Karachi Stock Exchange Weekly Analysis 17 Jan, 2014

The Karachi Stock Exchange (KSE) market was bullish and attained another all-time high as SBP keeps DR at 10% (unchanged). KSE - 100 index closed at 26,913.85 points by gaining +425.53 points or 1.61 percent, while KSE - 30 index closed at 19,697.62 points by gaining +199.38 or 1.02 percent.

According to analysts, KSE-100 index movements will likely be guided by foreign participation and result announcements in the upcoming week. Stocks that normally announce payout with Dec-13 results would lure investor interest. The textile sector is likely to remain in the limelight over the coming week on expectations of M&A activity within the sector. Activity fell slightly from last week’s level, with average daily turnover falling to 296mn shares, down 7% WoW, whereas US$ value traded fell by 9% WoW. The week saw a net FIPI inflow of US$7.6mn.

Following news have played vital role in Karachi Stock Market index movement:
  • SBP keep the DR at 10% in line with expectation. Recent SPI numbers were on the lower side hence we can expect lower inflation in the upcoming month
  • GIDC driven hike in urea prices reversed. After a 4‐hour meeting with govt officials, fertilizer producers have agreed to reduce urea prices by PRs114/bag to PRs1786 from PRs1900. Recall urea prices were raised by PRs178/bag to PRs1900/bag early this monthin response to PRs103/mmbtu and PRs50/mmbtu hike in GIDC on feed and fuel gas for fertilizers
  • As per the press release issued by ECC and notice given by Engro Corp, the Economic Coordination Committee (ECC) has approved 70cents gas pricing for Engro Fertilizer 
  • Remittances rise to USD7.8bn in 1HFY14, up 9.5% YoY
  • Trade deficit dipping by 24%YoY in Dec-13
  • MCB Bank (MCB) announced that it is setting up a wholly owned Islamic Banking subsidiary
  • Engro fertilizer’s (EFERT) stock commenced trading today at the bourse and closed at its upper circuit (+5%) on news that ECC has approved concessionary gas pricing for the company
  • EFERT is likely to continue with its bull run across the week following positive development on concessionary gas pricing, with a spillover positive impact on ENGRO and DAWH scrips
  • Strong December quarterly results expected from EFert, PSO, and FFBL could garner stock-specific interest
  • With a possible flow of USD380mn from CSF in the upcoming week may result in marginal uptick in SBP foreign exchange reserves
  • In the upcoming month GoP is likely to make payment of USD295mn, which is likely to exert pressure on foreign exchange reserves
  • It seems equity investors are waiting for the mouth watering privatization deals where investors are likely to make their fortune in the long term
  • SBP has given a green signal to SMBL to transform its conventional core banking operations into Shariah‐compliant Islamic banking
  • SECP has approved the issuance of the first‐ever listed Sukuk issue for an amount of PKR6bn by KESC
  • Market has performed well during last week, on support of granting Generalised System of Preferences (GSP) Plus status to Pakistan which brought in renewed investors’ interest in the textile sector
Top ten gainers of last week were: Muree Brewery Co Ltd, Jah.Sidd. Co., Feroz 1888 Mills Ltd, TPL Trakker Ltd, Grays Of Combridge, Archroma Pakistan, Netsol Technologie, EFU General Ins, Dawood Hercules Chem and TRG Pakistan Ltd

Top ten losers of last week were: Shell Pakistan, Javedan Corporation, B.O.Punjab, Lafarge Pakistan, Lucky Cement, Millat Tractors, Faysal Bank, Fatima Fert.Co., Allied Bank and Maple Leaf Cem.

Top ten volume leaders were: JSCL, KESC, ANL, TRG, LPCL, FCCL, PACE, LOTCHEM, MLCF and BOP.

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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