Karachi Stock Exchange Weekly Analysis 26 May, 2013

The Karachi Stock Exchange (KSE) benchmark movement was bullish and keeps breaking records. KSE – 100 index closed at 21,283.77 points by gaining 746.74 points or 3.64 percent, while KSE-30 index has reached on 16,509.32 by gaining 588.04 or 3.69 percent. With average daily traded volume increasing by 29.4%WoW to a robust 439mn shares. According to analysts, investors interest in the KSE-100 Index next week to be driven by news flow regarding formation of the new cabinet.

So far the benchmark has registered a gain of approximately 26% on year to date basis with an average daily turnover of 219mn shares. The benchmark witnessed an exceptional bull-run from April’13 onwards primarily backed by election euphoria. The pre-election rally witnessed a gain of 10.4% or 1,873 points. It is interesting to note foreign investors invested nearly USD131.4mn in the same pre-election rally. In the post election rally benchmark added nearly 1,368 points or book nearly 6.87% return while foreign participants purchased USD148.5mn worth of stocks.

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

  • Chinese Prime Minister Li Keqiang’s assurance to support Pakistan in all sectors and hopes that the upcoming new government would resolve the circular debt issue propelled investors to take positions in stocks across-the-board
  • Strong FIPI inflows (US$117mn) were the key sentiment driver for the market this week, as KSE‐100 advanced 3.6%. Reasonable share of the inflow was due to tendering of Unilever Pakistan shares to the parent company by local investors
  • The release of PkR15bn by MoF for the purchase of FO to increase power generation in the country
  • Aid or deferred oil payment from a friendly state may also provide a breathing space to the upcoming government. In such a situation SBP would be in a position to slash the discount rate by 50bps to 100bps, which may boost the equity valuations
  • FBR has proposed 16% standard rate of sales tax on sugar in Budget FY14. FBR has estimated collection of PKR10bn through this major budgetary measure in case the proposal was accepted by the policymakers 
  • Indiana has cancelled subsidies for a planned USD1.8bn fertilizer plant in the state because of concerns that a Pakistani company involved in the project makes products used in improvised explosives
  • SNGPL‐based fertilizer plants will invest USD100mn for the development of the fields, which will ensure better gas supply to fertilizer plants to get better production from local plants instead of spending mns of dollars on costly imported urea
  • PSO efforts to setup a state‐of‐the‐art oil refinery in KPK with a capacity to process 40,000 barrels/ day, will go a long way in meeting the rising energy needs
  • Foreigners’ favourite heavyweights Oil and Gas Development Company (OGDC), Pakistan State Oil (PSO) and Pakistan Petroleum Ltd (PPL) remained in the limelight while Pakistan Oilfields Ltd, Engro Corp, Fauji Fertilizer Company and cement stocks also followed suit
  • Cement industry has started using alternative fuels to run their plants and share of such fuels in the sector’s energy‐mix has crossed the 20% mark. LPCL was planning to enhance the utilization of alternative fuel to 40% in 1‐year 
  • INDUS is all set to introduce hybrid vehicles in Pakistan during the 9MFY13. The company has already completed extensive test and trial for Prius Hybrid keeping in view the local conditions

Top ten gainers of last week were: Mari Petroleum, Pak Services, Pace (Pak), PICIC Growth, Sui South Gas, TPL Trakker Ltd, Faysal Bank, K.E.S.C., Lafarge Pakistan and P.S.O.

Top ten losers of last week were: Muree Brewery Co, Askari Bank, Colgate Palmolive, NIB Bank, Pak Tobacco Co, JS Bank, Clariant Pakistan, MCB Bank, IGI Insurance, and Jubilee General Insurance.

Top ten volume leaders were: FCCL, LPCL, LOTCHEM, PTC, PACE, KESC, TRG, ENGRO, JSCL, and BOP.

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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