Karachi Stock Exchange Weekly Analysis 5 April, 2014

The Karachi Stock Exchange (KSE) market activity was bullish, MSCI changes guide index to all-time high. KSE - 100 index closed at 28,408.03 points by gaining 1291.90 points or 4.76 percent. While KSE – 30 index closed at 20,030.28 by gaining 829.74 points or 4.32 percent.

After two consecutive weeks of decline, trading activity posted strong recovery with daily volumes averaging at a staggering 209mn shares, ↑ 89% WoW. Foreigners were the major buyers with net buying of USD35.8mn during the week, the highest foreign net inflow FYTD. For the upcoming week, Musharraf’s trial would be closely watched, although the direct impact on the market is likely to remain limited in case of either outcome.

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

  • The key reasons behind the markets rebound was foreign buying interest on the back of the upcoming re-composition of MSCI FM 100 Index where Pakistan's weight is more than likely to go up to 8.9% with inclusion of 3 more stocks (PSO, LUCK and BAHL), taking total stocks from Pakistan to twelve
  • News flow of increased weight for Pakistan in the MSCI Frontier Markets (FM) Index allowed optimism to dominate at the local bourse with the KSE-100 index gaining a massive 4.8% during the week, its highest WoW gain since Jul-13
  • Continuation of peace talks with TTP
  • Index heavyweights OGDC and MCB contributed most of the gains with both stocks cumulatively adding 308pts to the index. LUCK also remained one of the major index drivers over news flow of the stock being added to the MSCI FM Index
  • Forex reserves at USD10.072bn on March 31
  • CPI-based inflation up 0.96pc in March
  • Government granted two waivers by IMF
  • WB to provide USD10.2bn to Pakistan in next five years
  • Unprecedented buying in PSO from a newly established fund for the country provided another surprise to investors
  • IMF warned that inflation is likely to rebound in coming months in Pakistan
  • IMF has advised SBP to tightening its monetary policy, as the current decline in inflation rate could be a temporary phase
  • MoF it showed KP government’s overall revenues after spending stood at Rs 32.8bn in the 1HFY14 as against Rs 11. bn in the corresponding period of previous financial year
  • Government of Pakistan would hold roadshows in 6‐major international cities to invite/attract potential investors for making investment in government papers to mobilise $500mn
  • LUCK started production in Iraq from February this year through its joint venture grinding plant
  • DGKC is expected to begin the construction of its new production plant at Hub
  • Cement sales in the country including export and local dispatches during 9MFY14 rose marginally by 0.7% to 24.705mn tonnes as compared to 24.542mn tonnes in same period last fiscal year
  • SAS a fully held subsidiary of Lafarge SA is evaluating a potential divestment of its shares in LPCL
  • OGDCL announced a gas discovery from Maru East Well‐1, which is located in Ghotki, Sindh
  • SBP In its quarterly report released on 28th Mar, SBP has expressed apprehension about achieving the growth target for FY14 due to a decline in cotton production. GDP growth is likely to remain in the range of 3.5% to 4.5%

Top ten gainers of last week were: EFU General Ins, Pak Tobacco Co.XD, IGI Insurance, Lafarge Pakistan, Ghani Glass, Indus Motor, Lucky Cement, Thal Limited, Packages Limited and Shell Pakistan.

Top ten losers of last week were: Rafhan Maize Prod., Avedan Corporation, International Steels Ltd, Nestle Pakistan, Century Paper, Muree Brewery Co Ltd, Kohinoor Textile, Cherat Cement, Pak.Int.Con.XDXB and Askari Bank Ltd.

Top ten volume leaders were: LPCL, FABL, LOTCHEM, NIB, FFBL, MLCF, KEL, FML, UBL, and JVDC.

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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