Karachi Stock Exchange Weekly Analysis 2 Aug, 2013

The Karachi Stock Exchange (KSE) market is in consolidation phase, finally correction has set in the market which pulled the benchmark lower, due to continuous political uncertainty in the country regarding presidential election and related controversial political and judicial moves, which affected investor sentiment. KSE – 100 index closed at 23,091.87 points by losing 405.20 points or -1.7 percent. Average daily volumes too were sluggish at 198mn shares, down 34%WoW. While KSE-30 index has reached on 17,942.84 by losing 397.57 or -2.17 percent.

Average trading volumes also decreased by 34 percent to 198 million shares against 302 million shares because of reduced working timings at the market. Stock market likely to show mix trend next week, Profit-taking may continue next week as well but strong results can support the market. Market usually remains mixed during Ramazan but investor’s interest may be revived after Eid.

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

  • The comfortable election of PML‐N backed Mamnoon Hussain as Pakistan’s 12th President
  • Inflation numbers for the month of July, 2013 clocked in at 8.26% while M/M inflation jumped by 2.02%. The massive jump in inflation was largely on account of budgetary implications along with Ramadan factor 
  • The Council of Common Interest (CCI) approved the National Power Policy 2013-18
  • The recent announcement of energy policy where power tariffs are scheduled to increase for commercial and industrial units from August 1, 2013 whereas residential tariff are likely to increase from October 1, 2013. The tariff rise is likely to have a mildly negative impact on corporate earnings 
  • The increase in the fuel prices and electricity tariff would reflect in the inflation numbers for the month of August, 2013
  • Federal government is gearing up to start energy efficiency audit of fertilizer sector which is operating at 32‐35% as compared to international benchmark of 60‐65% level 
  • Pakistan is expecting to receive USD1bn loan from ADB and WB during the ongoing FY14 following the deal with IMF
  • New York listed Vimpelcom, which has operations in Russia, Italy and various emerging markets, put some African assets on the block last year to focus on larger markets and cut its debt 
  • BAFL will be the key beneficiary of the likely acquisition of Warid by Etisalat as following a deal every PKR1.0/share gain should add 24 paisas/share to BAFL’s bottomline,. With the ongoing developments regarding the Abu Dhabi Group sale of its 100% stake in WTPL
  • The government fired MD of PSO, and appointed Amjad Parvez Janjua in his place on a temporary basis
  • ECC of the Cabinet meeting on Tuesday imposed a 30‐day ban on import of gold by suspending operation of SRO266(1)/2001 from July 31, 2013
  • ECC directed MoP to carry out a study within 45 days for revision of OMC margins
  • The Supreme Court on Wednesday granted three weeks to Federation to appoint a full‐time Chairman of PIA
  • Urea sales reported 45% YoY decline while DAP sales were up 41% YoY, taking 2Q13 sales to ‐20% and +55% YoY
  • Key results this week included results of FFC, EFOODS and MEBL
  • Fauji Fertilizer Company posting earnings per share of Rs7.46 for first half calendar year 2013 and having remained above expectations, while Engro Foods announced earnings of only Rs1.46 per share disappointing the investors
  • This week foreign portfolio investment saw arrival of only $0.56 million in the market against the flight of $138.01 million last week because of German Power Company’s exit from Kot Addu Power Company
  • In KSE-100 index, the highest drop of 220.91 points was witnessed on last working day of the week Thursday on concerns of inflations and expectations of an increase in the discount rate because of higher inflation numbers
  • The rupee shed 2.1% of its value against the US dollar in July alone
  • Senator John Kerry arrived in Pakistan to hold talks with the country’s leadership
  • Key results next week include Fatima, OGDC and EPCL

Top ten gainers of last week were: Siemens Pak Engg, Mari Petroleum, Sui South Gas, Netsol Technologies, Pak.Int.Con, GlaxoSmithKline Pak., Indus Motor, Pak Reinsurance, Pak Tobacco Co and Security Paper.

Top ten losers of last week were: Engro Foods Ltd, Kohinoor Energy, Lafarge Pakistan, Fauji Cement Company, Faysal Bank, Engro Corporation, Dawood Hercules Corp, Rafhan Maize Prod, Cherat Cement and Attock Cement.

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

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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