 percent.

Average volumes also reflected the limited interest in the market as they plunged by 32%WoW to 95mn shares. Foreigners too were downbeat as they sold shares worth US$16.8 million.

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

  • State Bank of Pakistan (SBP) has adopted to keep the discount rate unchanged (12 %), as per expected
  • Despite the positive budget, investors were remain cautious
  • Investors especially the foreigners, have some serious concerns regarding US and Pakistan tension on the issue of reopening NATO supplies
  • Investors are also concerned over exclusion of decrease in gross turnover tax rate from 1% to 0.5% in the Finance Bill 2012, increase in GIDC on the fertilizer sector, lower than earlier expected decrease in FED for cement sector, and increase in tax rates for banks on dividend income earned through money market/income funds
  • Pakistani Rupee is continuously depreciating as compare to US$
  • Weakness in oil prices have also witnessed, which caused POL to underperformed the market by 1.6%
  • SNGPL has notified to resume the gas supply to ENGRO by 10 June, 2012
  • NRL cuts base oil prices by PRs 7.15 per litre
  • Cement Sales were up 10% YoY during the month of May, taking 11MFY12 numbers to 21.7mn tons, up 9% YoY
  • Government has raised PRs35.7bn through PIB auction

Grays Of Cambridge, ENGRO, Rafhan Maize, Bata (Pakistan), Nestle Pakistan Limited, Jahangir Siddiqui, Azgard Nine Limited, Pakistan Services Limited, Meezan Bank, Philip Morris (Pakistan) Limited, Kohinoor Energy Limited, Murree Brewery Company Limited,  and IGI Insurance were the major gainers while Media Times Limited, Agritech Limited, BYCO Petroleum, P.I.A.C. (A), Ibrahim Fibre Limited, ENGRO Foods,Pak Electron Limited, Pakistan Telecommunication, Gharibwal Cement Limited,  NBP, DGKC and Pace (Pak) Ltd were major losers in the benchmark KSE-100 this week.

A cherry picking approach is suitable in the current environment and we advise an accumulation stance on PPL, APL, PSO, OGDC, POL, Hubco and NCPL (our top picks in the energy chain). In the banking space, MCB is our preferred play while EFoods also warrants a closer look. Among fertilizers, Fatima emerges as our top pick owing to its shield from sector gas supply woes and fixed input costs.

NOTE: The information posted in this blog (forum) is based on current affairs & investors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram

1 comment:

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