Karachi Stock Exchange Weekly Analysis 5 May, 2013

The Karachi Stock Exchange (KSE) benchmark movement was bullish and the pre‐election rally continued to drive index forward. Strong corporate earnings, IMF’s offer for $5 billion facility to Pakistan and Early resolution of CCP’s levy on fertilizer, telecom sectors saw the benchmark KSE-100 index smash past the 19,000-point barrier to close at 19,226 points during the week ended May 3. The Karachi stock market witnessed a healthy trading month in April 2013 against March 2013 as a gain of 780 points took place during the period. KSE – 100 index closed at 19,226.63 points by gaining 309 points or 1.6 percent. While KSE – 30 index closed at 14,797.72 by increment of 213.54 points or 1.46%.

Average trading volumes dropped 15.9% to 159 million shares per day and average daily value also fell 15.5% to Rs4.90 billion. The market capitalisation of the KSE rose 2.2% to Rs4.75 trillion by the end of the week. According to analysts, correction is expected and might witness selling in the midst of post-result period, in next week. With general elections just a week away, law & order situation in the country can be a trigger for index volatility. We believe successful elections to send a positive signal to the investors, leading to higher volumes, going forward.

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

  • International Monetary Fund’s (IMF) offer for $5 billion facility to Pakistan for balance of payment support and debt repayment
  • The law and order situation in the country deteriorated during the week as attacks on political parties continued ahead of general elections on May 11
  • Strong corporate earnings and surprisingly low inflation numbers helped to improve investor sentiment
  • Lucky Cement, the largest cement manufacturer in the country, announced a 49% growth in year-on-year income for nine months of fiscal year 2013. The company reported earnings per share of Rs21.59, which were above market expectations
  • MCB Bank, one of the largest banks in the country, announced EPS of Rs5.70 for the first quarter of 2013 and paid out a dividend of Rs3.50 per share for the period
  • The recovery of the fertiliser sector came into the limelight with Fauji Fertilizer Bin Qasim reporting EPS of Rs0.53 for the first quarter of 2013, after posting a loss in the same period last year. According to the National Fertilizer Development Centre (NFDC), sales of DAP (the company’s main product) grew 83% in the first quarter of 2013
  • Fauji Fertilizer, MCB, Lucky and PPL remained in limelight after healthy result announcements, while National Bank Pakistan and Engro Corp saw selling pressure during the week
  • PPL giving up on its plan to acquire assets of Tullow Oil
  • The stock market was also aided by the Consumer Price Index (CPI) data released by the Pakistan Bureau of Statistics. CPI for April stood at 5.8%, allaying investor fears that the discount rate will be increased in the future due to rising inflation
  • There was bad news for the telecom sector as the Competition Commission of Pakistan (CCP) gave a detailed ruling on the International Clearing House (ICH), in which it scrapped the controversial setup and imposed heavy penalties on the Long Distance International (LDI) operators in the country
  • Pakistan Telecommunication Company Limited, Worldcall Telecom and Telecard Limited will have to pay penalty of Rs8.3 billion, Rs534 million and Rs189 million as per the ruling. All telecom stocks took a severe beating during the week
  • Analysts said foreign fund buying was witnessed in energy and other blue-chip stocks, as they diverted their investment from Unilever Pakistan after its buyback from the stock exchanges in the country
  • Renewed buying interest in Pakistan State Oil, MCB and Pakistan Petroleum Limited was also seen
  • FG has appointed Tahir Mahmood as acting chairman of SECP
  • FG will pay approximately PKR14,500 per ton subsidy on imported urea to match the domestic price, as it has already decided to supply urea at lower price to facilitate farmers
  • The overall sales volume of medicines in the country swelled to PKR192.9bn in’12 from PKR123bn in 2009, with the pharmaceutical industry growing at a cumulative annual growth rate of 16.12% during

Top ten gainers of last week were: Pak Tobacco Co, Pak.Int.Con, Rafhan Maize Prod, TPL Trakker Ltd, Hum Network, Soneri Bank, Clariant Pakistan, Netsol Technologie, Pak Suzuki Motor and National Foods.

Top ten losers of last week were: TRG Pakistan Ltd, Jah.Sidd. Co., National Bank Of Pakistan, Muree Brewery Co, Pakistan Telecommunication, B.O.Punjab, Bankislami Pakistan, K.E.S.C., Engro Corporation and Pakistan Cables.

Top ten volume leaders were: FCCL, TRG, PTC, LOTCHEM, ENGRO, SNBL, BOP, DAWH, JSCL and NBP.

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


  1. The CCP is ruling has still got a dark shadow upon it as the appointments of key members of the commission was challenged in the Islamabad High Court. Until the case has been heard, we cannot form a clear judgement on whether there will be permanent adverse affects on the market. Moreover, there were in total 14 LDI`s and all of them have been fined, I do not know why only 3 or 4 have been named and others left out in this article?

  2. What about the remaining LDI`s, who is going to name them? I think it is really unfair if you only name few and leave out the rest. Moreover, I think the affect on the market from the CCP news can not be long lasting as these factors are permanent in nature.