Karachi Stock Exchange Weekly Analysis 23 Aug, 2013

The Karachi Stock Exchange (KSE) market trend was bearish, KSE feels the heat from regional sell-off. KSE – 100 index closed at 22,714.68 points by losing 958.62 points or 4.0 percent. Fear of contagion, tension between India and Pakistan, uncertainty over bi-elections in Pakistan, uncertainty over the monetary policy measures and fear of implementation of IMF’s stern conditions, widespread floods in the country, and below expected corporate results has kept investors away from the market.

According to analysts, corporate results will continue next week, which might keep mixed trade in the market. The monetary policy statement may also be delayed till September, which will also have some positive impact on the index. The International Monetary Fund (IMF) is scheduled to meet on September 4 and if the monetary policy statement was delayed till the IMF meeting, the State Bank of Pakistan might not increase the discount rate, which will boost trade in the market.

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
  • State Bank of Pakistan has postponed the monetary policy, which was scheduled to announce on 27
  • Investors are concerned on a possible interest rate hike in this month’s monetary policy (scheduled to be on August 27, 2013) 
  • Widespread floods in the country stifled the performance of the stock market this week
  • Below expected corporate results further exacerbated weak market sentiment as bears gained ground at the local bourse. This week saw corporate results of PPL, HUBC, NBP, HBL, UBL and Engro Corp. PPL, NBP, HUBC and Engro Corp reported result below expectations, which resulted in market weakness
  • Financial results of the cement companies were unable to drive investor’s interest
  • Pakistan registered a current account (CA) surplus of US$46mn in July 2013 vs. a deficit of US$427mn in July 2012
  • In order to re-build its depleting foreign exchange reserves and stabilize the exchange rate, the government is seeking US$500mn of short-term financing from foreign banks
  • Pakistan submitted a Letter of Intent to the IMF this week under Extended Fund Facility (EFF) for a loan worth $6.6 billion
  • MCB Bank profitability up by 6.1% QoQ
  • Pakistan’s foreign exchange reserves rose by US$73 million to US$10.399 billion during the week ended August 16 from US$10.326 billion 
  • PKR depreciated quite speedily to reach PKR103.66 against the greenback
  • After the government decision to enhance GST from 26% to 31% on CNG, the commodity price is likely to increase by PKR2.68/kg
  • Foreign portfolio investment saw arrival of $13.49 million in the market against $7.70 million last week
  • During the week current account surplus and improved textile exports showed economic recovery
  • In the outgoing week Prime Minister Nawaz Sharif’s speech fell short of investor’s anticipation, which magnified the bearish sentiment
  • Pak Rupee depreciated quite speedily to reach Rs 103.66 against the greenback
  • Consumer Price Index (CPI) inflation for the month of July 2013 jumped to 8.26 percent where monthly inflation depicted an over 2.0 percent increase

Top ten gainers of last week were: Netsol Technologies, IGI Insurance, J.D.W.Sugar, Askari Bank, Kohinoor Energy, ICI Pakistan, National Foods, TPL Trakker Ltd, Bank AL‐Habib and Habib Metro Bank.

Top ten losers of last week were: Security Paper, Cherat Cement, Clariant Pakistan, Grays Of Combridge, Pak Services, National Bank Of Pakistan, Pak.Int.Con, Lafarge Pakistan, GlaxoSmithKline Pak. and Engro Foods Ltd.

Top ten volume leaders were: FCCL, BOP, NBP, LPCL, EFOODS, HUBC, NIB, SSGC, KAPCO and ENGRO.

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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