Karachi Stock Exchange Weekly Analysis 15 March, 2013

The Karachi Stock Exchange (KSE) benchmark movement was bearish. Political and geo-political uncertainty was rife at the local bourse this week. KSE – 100 index closed at 17,665 points by losing 299.35 points or -1.67 percent, while KSE – 30 index closed at 14,172.17 points by losing -418.57 points. Market is likely to remain volatile in the upcoming days, while clarity over interim government may improve the investment climate.

Volumes shrank by 26 percent week on week to 174 million shares against 236 million shares last week. Security unrest in the city after Karachi blast, dismal cement sales for February 2013 and economic uncertainty impacted the sentiments despite easing gas shortfall issues in fertilizer sector and ECC approval for raise in refineries deemed duty to 9.0 percent. According to analysts, next week will remain crucial on caretaker setup announcement and the peaceful power transition.

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

  • The week opened on concerns that the Pak-Iran gas pipeline may result in US sanctions (resulting in a sharp one-day drop of -2.5%)
  • Iran and Pakistan formally inaugurated the construction of the Pak-Iran gas pipeline project
  • The Economic Coordination Committee (ECC) has rejected the plan to provide gas to Engro Corporation’s new fertiliser plant at concessionary rates. Fertilizers lost ground on uncertainty regarding the pricing of gas supply to Engro and resultantly the future of domestic urea prices
  • National Electric Power Regulatory Authority (Nepra) on Thursday approved increase in tariff by Rs 1.55 per unit under monthly fuel adjustment formula
  • The Pakistan Credit Rating Agency (Pacra) has upgraded the MCB Bank’s long‐term credit rating from AA+ to AAA, which defines the highest credit quality with lowest expectation of credit risk
  • The domestic gold prices have been falling after hitting a record on Feb 7, 2013, however market people and analysts said that people continued to buy yellow metal bars from the market considering it a worthy investment
  • Dissolution of assemblies is coming up with still no clarity on the shape of the upcoming interim government
  • A cloud of uncertainty hovered over the Telecom space, given the fate of ICH remains undecided
  • The auto sector posted unexciting Feb 2013 industry sales volumes (down 16%YoY and 1%MoM)
  • ICH news kept the investor away from PTC, while the impact on earnings seems negligible
  • FBR amended procedure for the legalization of non‐duty paid smuggled vehicles under the amnesty scheme
  • Aligned with its aggressive exploration programmed to optimize production and reserves replenishment of hydrocarbons, PPL won provisional grant of 11 strategically‐fit exploration blocks offered in the latest bidding round held on March 10. OGDCL and PPL are to start exploration and production activities in Sudan

Top gainers of last week were: Allied Rental Mod, Colgate Palmolive, TRG Pakistan Ltd, Meezan Bank, International Industries, EFU Life Assur Ltd., IGI Insurance, Lotte Pakistan, Attock Cement and United Bank.

Top losers of last week were: Sui South Gas, Habib Metro Bank, JS Growth Fund, Pace (Pak), Dawood Hercules Corp, Bank AL‐Habib, Indus Motor, Mari Petroleum, Pak Suzuki Motor and Azgard Nine

Top ten volume leaders were: ENGRO, PTC, JSCL, LOTPTA, FCCL, LPCL, NCPL, NIB, DGKC and TRG.

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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