Karachi Stock Exchange Weekly Analysis 15 Sep, 2013

The Karachi Stock Exchange (KSE) market trend was bullish, where a broad consensus of status quo on MPS and disbursements by the IMF largely dictated sentiments, KSE – 100 index closed at 2 3,168.04 points by gaining 402.17 points or 1.77 percent, While KSE-30 index reached on 17,890.38 by gaining 185.49 points or 1.05 percent. Average daily traded volumes during the week were 23%WoW higher at 238.95 million shares.

The market was reacting to poor law and order situation, rupee devaluation, and uncertainty in Middle East over Syria issue. But this week turned out to be a positive one for the Karachi course as smooth progression of democracy induced a wave of optimism coupled by governance decisions made by the incumbent government over terrorism and privatization drive.

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

  • In the much awaited monetary policy for next two month, SBP increased DR by 50bps to 9.5% against divergent street estimates. This development bodes well for banking sector, as pressure on spreads should ease, which is likely to allure investors
  • Cement stocks were once again the talk of town and attracted investor’s attention. Rumors regarding a breakdown of the price mechanism of cement makers triggered a panic in the market, however later developments regarding LUCK’s participation in the APCMA meeting and a possible delay in DGKC’s expansion plans gave a ray of fresh hope to the sector 
  • With a 50bps cut in DR announced and an increased clarity on the fate of the cement makers pricing arrangement, the market is likely to take a clear direction in the upcoming week
  • IMF’s Mission Chief for Pakistan Jeffrey Franks says that the IMF has anticipated that Pakistan’s economy would grow to the vicinity of 5 per cent by the end of just‐approved economic programme in the 15‐16
  • The Ministry of Petroleum and Natural Resources is planning to increase the prices of CNG equivalent to 75 to 80% of the petrol prices, MD SSGC
  • JICS has finalized a deal to supply some 71,000 tons of urea worth US$ 21 million to Pakistan under Japan non‐project grant
  • MoF confirmed receipt of the first tranche of US$540mn from the IMF
  • Government of Pakistan dispelled speculations regarding any plans to adjust the rupee dollar parity
  • An internal meeting of the Privatization Commission was set for next week to finalize the plan for sale of 30 SOEs under the first phase of privatization while a divestment of 26% of the government’s stake in PIAA was authorized 
  • Fears of a US attack in Syria eased as the vote in US Congress was delayed
  • Earlier in the week market bid farewell to Mr. Zardari and staged a welcome to Mr. Mamnoon Hussain
  • Daily avg turnover jumped to 239mn shares, up 23% WoW, whereas US$ value traded increased by 25% WoW. A FIPI outflow US$5.6mn was witnessed during last 2 sessions however on net basis the week rounded off with US$2mn inflow
  • Foreign investment in the last two sessions witnessed an outflow of $5.6 million, on net-basis at the end of the week foreign investment was positive (net inflow) of $2 million
  • International inflows for Pakistan jumped exponentially post re-entry to the International Monetary Fund (IMF) programme of $6.64 billion coupled with Asian Development Bank and Islamic Development Bank committing $245 million and $850 million respectively
  • The energy sector was in the limelight throughout the week as tensions eased over a potential military strike by the United States and diplomatic options become the focus
  • Pakistan Petroleum seeks to benefit from a 40 million cubic feet per day (mmcfd) addition to the system from Latif gas field and Oil and Gas Development Company aims to add 350mmcfd in the next 18 months
  • Moreover, an expected increase in cement bag prices renewed buying interest in cement stocks. Going forward, key results from cement makers, such as Lucky Cement and Kohat Cement will drive investors’ actions next week

Top ten gainers of last week were: Pace (Pak), Jah.Sidd. Co., GlaxoSmithKline Pak., Shifa International Hospitals, Attock Cement, Pak Tobacco Co, Engro Foods Ltd, Bata (Pak) Ltd., Maple Leaf Cement and Bank Of Khyber.

Top ten losers of last week were: Colgate Palmolive, Hub Power Company, Javedan Corporation, Arif Habib Corp, Hum Network, Pak Services, Habib Bank, United Bank, Engro Corporation and Fauji Fert Bin.

Top ten volume leaders were: FCCL, BOP, MLCF, DGKC, JSCL, PTC, ENGRO, NBP, TRG, 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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