Karachi Stock Exchange Weekly Analysis 13 July, 2013

The Karachi Stock Exchange (KSE) benchmark was bullish. Bulls consolidate their position as KSE closes at an all-time high. KSE – 100 index closed at 2 3,037.32 points by gaining 858.98 points or 3.87 percent. While KSE – 30 index has reached on 17,990.10 by gaining 846.04 points or 4.93 percent.

Average volumes in the market also improved this week to 263mn shares (+0.2%WoW). Average daily value, however, shot up by 30% to Rs12 billion per day reflecting higher interest in blue-chip stocks. The market capitalisation of the KSE rose 3.8% to Rs5.6 trillion by the end of the week. The volume shrinkage was largely on account of closure of trading in BOP right shares. With result season around the corner, corporate fundamentals and valuations should remain in the limelight in the weeks ahead even as activity slows down due to Ramzan. The market has risen by 9.7% in the last two weeks, and is now at its all-time high. We expect consolidation at these levels. The next trigger for the market would be results season, in which a number of companies, particularly in energy and power, are expected to announce high payouts.

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

  • Pakistan and China signed 8 cooperation agreements to strengthen bilateral strategic relationship between the two countries
  • Finalization of deal with IMF along with possible inflow from other donor provided some relief to the investors
  • The Ministry of Petroleum & Natural Resources decision to allocate 60mmcfd of unutilized gas reserved for Guddu Power plant to Engro Fertilizer. On anticipation of this news Engro’s stock remained in the limelight throughout the week and outperformed the market by 19%
  • Foreign exchange reserves declined to $10.5 billion, according to data released by the State Bank of Pakistan
  • Investors are also confident that the companies will post solid earnings growth for the quarter ended June 30 as future outlook remains strong, particularly for the all-important energy sector, after the government delivered on its promise and partially relieved the sector of the circular debt crisis
  • Auto sales dipping by 24%YoY in FY13
  • Remittances sent by overseas Pakistanis surging by 5.6%YoY in FY13
  • According to the Pakistan Telecom Authority (PTA) Pakistan’s Teledensity (including FLL, WLL and cellular) reaching an all-time high level of 73.5%
  • The Finance Ministry directed urgent resolution of all issues pertaining to receipt of the outstanding US$800mn from Etisilat
  • Government of Pakistan decided to raise power tariffs to over PkR17/unit for industrial consumers. Under an agreement reached with the IMF over a USD5.3bn EFF, Pakistan has to completely eliminate power sector subsidies in a phased manner in 3‐years
  • The ECC postponed its decision to provide a PkR15bn bailout package to PIA
  • Banking stocks especially HBL and NBP posted a staggering return of 10.57% and 9.86% respectively. NBP is likely to observe a greater boost in credit offtake backed by newly announced government schemes
  • Federal government has directed TCP to import 0.3mn tons of urea on an urgent basis for Kharif season
  • Gold jumped to a near threeweek high on Thursday as the dollar tumbled after the US Federal Reserve signalled it would continue to pursue monetary stimulus, given tame inflation and a fragile labour market
  • Sector-wise activity was also strong during the week, with the banking, fertiliser, cement and energy sectors leading the way
  • Banks gained across the board on rumours that the government is likely to cut the minimum deposit rate of 6% in the light of monetary easing over recent months
  • The cement sector also gained following rumours of a hike in cement prices, while the energy sector also performed decently as petroleum companies were subject to foreign buying during the week

Top ten gainers of last week were: Engro Corporation, Pak Tobacco Co, Attock Refinery, Kohinoor Energy, Habib Bank, Shifa International Hospitals, National Bank Of Pakistan, Grays Of Combridge, Dawood Hercules Corp and Lucky Cement.

Top ten losers of last week were: Pak Services, Pace (Pak), Pakistan Cables, B.O.Punjab, K.E.S.C., Feroz 1888 Mills, TPL Trakker Ltd, TRG Pakistan Ltd, JS Bank and International Steels.

Top ten volume leaders were: NBP, PTC, KESC, LPCL, FCCL, SNGP, BOP, ENGRO, BAFL, and DGKC.

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 comment:

  1. Dear Rana khurram and Ali irfan ..
    kindly share your twitter or other social media id i want to have interaction with you.

    Keep up the good work:)

    Many thanks