Karachi Stock Exchange Weekly Analysis 12 January, 2013

The Karachi Stock Exchange (KSE) market sentiments were weak, because political uncertainty weighed heavily on investor’s minds. KSE – 100 index closed at 16,634.71 points by losing 14 points or 0.1 percent, while KSE – 30 index has reached on 13,598.03 by increment of 8.39 or 0.06 percent. Volumes declined by 35 percent on week-on-week basis to 96 million shares against 148 million shares last week. Foreigners remained interested towards cheap stocks and were net buyers of $8.5 million this week in the market.

Higher home remittances, positive talks with the International Monetary Fund (IMF) on macroeconomic assessment, government’s assurance for timely elections in the country and hopes for easing political uncertainty affected the sentiment. Rising cement sales data, expectations for stronger earning announcements in the blue-chip stocks and higher global commodities played a catalyst role in the bullish sentiment at the KSE, despite concerns over the circular debt in the energy sector and lower car sales data.

According to experts, Next week will be shaky until long march scene is over. Apart from political situation, other factors are positive and foreign investment is also coming in the market. Analysts said that traders preferred to remain to the sidelines during most trading days of the week watching the uncertain political developments and economic concerns in the country.

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

  • The topsy‐turvy behavior of politics dictated the market moves nonetheless despite heightened security concerns and upcoming long march
  • Muttahida Qaumi Movement’s (MQM) decision not to become part of the long march also has a positive impact on the market
  • Foreign investors remained upbeat and poured in US$ 8.4 million
  • Cement stocks remained in the limelight in anticipation of better results
  • Government of Pakistan has directed the authorities concerned to work out a plan for restoration of gas supply to the four fertilizer plants on SNGPL network. The four fertilizer plants on SNGPL network including Pakarab, DHCL, Enven and Agritech have suffered more than any other industry due to chaotic gas situation since Dec, 2011
  • SBP has finally allowed the Fauji Foundation to acquire majority shares of the AKBL (Askari Bank)
  • PPL in collaboration with ENI is set to start for the first time drilling of exploratory well in Sindh’s deep sea, 200 nautical miles from Arabia. PPL has acquired exploration rights in a block located 100km from Baghdad, Iraq for oil exploration and hoped that it will be a potential block, which will result in oil discovery 
  • Engro raised urea prices by PRs20 per bag to PRs1670 per bag
  • NML announced to offload 15% of its holdings in Lalpir Power Limited through OFS
  • Zong mulling to acquire defunct LDI license of Callmate Telips
  • FFBL announcing its annual results, posting EPS of PRs4.64, down by 60% YoY, accompanied by a dividend of PRs2.25 per share
  • Foreign exchange reserves fell by US$249.3mn to US$13.56bn for the week ending January 4, 2013, on account of debt repayment to the IMF. Reserves held by the SBP decreased to U$8.77bn, down by US$239.7mn. Similarly, reserves held by the commercial banks dipped by US$9.6mn to US$4.79bn.
  • Results season has also started but it would take some time to affect the market
  • Next week will evolve around the long march and negotiations with the International Monetary Fund (IMF)
  • Change in management of Askari Bank brought investors’ interest towards the scrip while Nishat Chunian remained active after the company announced its restructuring process
  • Cements and Textiles are particularly expected to report healthy profits where the two sectors are again likely to be in the limelight in the coming days

Fauji Cement, Askari Bank, Pakistan Tobacco Co, Agriauto Ind, Ghani Glass, UBL, Pakistan Cables, Millat Tractors, Sui South Gas, and Bank Al-Falah were the major gainers while Grays of Cambridge, J.D.W Sugar, Abbot Laboratories, Attock Cement, National Foods, KESC, BankIslami Pakistan, Soneri Bank, Attock Refinery Ltd., and JS Bank Ltd. were major losers in the benchmark KSE-100 this week.

Top ten volume leaders were: FCCL, JSCL, AKBL, PTC, FFBL, NCL, DGKC, TRG, LUCK, and EFOODS.

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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