Karachi Stock Exchange Weekly Analysis 8 Aug, 2013

The Karachi Stock Exchange (KSE) market was characterized by acute volatility during this shortened week ahead of the Eid holidays. KSE - 100 index closed at 2 3,237.19 points by gaining 145.32 points or 0.63 percent while KSE-30 index closed at 18,076.55 points by gaining 133.71 points or  0.75 percent.

The market was badly affected by news i.e. law & order concerns, flash floods over the weekend, higher than expected CPI in Jul’13 (8.3% YoY) and disappointing results from EFOODS and OGDC.

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

  • S&P’s affirmation of Pakistan’s ratings at ‘B-/B’
  • Inflation numbers over the weekend triggered the panic button where CPI inflation on M/M basis reached 2.02% taking Y/Y inflation to 8.26%
  • The higher inflation numbers pushed pessimism over investor’s mind backed by possible hike in discount rate
  • Power tariff for industrial and commercial consumer were raised, which may push the cost of production
  • The cement stocks were beaten hard by the investors as most of the stock witnessed sizable price adjustment. Massive downward revision is prices of cement stocks along with fertilizer stocks were witnessed
  • Local cement sales plunged by 10.43% while exports reduced by 0.75% in July 2013
  • Result season is likely to speed‐up after the long festival weekend where banks and oil companies are likely to declare the financial results. Some results due next week include BAFL, ATRL, APL, POL, PPL and MCB
  • Illiquid stocks topped among the major gainers list while banking stocks were also back in action
  • IDB will extend Euro 750mn and USD150mn loans for import of fertilizer. This was agreed between FM and President IDB at a meeting in Jeddah. Currently, FM is in Saudi Arabia to perform Umrah
  • Pakistan is set to become a net wheat importer this year with purchases climbing to the highest in five years after delayed planting and reduced fertilizer use hit domestic output and drove up local prices. The South Asian nation, which has been exporting wheat for the last 3‐years 
  • Issuance of new licenses to various pharmaceutical companies will lead to investments and employment opportunities as Pakistan’s pharmaceutical industry currently ranks sixth in the world with export potential of Rs 300bn and a growth rate of 17%
  • MoP hinted at the government's intention to renegotiate the price of IP pipeline. In reply to a question he said that Iran had made a commitment to extend USD500mn for laying the pipeline and Pakistan is now considering requesting Iran to lay down the entire pipeline at a cost of USD1.5bn project 
  • Local auto sector is likely to adjust prices upwards as a constant surge Êin the cost of production is pushing the manufacturing sector to raise the prices of their products. Inflated petroleum prices, a hike in electricity tariff and rupee depreciation have hit industries

Top ten gainers of last week were: NIB Bank, Clariant Pakistan, Mari Petroleum, Dawood Hercules Corp, Colgate Palmolive, Millat Tractors, Jubilee General Insurance, Hum Network, Soneri Bank and Bank Al‐Falah.

Top ten losers of last week were: IGI Insurance, Sui North Gas Pipe, Engro Foods Ltd, GlaxoSmithKline Pak., Fauji Cement Company, Engro Corporation, Packages Ltd, Lafarge Pakistan, Thal Ltd and Jah.Sidd. Co.

Top ten volume leaders were: FCCL, BOP, NBP, PTC, EFOODS, ENGRO, NIB, LPCL, BAFL and PSO.

Thank you very much for reading this article, and a very Happy Eid Mubarak to you and your family.

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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