Karachi Stock Exchange Weekly Analysis 26 Oct, 2013

The Karachi Stock Exchange (KSE) market was bullish, Foreign buying breaks markets bearish spell and Plethora of result announcements drove investor sentiment. KSE – 100 index closed at 2 2,445.59 points by gaining 845.81 points or 3.92 percent. While KSE – 30 index closed at 17,058.30 points by gaining 767.47 or 4.71 percent. Out of total points addition of 846 points nearly 90% of the total gains was contributed by OGDC, MCB, POL, PPL and PTCL.

Peaceful Eid holidays, better September results, improved global markets and the prime minister's US visit created positive atmosphere at the local bourse. Activity improved from last week’s abysmally low levels, with average daily turnover rising to 133mn shares, up 35% WoW, whereas US$ value traded rose by 58% WoW. The week saw significant FIPI net inflows of US$29 million.

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

  • Experts attribute the positive momentum post Eid holidays to the release of US$322mn under the CSF from the US and resumption of Pak-US strategic dialogue with approval of a further US$1.6bn economic and military aid
  • World Bank and Asian Development Bank have agreed to provide US$1bn for the CASA-1000 power import project
  • The pharmaceutical industry is reportedly expecting a breakthrough in the pricing mechanism after 12 years following persistent lobbying
  • Warid International LLC, UAE has announced the buyback of WTCL at the rate of PkR4.5/share
  • Key results next week include ENGRO, PSO, LUCK, PPL, FATIMA, MLCF, BAFL, NML and FFC
  • US plans revival of aid, to release US$1.6bn
  • Forex Reserves rise to US$9.2 billion
  • PTCL reported 25% QoQ earnings decline
  • Although OGDC, UBL, and HBL results were ahead of expectations, EFOODS, NBP, and Hubco saw significant earning misses
  • Engro Fertilizer intends to issue 75mn shares out of which 56.25mn shares will be offered through book building process at a floor price of PKR20/share. The remaining 18.75mn shares will be offered to the general public at the strike price determined through the book building mechanism. on a first come‐first serve basis 
  • The telecom industry in is bracing itself for the auctioning of 3G licenses and the subsequent availability of content services and reliable internet access across Pakistan 
  • Government releases PKR63.476bn for development projects
  • ADB approves USD430mn loan for social safety net programmed
  • Cement prices likely to rise
  • Amongst E&P sector stocks, OGDC reported higher than consensus expected 1QFY14 EPS of Rs7.81, up 31%YoY and hence was able to outperform the market by 6%WoW
  • In the IPP space, HUBC and KAPCO both reported below expected results despite a better liquidity position due to circular debt resolution towards the end of June 2013
  • Government to issue US$650mn Pak International bonds
  • According to analysts, Karachi Stock Exchange benchmark 100-index witnessed buying momentum after a weeklong Eid holidays and jumped up by 846 points, or 3.1 percent, on better corporate results. The market is likely to continue upward momentum on the hopes of further good corporate results
  • The week saw significant foreign portfolio investment with the net inflows of $29 million
  • Inflation for October, IMF team's visit to Pakistan and the remaining result announcements will remain the key drivers for the market

Top ten gainers of last week were: Netsol Technologie, Fauji Cement Company, Hum Network Ltd, Oil and Gas Deve, Bank Al‐Falah, Jah.Sidd. Co., MCB Bank Ltd, Azgard Nine, Muree Brewery Co Ltd and Cherat Cement.

Top ten losers of last week were: Engro Foods Ltd, International Steels Ltd, Askari Bank Ltd., Allied Rental Mod, Attock Refinery Ltd., Packages Limited, Nishat Power Ltd, National Refinery, Colgate Palmolive and Pak Services.

Top ten volume leaders were: FCCL, PTC, NBP, LPCL, BAFL, BOP, JSCL, DGKC, EFOODS, 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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