Karachi Stock Exchange Weekly Analysis 22 June, 2013

The Karachi Stock Exchange (KSE) benchmark was jittery as post budget excitement fizzles out. KSE – 100 index closed at 21,698 points by losing 807 points or -3.7 percent. While KSE – 30 index has reached on 16,838.19. Average volumes traded in the market plunged by 13%WoW to 322mn Shares.

The index recorded an unprecedented rally in the last one and a half months and climbed 3,910 points (21%) since the start of May and hit levels never witnessed before on its way to shattering the 22,000-point barrier. According to experts, the correction was bound to happen, and now the stock market’s stunning rally finally came to an end as it experienced a correction.

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

  • SBP did unveil its Monetary Policy Statement for the next two months on Friday (after market hours) where it cut the discount rate by 50bps to 9%
  • Banks earnings will get squeezed due to lower discount rate
  • Investors were seem to be confused on the imposition of GST, and remain cautious during last week because of uncertainty of upcoming monetary policy
  • PPL’s discovery at Gambat Block yielding 16.8mmcfd and 144bbl’s of oil and completion of Lalpir Power’s book building portion (over subscription of 6.0x) with a final strike price of PRs22/sh were the significant developments
  • Federal Board of Revenue clarified that 2% additional tax did not apply to petrol, diesel
  • The government had worked out a multi‐pronged strategy to tackle circular debt and clear PRs503bn of dues within two months to bring back 1,500MW into the system before commencement of Ramzan 
  • Pakistan is expected to get a $5 billion loan from the International Monetary Fund by the first week of Sep‐13
  • May 2013 current account deficit clocking in at US$356mn
  • Cumulative textile exports witnessed a growth of 5.3%YoY and 5.5%MoM to US$1.2bn in May. Resultantly, 11MFY13 exports amounted to US$11.9bn, up 6.0%YoY. The key reasons behind the steady growth were higher demand for yarn from China and higher exports to the European market following the preferential market access for 75 products 
  • Pakistan is losing out approximately PKR1.5bn by failing to exploit Japan’s mango market due to the non‐availability of a VHT plant
  • Urea prices are likely to be increased by PKR35 to PKR1,705/ 50 kgs bag due to changes in GST rate and collection mechanism
  • Cellular mobile companies have expanded their networks to every nook and corner of the country and after two years of relatively slow network growth, cellular industry has shown a growth of 8.4%. Mobile subscribers at the end of March 2013 were 121.13mn, as compared to 118.32mn 
  • IHC declared the amnesty scheme for smuggled vehicles illegal
  • PPL has announced a gas and condensate discovery over its exploration well Wafiq X‐1 located in District Sanghar, Sindh
  • Heavy selling in the index heavyweight oil and MCB shares also kept pressure on the index
  • Decline in coal prices and increase in cement bag prices kept investors interest alive in cement stocks
  • News flowof withdrawal of gas subsidy for fertiliser plants affected the sector stocks
  • A shutter-down strike was observed in Karachi on Thursday, causing a tentative trade loss of almost Rs2 billion due to closure of business and trading activities till 4pm

Top ten gainers of last week were: Pak Tobacco Co, Pakistan Cables, Clariant Pakistan, Netsol Technologie, Bank Of Khyber, GlaxoSmithKline Pak., Kohinoor Energy, Abbot Laboatories, Tri‐Pack Films and Grays Of Combridge.

Top ten losers of last week were: Pace (Pak), TRG Pakistan Ltd, IGI Insurance, JS Bank, Shell Pakistan, MCB Bank, Jah.Sidd. Co., Pakistan Telecommunication, Arif Habib Corp and National Refinery.

Top ten volume leaders were: FCCL, LPCL, BOP, TRG, BAFL, PTC, JSCL, DGKC, PSO and PACE

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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