Karachi Stock Exchange Weekly Analysis 19 April, 2014

The Karachi Stock Exchange (KSE) witnessed mixed trend, bulls hit the brake late in the week. KSE - 100 index closed at 29,069.93 (after hitting an all-time high of 29,672 on Thursday) points by losing -179.52 points or -0.61 percent. While KSE – 30 index closed at 20,297.49 by losing -236.2 points or -1.15 percent.

Trading activity remained buoyant increasing 14% WoW, averaging at 259mn during the week. After gaining 7.9% in the preceding two weeks, KSE’s exuberance was challenged as the benchmark index lost 0.6% in a week marked by heightened volatility. Foreign flows continued to remain positive mopping up USD7.5mn worth of shares, though shy of the mammoth USD34.8mn net buy in the previous week. We expect the upcoming results in the next week to guide the index momentum with major results due including that of: MCB, PPL, DGKC and Lucky. According to analysts, financial results and foreign portfolio investment will set the direction of the market next week.
Following news have played vital role in Karachi Stock Market index movement:

  • Banks were moving on a fast lane along with cement stocks while oil stocks slipped a bit
  • The Pakistan Taliban announced that ceasefire will not be extended
  • The negativity primarily emanated from the Oil sector with OGDC, POL, PPL and PSO losing 3.62%, 3.95%, 1.79% and 5.26% respectively. Cumulatively contributing -257 points to the index
  • USD4.5bn WB loan for Dasu power project likely
  • Procurement of locomotive: IDB to invest USD264mn
  • Moody’s hints at improved outlook
  • The bids of four mobile operators qualified for the auction of 3G and 4G licenses (Mobilink, Telenor, Ufone and China Mobile)
  • Current account deficit over USD2.1bn, data reveals 
  • Major results due in upcoming week including that of: MCB, PPL, DGKC, ABL, BAFL, MEBL and Lucky
  • ECC in its meeting chaired by Ishaq Dar decided to withdraw SRO15(1)/2010 that exempted cotton yarn import from customs duty of 5%
  • Mar-14 Current account deficit clocked in at US$156mn vs. a surplus of US$167mn in Feb-14
  • Daily value traded fell by 10% WoW to US$146mn. Net FIPI during the week was US$7.5mn
  • Attock Cement has signed a JV agreement to set up a 3000tpd or 0.9mtpa cement grinding unit in Basra, Iraq
  • Global rating agency Moody’s has hinted that if Pakistan continued to improve economic performance, the country’s credit rating could be improved 
  • PPL, one of the leading oil/gas E&P companies, is committed to adding up to 3.23 TCF gas within next three years
  • Another thing to watch out for is the relationship between the military and the government, which has been strained recently
  • Average daily turnover increased by 18 percent on week-on-week basis to 368 million shares against 332 million shares. Daily value traded remained lacklustre, down by 36 percent on week-on-week basis to $86 million
  • The week saw foreign portfolio investment inflows of $7.5 million as compared to $34.8 million last week. The start of the Easter holidays also meant that foreign buying ($7.5 million for the week) was at a minimum and could not provide support to the index
  • The current account deficit clocked in at $156 million in March and $2 billion Eurobond proceeds were credited to the State Bank of Pakistan (SBP) 
  • The earnings season kicked off in full gear this week with several industry heavyweights announcing their results for the period ended March 31. The results were by and large in-line (Attock Group Companies) or above (Engro Foods, KAPCO) market expectations and had a positive impact on the market

Top ten gainers of last week were: Mari Petroleum, Pak Services, Pak.Int.Cont, NIB Bank, Allied Bank, Askari Bank Ltd., TRG Pakistan Ltd, Shell Pakistan, K‐Electric and United Bank.

Top ten losers of last week were: National Refinery, Jubilee Gen Ins, Javedan Corporation, Thal Limited, Soneri Bank, Muree Brewery Co Ltd, Pak Tobacco Co, Shifa International Hospitals, P.S.O. and Engro Foods Ltd

Top ten volume leaders were: KEL, JSCL, NIB, LPCL, FABL, BOP, MLCF, NBP, PACE, TRG, and BAFL.

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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