Karachi Stock Exchange Weekly Analysis 24 May, 2014

The Karachi Stock Exchange (KSE) market remained extremely dull for the entire week. KSE - 100 index closed at  28,756 by losing 127 points or 0.4 percent.

The benchmark index lost 127 points during the week shedding 0.4% of its value as market heavy stocks of the likes of PAKT (-9.2%), OGDC (-0.7%) and NESTLE (-2.7%) weighed in on the index while mid-tiers KEL (+6.3%), MUREB (+15.1%) and PSEL (+10.2%) lent support to the  index. Trading activity continued to remain dull in lieu of uncertainty of the forthcoming budget. Average volumes clocked in at 96.5mn up 4% WoW. Foreigners remained net buyers during the week mopping up USD7.8mn worth of shares but shy of USD20.6mn in the previous week. With six sessions remaining prior to the budget we expect the market to remain range bound in lieu of ambiguity ahead of the federal budget.
Following news have played vital role in Karachi Stock Market index movement:

  • Government misses major budgetary targets
  • The news relatedto GDR of UBL, HBL, OGDC and PPL are likely to offer soon where we believe governmentmay easily fetch nearly USD1.6bn
  • Current account deficit rises to USD2.16bn
  • 3G/4G licenses fee over USD964mn received from telecom operators
  • Government not to pay PKR300bn circular debt
  • IPPs won’t be able to operate plants at full capacity due to non-payment of Rs300bn
  • PSO confirms it has defaulted on payments
  • NBP led consortium releases Rs27.5bn to PSO
  • LSM growth down 2.68% in March 2014
  • Textile exports grow by 6.5%YoY in 10MFY14
  • Rs250bn allocation proposed for 19 projects under Pak-China corridor  
  • Forex reserves at US$13.12bn vs US$12.88bn last week
  • Rs1.347trn (+36%YoY) projected as interest payments in budget FY15 budget
  • Fatima gets nod from shareholders for US Investment worth US$300mn
  • No increase in sales tax says an FBR member, rate to remain at 17% in the upcoming budget
  • Insurance companies allowed to launch takaful now  
  • IFC to invest in Bank AlFalah, SBP allows due diligence
  • Al Baraka plans Sukuk in Pakistan
  • CNG price raised by Rs10-15/kg              
  • FBR has proposed imposition of Special Excise Duty (SED) on import (of input and finished products) and locally produced goods where SED paid on inputs will be adjustable against final SED paid on locally produced goods from the same. SED is proposed at a rate of 1%‐2.5%
  • FBR has proposed increase in Federal Excise Duty (FED) on local production of cement from PRs400/ton to PRs500/ton, implying a PRs5/bag increase in cement prices 
  • Inclusion of KEL in MSCI index, possible launch of new model of Toyota Corolla and investment by THALL in Thar Coal Mining Company pushed the stocks in the top ten leading stocks of the week
  • Power tariff of 100MW solar power project inaugurated by PM earlier this month is set at unbelievably higher rate of PKR22.02/unit for the first 10 years, revealed an analysis by the SDPI
  • TCP imports 61,000 tonnes of urea under Saudi facility
  • PML‐N government is all set to introduce a number of revenue‐generation measures in the budget for FY15; including new taxes that are expected to yield an estimated PKR255bn
  • GoP tax target of PKR2,810bn to be envisioned in the next budget seems achievable against the revised estimates of PKR2,275bn for the outgoing financial year 
  • NEPRA reduced power tariff of Discos by PKR1.48/unit for April 2014 under the monthly fuel adjustment mechanism
  • An official said that for the first time about 30.65% rate of return has been offered in the upfront tariff for power projects based on Thar coal

Top ten gainers of last week were: Muree Brewery Co Ltd, Rafhan Maize Prod., Indus Motor, Pak Services, EFU Life Assur Ltd., Hum Network Ltd, Thal Limited, TRG Pakistan Ltd, Int. Ind.Ltd and K‐Electric.

Top ten losers of last week were: Pak Reinsurance, Pak Tobacco Co, Shezan International Ltd., Engro Foods Ltd, Nishat Chunian, Javedan Corporation, Nishat Mills Limited, Azgard Nine, Fatima Fert.Co. and Arif Habib Corp.

Top ten volume leaders were: KEL, LPCL, BOP, TRG, MLCF, FCCL, AKBL, JSCL, DGKC, BAFL and MARI.

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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