Karachi Stock Exchange Weekly Analysis 26 Jan, 2014

The Karachi Stock Exchange (KSE) market saw some interesting trends at the KSE this week, with the KSE-100 rising by 0.3% WoW, closing at 27,002 points, whereas the KSE All Share Index rose much faster at 1.5% WoW. The stock market achieved a significant milestone this week after the benchmark KSE-100 index managed to cross the 27,000-point barrier to close at an all-time high of 27,002 at the close of trading on January 24. KSE - 100 index closed at 27,002.89 points by gaining +89.04 points or 0.33 percent, while KSE - 30 index closed at 19,601.60 points by losing -96.02 or -0.49 percent. Activity rose slightly from last week’s levels, with average daily turnover increasing to 310 mn shares, up 5% WoW, whereas US$ value traded rose by 23% WoW. The week saw net FIPI inflow of US$24mn, a significant increase from the run-rate of the last few weeks.

According to analysts, The momentum of the market in the upcoming week is likely to be dictated by the spate of results as corporate result season enters its second week. Upcoming results include FFC, FFBL, LOTCHEM and HCAR. Continued regulatory developments could also feature in the upcoming week with an expected decision on OMC margins likely.

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

  • The IMF’s reduction of Net International Reserves (NIR) requirement for Pakistan by US$2bn and subsequent eligibility for the third tranche under the IMF’s Extended Fund Facility (EFF)
  • Sharp uptick in textile exports for the month of Dec’13, increasing by 25%MoM/20%YoY
  • NEPRA’s declaration terming the Government’s plan of converting IPPs from FO to coal as illegal and refusal to issue a tariff in this regard
  • Offer by the Qatari Government to downward revise the export price for LNG to Pakistan and in this regard PSO’s plans to act as the LNG importer
  • The large‐scale manufacturing sector (LSM) posted an impressive growth of 5.23% in 5MFY14
  • According to SBP, the country's current account balance posted a US$285 million surplus in Dec‐13 as compared to US$572 million deficit in Nov‐13
  • The government raised PRs733bn from the banking system which was much higher than the target of PRs450bn set for this quarter (January‐March, 2014)
  • The country's liquid forex reserves fell by US$149mn during last week
  • Possibly escalation in cement price in the range of PKR 15‐20/share pushed the share prices upwards
  • The payout by banking sector, fertilizer along with oil sector is likely to play a major role in the market
  • The federal government has reportedly decided to wind up NFC and NFML, subsidiaries of MoI&P, due to massive corruption in the handling of imported urea, well informed MoI
  • MTL suspends production. The increase in GST from 10% to 17% since the beginning of the New Year has slowed down tractors sales and forced one of the leading manufacturers to suspend production for 2‐weeks. Meanwhile, tractor vendors are also feeling the pinch and many of them have also shut down production 
  • Sindh government is expected to get a soft loan of USD86mn from the WB for a project to boost agricultural growth in the province
  • APTMA, Punjab has claimed that energy supply to textile industry has resulted in 21% increase to USD215mn in December to December period and now APTMA is hopeful to achieve USD3bn exports out of the capacity, which was earlier closed 
  • PSM has sought release of PKR1.5bn, approved by the ECC, to disburse 45‐day salary of 16,000 employees. PSM that the mills had approached the FM through ministry of industries requesting immediate release of amount ordered by the ECC in its Jan 16 meeting 
  • In the outgoing week money markets depicted relative calm in the wake of a status‐quo being maintained by SBP in DR
  • T‐Bill auction held on Jan 22, 2014 saw PKR730bn being raised against a maturing amount of PKR674bn
  • Several blue-chip companies announced their results during the week including Pakistan Petroleum, the Attock Group companies and Engro Foods
  • Engro Fertilizers made a solid entry at the bourse, closing at its upper circuit breaker during all five trading sessions. The share price of the company rose 27.5% during the week to cap off a largely successful Initial Public Offering of the stock
  • Engro remained in limelight during the week on news of approval of concessionary gas supply. The stock traded 11 percent of total 100-share index’s traded value
  • Foreigners were again net buyers during the week and bought a net of $24 million worth of equity at the bourse, up from $7.6 million in the preceding week
  • Index was primarily dragged by heavyweights OGDC and MCB, which lost 2.6 percent and 2.8 percent, respectively, excluding impact of these two stocks the index would have posted a return of 0.9 percent
  • Pakistan becoming eligible for the next International Monetary Fund tranche after time bound target of Net International Reserves was revised downward by $2 billion for end-December 2013

Top ten gainers of last week were: Muree Brewery Co Ltd, Century Paper, Nestle Pakistan, Pak.Int.Con., Feroz 1888 Mills Ltd, Hum Network Ltd, Kohat Cement, Pakistan Cables, Faysal Bank and Cherat Cement.

Top ten losers of last week were: Pace (Pak) Ltd., Pak Tobacco Co., National Foods, National Refinery, Javedan Corporation, Siemens Pak Engg., Thal Limited, Pak Services, Netsol Technologies and Millat Tractors.

Top ten volume leaders were: LPCL, FABL, FCCL, ANL, KESC, PTC, JSCL MLCF, BOP 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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