Karachi Stock Exchange Weekly Analysis 10 February, 2013

The Karachi Stock Exchange (KSE) benchmark witnessed yet another bullish week to march towards new historic levels led by telecom, exploration and production and food sector. While State Bank of Pakistan kept discount rate at 9.50 percent, in line with market expectations. Trading picked up this week, driven by better results and payouts, with average daily volumes clocking in at 262mn shares (+21%WoW). KSE – 100 index closed at 17,477.94 points by gaining 211.71 points or 1.23 percent, while KSE – 30 index has reached on 14,251.15 by gaining of 144.49 points or 1.02 percent. The weekly turnover rose 89.18 percent and traded 269.36 million shares as compared to previous week’s 142.38 million shares.

According to analysts, The market will continue to be driven by results next week. In this regard, major results next week include DGKC, HBL, PTC and ABL. The telecom sector is expected to remain under the limelight next week. With the result season in full swing, political noise will likely remain in the background although BoP concerns could also come into play as Pakistan is due to repay US$530mn to IMF this month. Some telecom-related shares like TeleCard and WorldCall were in the limelight, while Pakistan Telecommunication Company Ltd with decent volume saw profit-taking after rallying for a couple of sessions.

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

  • SBP (State Bank of Pakistan) also released the Monetary policy Statement (MPS), maintaining the discount rate at 9.5%, while the interest rate corridor was reduced by 50bps to 250 bps
  • SBP has also decided to grant a microfinance license to U Microfinance Bank Ltd. (owned by PTC)
  • Key results this week included PPL, MCB and EPCL
  • Next week is laden result announcement of blue chip stocks including HBL, ABL, DGKC, ENGRO, PTC and NCPL
  • Off-take figures for cement with Jan’13 sales rising by 10%YoY
  • Moody’s has stated on Pakistan, that it has maintained the country’s rating at Caa1 while have highlighted event risk (politics and BoP concerns) as the key risk going forward
  • The Federal Board of Revenue has sent a summary of new taxation measures to the Ministry of Finance for approval which aims to raise revenue from Rs50 billion to Rs60 billion in the next few months
  • Pakistan’s foreign exchange reserves declined by $75 million to $13.474 billion during the week ended February 1, according to the central bank on Thursday
  • Retail participation in telecom and cement plays also boosted investor participation as daily volumes averaged 292mn shares (35%) during the week
  • FBR has missed revenue collection targets of sales tax, federal excise duty and direct taxes during 2011‐12, as achievement of assigned targets remained 95 percent (sales tax), 87.1% (FED) and 98.2% (direct taxes)
  • OGRA has increased gas tariff for the consumers of SSGC by PKR9.66/mmbtu, while it reduced gas tariff by PKR7.91/mmbtu for consumers of SNGPL
  • Gas supply to textile mills in Punjab resumed on for two days in the region of Lahore I & II, followed by supply to the mills in Faisalabad and Multan region on coming Monday and Tuesday
  • Askari Bank remained in the limelight after Fauji Group announced that they would take over the bank at a substantial premium to the market price

TRG Pakistan Ltd, Pace (Pak) Ltd., Engro Foods Ltd, Jah.Sidd. Co., Stand.Chart.Bank, Sui North Gas Pipe., P.T.C.L.A, JS Bank Ltd, Azgard Nine and Bata (Pak) Ltd. were the major gainers while Pak Tobacco Co., Pakistan Cables, Pak.Int.Con, ICI Pakistan, Nestle Pakistan, International Steels Ltd, Netsol Technologies, Grays Of Combridge, Fauji Cement Company and Millat Tractors were major losers in the benchmark KSE-100 this week.

Top ten volume leaders were: TRG, PTC, JSCL, LOTPTA, PACE, FCCL, KESC, AKBL, ENGRO, and SNGP.

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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