Karachi Stock Exchange Weekly Analysis 17 Aug, 2013

The Karachi Stock Exchange (KSE) market benchmark continued its upward journey slowly and gradually, KSE shrugs off Ramazan languor to kick-off upward trend. KSE - 100 index closed at 23,673.30 points by gaining 436.11 points or 1.9 percent with nearly 212 million shares average daily turnover. While KSE-30 index closed at 18,402.28 by gaining 325.73 or 1.80 percent.

Average trading volumes also surged by 22 percent on week-on-week basis to 221 million shares against 181 million because the working time at the market comes to normal after the end of Ramazan. Foreign portfolio investment saw arrival of $13.49 million in the market against $7.70 million last week.

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

  • Tension between India and Pakistan escalated with exchange of fire over the border
  • PTA successfully blocked numerous servers and gateways of international carriers involved in grey telephony
  • ECC did not approve removal of subsidy on fertilizers in order to protect flood-hit farmers
  • Activity churned up in the oil and gas sector due to tensions in the Middle East because of Egypt as investors expect the sector to rebound on the back of rising international oil prices
  • SBP is likely to declare the monetary policy this month where investors are anticipating hike in discount rate in the range of 50bps to 150bps which can possibly impact the benchmark momentum in the upcoming days
  • The upcoming month inflation numbers would be crucial in determining the MPS stance
  • The SBP on Monday announced withdrawal of condition of National Tax Number (NTN) for all sale and outward transactions of foreign exchange from open currency market
  • Inflation ticked up to 8.3% YoY in July 2013 (from 5.9% a month prior) but real interest rate is still positive
  • In the later half the market swing in both the direction after news related to flood pushed the investors on the sideline from number of stocks
  • This week saw corporate results of Attock Group, with POL, ATRL and NRL reporting results significantly below expectations while APL posted earnings inline with our expectation with a bumper cash dividend and a surprise 20% bonus issue
  • Positive sentiment at the Karachi Stock Exchange lent strong support by rising foreign portfolio investment inflows, which were recorded at $13.5 million
  • Key results next week include HUBC, PSMC, NBP, ENGRO, PPL, HBL
  • Cement stocks were seen under stress after heavy rains were witnessed across the country
  • Cement manufacturers could look to increase cement prices by PKR 35-40 per bag
  • Power tariff hike will have a positive impact on cement and fertiliser stocks, besides increase in global oil prices
  • Attock Group announced its financial results which fell short of investor’s anticipation on account of payout
  • Majority of the banking stocks are likely to declare its financial results for the half year soon
  • News related to increase in the amount of IMF bailout package seems to be a good sign
  • Steel consumers in Pakistan are going to feel the maximum heat of the power tariff hike announced by the government as steel prices will go up by at least Rs5,000 per ton
  • The MoF here on Wednesday released Rs 19.5 billion power tariff subsidy to PEPCO to bridge the gap between power purchase and power sale price to the consumers during the month of July 2013 
  • Ministry of Industries and Production is to seek a bailout package of Rs 21 billion for a 'technically bankrupt' PSM. It has also been learnt that the PC is working on a plan to sell 26 percent shares of the mills 
  • Chevron has signed an agreement to sell Chevron Pakistan Limited, the entity which holds the Chevron retail, commercial and industrial sales, and aviation fuels businesses and is a shareholder in the PAPCO pipeline, to Total Parco Pakistan Limited 
  • In an alarming development, the Walt Disney Company has decided to cancel import orders worth $150 million after assessing that 16 textile companies handling their orders in Pakistan weren’t meeting international health and safety standards 
  • The PIA Turnaround Strategy, approved by its board of management, recommended immediate induction of 10 fuel efficient new generation of aircraft either Boeing737NG of the US or Airbus320 from France on dry lease instead of purchasing new aircraft 
  • The Ministry of Commerce & Textile Industry has rationalized the import of gold by jewellery exporters and removed the condition of import entitlement of gold equal to the gold content of jewellery actually exported 
  • Very high flood in River Chenab hundreds of central Punjab villages (in the districts of Sialkot, Gujrat, Narowal, Gujranwala, Hafizabad and Kasur) under floodwater
  • The E&P sector remained in focus on the back of rising international oil prices as tension flared in the Middle East

Top ten gainers of last week were: J.D.W.Sugar, Pak.Int.Con, IGI Insurance, Mari Petroleum, Siemens Pak Engg , Pakistan Cables, Netsol Technologie, JS Bank, International Industries and ICI Pakistan.

Top ten losers of last week were: Attock Refinery, NIB Bank, Security Paper, Indus Motor, Bata (Pak) Ltd., Engro Foods Ltd, Pak Reinsurance, Nishat Power, National Refinery and Pakistan Telecommunication.

Top ten volume leaders were: BOP, FCCL, NBP, JSCL, SSGC, ENGRO, TRG, NIB, PTC, and LPCL.

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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