Karachi Stock Exchange Weekly Analysis 15 Mar, 2014

The Karachi Stock Exchange (KSE) market activity was bullish. Improved macro picture allows the KSE to close in the green. KSE - 100 index closed at 27,124.47 points by gaining 232.24 points or 0.86 percent. During the week index registered an all‐time high closing of 27,309 points on Tuesday. While KSE – 30 index closed at 19,579.43 by gaining 32.52 or 0.17%.

Average daily volumes clocked in at 283mn shares, up 12%WoW. Trading activity continued to remain strong during the week with average daily volume of 195mn shares, + 24% WoW. Foreigners’ remained net sellers during last week and sold shares worth USD3.79mn, against marginal buying of USD0.33mn last week.

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

  • SBP keeps key discount rate unchanged at 10pc. It may lead to Banks outperforming next week with Cements and other leveraged plays e.g. EFERT taking a hit
  • The rupee has appreciated by more than 7 percent since the beginning of the month due to an increase in foreign investment and remittances from overseas Pakistanis as well as several foreign loans aimed at propping up the economy
  • Continued ceasefire with militants also increased the confidence of investors
  • The benchmark index sustained its momentum and gained 1% during the week on the back of 3.9% PKR appreciation against USD
  • Oil stocks (also index heavy) primarily drove index upwards due to optimism on improvement in macros while HUBC and NML correction limited gains as PKR appreciation pulls their earnings down
  • Country receives foreign inflows of over USD3.5bn in FY14. Saudi Arabia gives USD1.5bn to Pakistan, IMF told. Remittances rise to US$ 10 billion. Reserves jump to USD9.4bn. IMP also praised PKR appreciation
  • With the result season largely over, investor attention is likely to return to macros particularly the sustainability of the PkR at sub-PkR100/US$ levels
  • Postponement in the proposed 3G license auction until the last week of April 2014
  • Government of Pakistan invited Expression of Interest for financial advisors for 4 privatizations (the three listed companies are OGDC, PPL and UBL)
  • As per CEO of HUBC, the company has decided to set up a new imported coal‐based power generation plant of 600MW capacity with an investment of US$800mn and will be submitting its letter of intent in this regard to the Pakistan Power Infrastructure Board (PPIB) soon 
  • Engro faced power outage/technical issue with their fertilizer plants, due to which both urea plants were tripped. However this issue is now sorted and the company is in the process of restarting both plants
  • Pakistan’s auto industry, especially engineering companies and vendors, have welcomed assurances by PM that his government would make greater efforts to resolve the problems impeding the auto industry’s growth, a press release from Indus Motors 
  • Summit Bank Limited has launched its Islamic Banking with setting up new branch in Karachi with a plan to convert overall banking operation from conventional to Sharia‐compliant in the next 3‐years
  • Byco has invested over USD800mn on the various projects in the province of Balochistan in recent years out of which more than 50% is foreign investment, CoS Byco Industries Incorporated 
  • China is to invest USD50bn in energy and infrastructure projects in Pakistan till 2017 of which USD35bn investment is anticipated in energy sector

Top ten gainers of last week were: Pak Suzuki Motor, Javedan Corporation, Shell Pakistan, Askari Bank Ltd., TPL Trakker Ltd, Thal Limited, Soneri Bank, Abbott Lab, Grays Of Combridge and Pak Tobacco Co.

Top ten losers of last week were: Bank AL‐Habib, Hub Power, Nishat Chunian, Muree Brewery Co Ltd, National Foods, Nishat Mills Limited, Hum Network Ltd, Feroz 1888 Mills Ltd, TRG Pakistan Ltd and IGI Insurance.

Top ten volume leaders were: LPCL, BOP, TRG, MLCF, KEL, FCCL, JSCL, AICL, AKBL 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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