Karachi Stock Exchange Weekly Analysis 23 March, 2013

The Karachi Stock Exchange (KSE) benchmark movement was bullish and Swiftly recouping early week losses. As the general election date was announced, leading to the market gaining on a weekly basis.. KSE – 100 index closed at 1 7,963.12 points by gaining 298.29 points or 1.69 percent, while KSE – 30 index closed at 14,257.72 points by losing 85.55 points or 0.60 percent. Better expectations for March quarter also helped the index to recover its early week’s loss. Volumes also witnessed a similar trend, with average daily volumes increasing by 7.1%WoW to clock in at 186 million shares.

According to analysts, investors have to remain cautious in the near term given political ambiguity ahead of announcement of the caretaker government setup. Robust estimated cement dispatches numbers and anticipated clarity on the International Clearing House (ICH) should also drive investor sentiment next week. On the macroeconomic front, falling foreign exchange reserve levels amid a worsening BoP may continue to exert pressure on the PkR.

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

  • Election comission has decided Caretaker Prime Minister Justice (retd) Mir Hazar Khan Khoso
  • Leading political parties were unable to decide the interim prime minister while on the other hand election commission has finalized the date for the general elections
  • Over the weekend the political warfare is likely to increase with PTI gathering scheduled on March 23, 2013 whereas Ex‐President Mr. Pervaiz Musharraf is also scheduled to arrive on March 24, 2013
  • The positive movement of market was driven primarily by selective textile, fertilizer and cement stocks amid a recovery in the banking sector
  • Robust FPI inflow at US$9.3mn further assisted sentiments
  • FBR reportedly provisionally collected PRs1,199bn during Jul ‐ Mar 14th 2012‐13, reflecting an increase of 5.1% YoY
  • The KSE-100 Index shed a sizable 172 points on Monday as the banking sector plunged on SBP’s decision for banks to pay interest on savings deposits on average monthly balances
  • Fatima Fertilizer loses upto -7% WOW on future payout concerns
  • Cotton production fell 12% YOY
  • Almost all banks are losing because of reduced profitability expectations due to a likely uptick in effective interest rate (minimum profit rate of 6% per annum) on saving deposits. Banking spread is likely to shrink further backed by the recent SBP decision; hence the interest toward banking stocks seems limited
  • Latest data revealed that foreign exchange reserves dropped by US$129mn to US$12.4bn in the week ended March 15th
  • The fertilizer sector is expected to continue to be in the limelight as news flow regarding gas cost to ENGRO come through
  • OGDCL has added 35mn (mmcfd) gas per day into the system from Qadirpur Gas Field
  • Byco’s newly‐completed 120k bpd oil refinery, largest in the country, successfully completed its 72‐hour continuous performance test run at 60% of its capacity over the weekend
  • The Mansha Group stocks from cement, textile and banking sectors that kept the sentiments and gains intact, were soon followed by various main board stocks, triggering an across-the-board short covering during the week
  • Foreigners also actively participated in the market and were net buyers of $9.3 million worth of equity, up $4 million on the previous week

Top Gainers last week were: Nishat Chunian, Nishat Mills, Pak Services, TRG Pakistan Ltd, D. G. Khan Cement, Attock Cement, Hum Network, Engro Corporation, K.E.S.C., and Pace (Pak).

Top Loers last week were: Bank Al‐Falah, National Bank Of Pakistan, Clariant Pakistan, IGI Insurance, Bankislami Pakistan, Stand.Chart.Bank, Colgate Palmolive, Fatima Fert.Co., Grays Of Combridge, and United Bank.

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

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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