Karachi Stock Exchange Weekly Analysis 4 August, 2012

The Karachi Stock Exchange (KSE) market has witnessed positive movement and activities. KSE – 100 index has reached 14,676 points by gaining 150 points or 1.0 percent.

Increase in market activity can be vindicated by 47.6 %WoW rise in volumes to 83mn shares. Foreign interest was intact as foreigners were net buyers of US$ 3.0 million.

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

  • Lucky Cement’s successful bid for acquisition of ICI Pakistan. Lucky Cement & Tabba group acquired ICI Pakistan at US$ 152.5 million
  • Signing of MoU between Pakistan and US on NATO supplies and subsequent release of US$ 1.12 billion under CSF
  • Following receipt of coalition support funds worth US$ 1.118 billion on 2nd Aug as confirmed by the SBP spokesperson, FX reserves have increased to US$ 15.69 billion
  • Inflation for the month of Jul, 2012 arrived at 9.6%, which was below market consensus and lowest in 31 months
  • The State Bank of Pakistan is due to announce its next monetary policy review for Aug‐Sep 2012 on Aug 10th
  • OGRA hiked POL, CNG prices. price of petrol was raised by PRs 7.67/litre to PRs93.79, high speed diesel by PRs 4.58 to PRs101.79/litre, kerosene by PRs 4.64/litre to PRs92.83/litre and HOBC by PRs7.64/litre to PRs120.16
  • July provisional tax collection stood at PRs 111 billion
  • We also flag political noise would grow louder as the apex court, late on Friday, struck down the controversial Contempt of Court Bill which should add a new layer of uncertainty in the govt‐judiciary tussle
  • Nice results from PPL (on 8th Aug) and other companies are expected on upcoming days
  • Pulses import hits US$ 433.436 million mark in fiscal year 2012
  • Moody's announcement to downgrade Pakistan's foreign and local currency bond ratings to the lowest level since June 1999 and negative outlook has further deepened investors' concerns about the country's already fragile economy, leading economists here believe
  • The cement export from the country recorded at USD498.909mn during the period under review as against the corresponding period of last year’s export of US$ 457.448 million
  • PSO and KPC finalised oil infrastructure joint venture project at a cost of US$ 350 million at Hub to enhance oil storage in the country
  • Local industry appeals for ban on car imports
  • PSO plans to acquire stake in UAE-based refinery

Siemens Engineering, Bestway Cement, Security Paper Limited, Colgate Palmolive, ABBOT, THALL, MUREB, Shifa Int. Hospitals, SNGPL, ICI, Media Times, GLAXO, KESC, DGKC, PCAL, NIB and Unilever Pakistan Ltd. were the major gainers. While Engro Corporation, P.I.A.C. (A), GHGL, JSCL, PSMC, Pak Services, Lotte Pakistan PTA, KESC, PACE, FFBL, MDTL, EPCL, TRIPF, GRAYS, Dawood Corporation, BYCO Petroleum and PMPK were major losers in the benchmark KSE-100 this week.

Top five average daily turnover for the week: DGKC, MLCF, BAFL, FCCL, and JSCL.

Top 10 volume leaders for the week: DAWH, BAFL, FATIMA, JGICL, AHCL, LUCK, NBP, EPCL, FFBL, and HUBC.

We see a window of opportunity in the market and recommend investors to build positions in names such as PPL, APL, PSO, OGDC, POL, Hubco and NCPL in the energy sector. Among banks MCB is our preferred play while Fatima Fertilizer and Lucky Cement also warrant a closer look given favorable operating dynamics and upside potential.

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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