Karachi Stock Exchange Weekly Analysis 22 September, 2012

The Karachi Stock Exchange (KSE) market movement was volatile. KSE – 100 index has reached 15,453 points almost unchanged from previous week. While the KSE 30-share index has reached on 13,024.57 points by losing of 49 points or 0.37 percent.

Profit taking at the higher levels kept the upside capped and the index closed flat while avg. volumes declined to 129mn shares/day. Foreign investors injected US$ 3.9 million during the week.

According to experts, the Karachi Stock Exchange’s (KSE) 100-index touched the all-time high of 15,676 points next week, brushing aside the changes of a fall in the index due to rollover pressure. A significant decline in the interest rates regime, particularly in the Pakistan Investment Bonds (PIBs) and Treasury Bills in recent times, would keep invest tracking-in at the KSE next week.

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

  • Political noise has tapered off slightly but could come to the fore on 25 Sep, 2012. Supreme Court hearing to review progress on Swiss cases issue
  • In the light of recent inflation numbers and sighting expected inflation to remain in single digit may influence SBP to further cut the discount rate in upcoming MPS by 50bps to 75bps which may fuel the bull with utmost energy to reach new levels
  • Hefty cash payouts by Attock group companies kept excitement levels high sporadically
  • Signing of MoU (Memorandum of Understanding) between DAWH and Pakarab Fertilizer with the former signaling its intention to divest its entire shareholding in DH Fertilizer Limited to Pakarab. As per the notification issued by Dawood Corporation (DAWH), the group intends to sell its entire holding of Dawood Fertilizer (DFL) of 100 million shares
  • ENI’s discovery in Badhra B North-1 exploratory well where OGDC has a 20% stake
  • PkR10/bag-PkR15/bag reduction in cement prices in the North
  • Expectations over pending results for NML and NCL may lead to volumes in these scrips while release of Fertilizer offtake numbers may generate some activity in Fertilizer sector scrips
  • Banks have underperformed the KSE-100 Index by 6% since Aug 10’12 when the Discount Rate was cut by 150bps to 10.5%
  • The government increased the prices of petrol by PRs6.82/litre to PRs106.7 and of CNG by PRs6.32/kg to PRs97.7 in its latest weekly price revision effective September 17. And it is expected to increase the petrol prices further in next week
  • Urea producers also underwent a test of pricing power as FFC reduced urea and DAP prices by PRs10/bag and PRs100/bag respectively to partially pass on the impact of reduction in cess on fuel gas and to expedite the clearance of inventories
  • US announced a multi‐year Pakistan Private Investment Initiative worth US$ 80 million in financial support to promote economic activities in the country
  • Floods caused by hill torrents this month swept across 300,000 cotton acres in DG Khan, Rajanpur and Rojhan areas
  • GoP officials showed that crops sown nearly 2mn acres had been destroyed or damaged. According to Agriculture experts, floods have caused damages worth PRS 250 billion
  • FBR has levied 0.5% capital gains tax on transfer of all plots sold by individuals or estate agents during the last two years
  • 9th generation Civic was introduced with enhanced aerodynamics, elegant simplicity of exterior design and enriched ergonomically designed sophisticated interior. It brings with it an armory of innovative features
  • Al‐Qarnain Group of Saudi Arabia is planning to invest US$ 1 billion in the areas of energy, construction, hospitality and automobiles in Pakistan over the medium term

IGI Insurance, Packages Limited, Dawood Corp, Pak Cables, PSMC, FATIMA, AGTL, EFOODS, Mari Gas, Pak Reinsurance, SILKBANK, NIB Bank, and NIB Bank were the major gainers while Grays Of Cambridge, Media Times Limited, K.E.S.C., Abbot Laboratories, LUCK, ABL, DGKC, NML, INDU, Millat Tractors, Fauji Cement, P.I.A.C.(A), and Pace (Pak) Ltd were major losers in the benchmark KSE-100 this week.

Top ten volume leaders were: NCPL, PACE, KAPCO, FCCL, FATIMA, JDWS, EFOODS, ENGRO, FFBL, DAWH.

Thank you very much for reading this article.

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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