Karachi Stock Exchange Weekly Analysis 18 November, 2012

The Karachi Stock Exchange (KSE) market has faced the technical correction and moved to a consolidated mode as FPIs lose winning streak. KSE – 100 index closed at 16,197.74 points by losing 45.53 points or 0.28 percent, while KSE – 30 index closed at 13,184.09 points by losing 147.32 points or 1.10 percent. This decline reflects the conservative stance taken by investors due to the volatile law and order situation in Karachi, as well as some profit taking.

Average daily volumes improved to 170 million shares, up 0.3%WoW. Foreign interest also declined this week, as foreigners were net sellers of US$ 0.6 million in the market. On the macro front, remittances in October stood at a record US$ 1.37 billion.

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

  • According to analysts, the factors that contributed to the weekly decline were foreign selling in blue chips, economic worries despite record remittances last month and security unrest in the city
  • various court cases especially dual office case and the hearing against extension of Chief of Army Staff would remain in limelight in the coming weeks
  • The textile sector remained in the limelight this week, due to EU Trade Package going into effect from November 15. Textile stocks would attract extended buying after spinning mills continued to export significant amount of yarn to China
  • Cement sector stocks were also amongst the top volume leaders due to varying news pertaining to reduction and then recovery in retail cement prices. Besides, decline in coal prices in the international markets would keep the profits of cement manufactures on the higher side
  • Auto sales figures released during the week for October recorded a decline of 38%YoY and 3%MoM
  • The Fertilizer sector may come in the limelight next week with weak sales leading to speculation of a potential urea price cut
  • Pakistan paid back installments of two loans worth a cumulative US$ 173.2 million (US$ 146.9 million under SBA and US$ 26.3 million on account of previous loans to the IMF)
  • According to SBP data, workers’ remittances touched record high in Oct‐12, increasing by 20% MoM/34% YoY to US$ 1.36 billion
  • The demand from one of the coalition partners to impose emergency in Karachi on poor law and order shattered investor confidence during the earlier part of the week
  • Newsflow on gas supply for SNGPL‐based fertilizer firms remained negative, with Dawood Hercules announcing disconnection of gas supply on early winter load‐shedding and no concrete progress on short term gas supply plan (DAWH ‐6.4%, ENGRO ‐5.4%)
  • Government of Pakistan has released PKR 15 billion to PSO on account of liabilities against power sector including clearing LC. The cash strapped company owes PKR 31.9 billion to local and PKR 87.27 billion to KPC
  • Citibank officially announced that it had entered into an agreement with HBL to sell its Credit Card and Consumer Lending portfolio in Pakistan

Pak. Int. Cont. Ter. Ltd., Kohinoor Energy, Azgard Nine, Jahangir Siddiqui & Co, IGI Insurance, Tri-Pak Films Ltd., Grays of Cambridge, J.D.W. Sugar, Soneri Bank and Shifa Int Hospitals Ltd were the major gainers while Attock Cement, TPL Trakker Ltd, Dawood Hercules, Engro Corporation, Ghani Glass, FFBL, Allied Rental Mod, Packages Ltd., SNGP, and K.E.S.C. were major losers in the benchmark KSE-100 this week.

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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