Karachi Stock Exchange Weekly Analysis 21 Dec, 2013

The Karachi Stock Exchange (KSE) market was bullish, bulls rule the roast at KSE for the fifth consecutive week. KSE - 100 index closed at 25,579.33 points by gaining 322.63 points or 1.28 percent, while average daily traded volumes increased by 27%WoW to 268mn shares. KSE - 30 index closed at 19,104.55 points by gaining 238.87 or 1.27 percent.

According to experts, CPI expected to remain in double-digits and the GoP’s resolve to contain PkR/USD depreciation, continuation of monetary tightening policy should be expected. There are expectations building up for 50-100bp increase in discount rate in the upcoming Monetary Policy. Investors’ interest was mainly seen in Engro Corporation, Fauji Cement Company Limited, Pakistan Telecommunication Company Limited, Pakistan State Oil and small cap cement stocks.

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

  • PM Nawaz Sharif refused to allow an increase in gas tariffs as proposed by the MoF and instructed additional 85mmcfd gas to be diverted to industries for two months
  • The ECC directed NEPRA to determine the tariff for coal conversion of four IPPs
  • The visiting delegation of Etisilat promised to take up the matter of payment of US$800mn to Pakistan with the BoD while PTC issued a binding offer to acquire a 100% stake in Warid Telecom
  • PTA signed a formal contract with VPCML for 3G auction to be conducted in Feb 2014
  • CAD for 5MFY14 clocked in at US$1.89bn while foreign exchange reserves increased by US$505mn WoW as Pakistan received inflows from multi-lateral institutions
  • The Executive Board of the IMF completed its quarterly review of the EFF program and approved immediate disbursement of about US$550 million
  • The week saw FIPI net outflow of US$4.3 million
  • Ministry of Finance has directed SECP to complete the necessary legal and corporate formalities for the launch of the government's money market instruments, ie, T‐Bills and Pakistan Infrastructure Bonds (PIBs), through the stock exchanges by February 2014 
  • The govt is planning to offload its 12% stake in both United Bank (UBL) and Allied Bank (ABL) through stock market by March/April‐2014
  • Govt allocates 85mmcfd to textile sector exploit the benefit of GSP+ status
  • Lucky cement raises cement prices in Karachi to PRs520/bag (maximum retail price) including PRs76/bag of GST
  • Better offtake of cement in the country along with country wide short fall of the commodity kept investors interest in cement companies
  • Possible improvement in OMC margins as recommended by consultants continued to boost interest in PSO
  • NBP was among the major movers where the stock came close to PKR60/share level, primarily backed by recently announced government schemes and possible privatization
  • Tractor production and sales improved in November 2013 as compared to October 2013 amid reports of a possible 6 per cent hike in GST in January 2014
  • Iran has canceled a planned USD500mn loan to Pakistan to build part of a pipeline to bring natural gas from Iran
  • Appreciation of the Pak rupee (+0.7%WoW) vs. the US dollar

Top ten gainers of last week were: Soneri Bank, Shifa International Hospitals, JS Bank Ltd, Pace (Pak) Ltd., Stand.Chart.Bank, Shell Pakistan, Pak Services, Kohinoor Textile, Faysal Bank and ICI Pakistan.

Top ten losers of last week were: Mari Petroleum, Abbott Lab, Azgard Nine, Nestle Pakistan, Engro Corp, Thal Limited, Adamjee Ins, Bata (Pak) Ltd., Lotte Chemical Pakistan Ltd and Sui North Gas Pipe.

Top ten volume leaders were: FCCL, PTC, FABL, MLCF, JSCL, NBP, BOP, BAFL, NCPL, and DGKC.

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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