Karachi Stock Exchange Weekly Analysis 11 May, 2014

The Karachi Stock Exchange (KSE) market witnessed pressure due to higher-than-expected CPI of 9.2 percent. KSE - 100 index closed at 28,494.5 by losing 426.5 points or 1.5 percent.

Trading activity took a plunge with average daily volume of 90mn shares, down 65% WoW. Average daily turnover declined by 30 percent on week-on-week basis to 141 million shares against 199 million shares. Foreigners remained net buyers during the week with an inflow of USD5.0mn as compared to USD15.4mn in the preceding week.
Following news have played vital role in Karachi Stock Market index movement:

  • Overall news flow during the week remained mixed, with last week’s inflation surprise also creating uncertainty regarding DR cut in the upcoming monetary policy
  • Anticipated status quo in upcoming Monetary Policy Statement (MPS) by State Bank of Pakistan (SBP) on May 16 along with uncertainty on political front would keep Karachi capital market volatile in next week trading
  • The political noise over the past few days has enhanced which also put investors at bay during the week
  • After a gap of one year, the country's total liquid foreign exchange reserves have crossed $12 billion mark, supported by growing foreign inflows
  • The monetary policy statement is also likely to be announced next week, which again would be a major sentiment driver for the market. The market sentiment will evolve around monetary policy
  • The outcome of the IMF meeting with the government, already underway, will influence the market sentiment in the coming week
  • Bearish sentiment prevailed at the local bourse throughout the week, as the release of above-expected CPI inflation figures (9.2 percent in April) last Friday still played on investors’ sentiment
  • Cement sector was in the limelight this week as All Pakistan Cement Manufacturers Association (APCMA) released the cement sales data for the month of April where domestic sales rose by 7.2 percent on year-on-year basis and 3.1 percent on month-on-month basis
  • Bestway Cement Limited also joined the race to acquire 76 percent stakes in Lafarge Pakistan Cement Ltd
  • Moody’s Investors Service said in a statement that upgrade in Pakistan credit rating could come from political stability and sustained build up in external liquidity
  • Karachi Stock Exchange (KSE) will likely to observe correction as investors might be opting profit taking due to early budget phenomenon, which has started to shadow the market sentiments
  • WB it had approved a USD1bn loan for Pakistan and "envisages" another USD11bn package spanning 5‐years. The loans are meant to support Pakistan's struggling energy sector and bolster its efforts to increase growth and investment and arrest poverty
  • Pakistan on Saturday received US$400mn from the ADB, as part of its five-year US$1.2bn programme for energy sector reforms
  • Cash-strapped oil marketing company Pakistan State Oil (PSO) has defaulted on international fuel supply payments, and suppliers have started imposing fines over the late payment of their dues, reportedly. Kuwait Petroleum Corporation (KPC) has imposed a fine of US$10,000 on the entity last week due to a technical default 
  • Prime Minister Mr Nawaz Sharif has directed the concerned officials to divert gas from fertilizer and CNG sector to power sector to immediately cut down power load shedding in the country by 692MWs 
  • Pakistan has approved transportation of Nato supplies to Afghanistan by air
  • The sales of urea fell by about 24% in Apr‐14 to 240,000 tonnes as compared to 314,000 tonnes in the same month last year. “This huge decline in sales may be attributed to the delay in cotton sowing season this Kharif,”

Top ten gainers of last week were: Hum Network Ltd, Muree Brewery Co Ltd, IGI Insurance, Packages Limited, Sui South Gas, Pakistan Cables, Javedan Corporation, PICIC Growth, Nishat Power Ltd and National Refinery.

Top ten losers of last week were: Atlas Honda Limited, Pak Services, Kohinoor Textile, Pak Tobacco Co.XD, National Foods, Agritech, EFU Life Assur Ltd., Netsol Technologie, Indus Motor and Abbott Lab.

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

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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