Karachi Stock Exchange Weekly Analysis 10 June, 2013

The Karachi Stock Exchange (KSE) benchmark witnessed a bullish trend. KSE – 100 index closed at 22,358.96 points by gaining 535.91 points or 2.46 percent. While KSE – 30 index has reached on 17,421.87 by gaining 541.71 points or 3.21 percent.

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

  • Positive sentiment was once again driven by the smooth political transition as the week was marked by oath taking of the Prime Minister and induction of the new Federal Cabinet
  • LUCK’s plan to start construction of a cement plant in Congo next month
  • MARI is likely to add 22mmcfd
  • PPL’s acquisition of a new block in Karachi also prompted a positive sentiment
  • Key event of the week was the energy conference convened by the newly elected PM where expectations of hefty liquidity injection followed by structural reforms in the power sector continued to lure participants
  • Key upcoming events include the ‘Federal Budget FY14’ and the upcoming MPS where the low CPI reading for May’13 (5.13%YoY) could provide a basis for a rate cut
  • As per media reports, FBR has decided to rescind the SRO which offers zero-rated general sales tax (GST) facility on dairy products in or before the upcoming FY14 Federal Budget. Potential withdrawal of GST exemption carries huge importance for companies like Engro Foods (EFOODS), where greater than 90% of the company’s revenue is generated from zero rated segment. 
  • On the macro front, inflation figures were released for May 2013, where CPI clocked in at 5.1% i.e. a 9 year low
  • Cement sales figures released for May showing a decline of 1%YoY and 8%MoM
  • National Electric Power Regulatory Authority (NEPRA) approved upfront tariff for coal based power plants
  • Budgetary proposal to tax inter-corporate dividend at 35%
  • The market strongly supported by foreign inflows clocking in at US$ 29 million
  • OGRA announced an increase in petrol price while reducing High Speed Diesel (HSD) price
  • The World Bank (WB) approved a US$100 million loan to finance reforms in the health sector of Punjab
  • Media reports suggested that the FBR proposed to the govt to raise tax rate on inter‐company dividends from the current level of 10% to the normal corporate income tax rate of 35% in the upcoming FY14 budget 
  • With the recent announcement of stopping the gas supply to SNGPL based urea plants, ENGRO, DAWH and AGTL came under selling pressure
  • TCP awarded tender for 50k tons of urea imports
  • The banking stock came into limelight with MCB outpacing the benchmark as well as its pears. HBL and ABL also performed exceptionally well despite NIM attrition issues
  • FBR has proposed enhancement in the sales tax rate from 16 to 20% on supply of electricity and natural gas to all industrial and commercial consumers to encourage voluntary registration and documentation
  • The proposed 5% WHT on purchase of new motor cars and jeeps would not be applicable to Federal Government, Provincial Governments, local Governments and foreign diplomats

Top ten gainers of last week were: GlaxoSmithKline Pak., MCB Bank, Netsol Technologie, Pace (Pak), Abbot Laboatories, International Industries, Fatima Fert.Co., Lotte Chemical Pakistan, Stand.Chart.Bank and Habib Bank.

Top ten losers of last week were: Mari Petroleum, NIB Bank, Bankislami Pakistan, EFU Life Assur Ltd., Pak Services, Nestle Pakistan, Hum Network, EFU General Insurance, JS Bank and Dawood Hercules Corp.

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

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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