Karachi Stock Exchange Weekly Analysis 1 July, 2012

The Karachi Stock Exchange (KSE) market has witnessed a bullish trend because of appointment of new Prime Minister of Pakistan and on the hopes of improving Pak – US relations over NATO supply. KSE – 100 index has reached 13,801.41 points by gaining 70.59 points or 0.5 percent. While KSE 30-share Index enhanced by 55.59 points, or 0.46 percent, during the week and closed at 11,922.13 points.  According to experts, the market may face profit-selling next week in the absence of investment-attracting news.

In the outgoing week, the average daily turnover recorded at 69 million shares against 67 million shares in the previous week. Market capitalisation, however, increased by Rs14 billion to Rs3,518 billion and foreigners sold net shares worth $5.6 million.

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

  • Investors have gain confidence regarding political uncertainty on appointment of new Prime Minister of Pakistan and improving Pak – US relations over NATO supply
  • CCP (Competition Commission of Pakistan) has issued show cause notice to Fertilizer companies, because of increasing unreasonable urea prices. And as a result Fertilizer companies are underperformed during the week
  • PSO (Pakistan State Oil) has started additional supply of furnace oil to generate 1200 megawatts of electricity
  • Indus Motors and Honda are raising car prices to compensate for Euro II compliance. And they were also underperformed the market
  • Earning announcement season is getting started from 15th of July, Fertilizer and Cement stocks are expected to show positive results
  • Investors, however, may opt for buying oil and fertilizer stocks ahead of the beginning of earnings announcement season for the quarter ended on June 30
  • Provisional revenue collection crosses PRs1,800 billion
  • ENGRO has claimed the damage of Rs. 28.85 billion from SNGPL
  • Prices of oil and gas have been reduced by the government of Pakistan
  • Export of Cement has increased by 7.73%
  • ADB set to approve USD200 million tranche in November, while US seeks USD1.1 billion for Pakistan under Kerry Lugar bill
  • KESC receives PKR 5.46 billion against right issue of shares

K.E.S.C., Feroze1888, Rafhan Maize, Colgate Palmolive, HBL, APL, MCB, OGDC, KAPCO, Bata (Pak) Ltd, Abbot Laboratories, UBL, POL, Bank Al Falah, LUCKY cement, NRL, PPL and E.F.U. Life Assurance were the major gainers while Media Times Limited, Standard Chartered Bank, TRG Pakistan, Dawood Corporation, ENGRO Foods Ltd, Lotte Pakistan PTA, Pakistan Cables, Grays of Cambridge and Jahangir Siddiqui & Co were major losers in the benchmark KSE-100 this week.

Top volume leaders of last week were DAWH, JDWS, EFOODS, BAFL, FFC, PTC, KESC, SNBL, FATIMA, and HUBC.

From an investment perspective, we see value in accumulation of fundamentally strong names such as PPL, APL, PSO, OGDC, POL, Hubco and NCPL in the energy sector, and MCB among banks. Other than this, Fatima Fertilizer and EFoods also warrant closer attention given sound business profiles and attractive upsides.

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

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