Karachi Stock Exchange Weekly Analysis 6 July, 2014

The Karachi Stock Exchange (KSE) market Volumes fell drastically by 34% WoW as Ramadan commenced, with ADTO clocking in at 106mn shares. The KSE-100 index closed at 29,620, up by increasing 276 points or 0.9% WoW.

According to analysts, next week volumes might remain at lower side. The market witnessed low volumes as expected in the first week of Ramazan, and the trend is expected to continue in the near term. Average daily value traded was down 28% WoW to US$60mn. FIPI remained strong, rising 20% WoW to US$18.56mn. Monetary policy review due mid of this month will be keenly watched, though analysts expect no change in discount rate this time around. Also any noises on the political front could prove to be essential catalysts for the market direction looking ahead.

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

  • Power sector receivables hit PRs520bn mark Power sector receivables have touched PRs520.18bn mark during 11MFY14 against PRs411bn as on June 30 2013, indicating a 26.5% increase in receivables. Power sector has also failed to collect bills from the private sector, which has reached alarming level of PRs352.09bn from only PRs281.5bn as on June 30 2013 
  • The government has finalized new rates of GIDC for different sectors of the economy to be applicable from today. The government has increased GIDC on industrial sector from PRs100/mmbtu to PRs150/mmbtu and on fertilizer sector from PRs197/mmbtu to PRs300/mmbtu, including the new urea plants of Fatima and Engro Fertilizer which were earlier exempted from the levy 
  • PBS announced June CPI at 8.2%, lower than our expectation of 8.6% and last month's 8.3%
  • Government approves 4,250MW coal based power projects
  • Pakistan’s liquid foreign reserves fell by US$273mn, from US$14.26bn on June 20, 2014 to US$13.99bn on 27 Jun 2014. This decrease was mainly due to debt servicing 
  • Monetary Policy review due mid of this month will be keenly watched, though we expect no change in discount rate this time around
  • Any noises on the political front could prove to be essential catalysts for the market direction looking ahead
  • The market will also start pricing in strong anticipated banking and cement sector results, in addition to high payouts from energy stocks
  • Despite dull market sentiment number of stocks including HUBC, AICL, INDU and SNGP posted better returns
  • Gas tariff revision pushed SNGP while settlement of tax related to HUBC also its role in pushing the stock upwards
  • PTCL was the top volume leader for the week where issues related ICH was settled
  • IMF disbursed USD555.9mn to Pakistan, confirming the country was on track with the conditions of its IMF loan program
  • NEPRA has revised down the upfront tariff for coal power projects, as the existing tariff has failed to attract private sector investment in coal‐based power generation in the country as was expected 
  • EFERT will be issuing 20.541mn shares to the IFC, a member of the WB Group, totaling PKR493mn (USD5mn) as the IFC has exercised its option to convert part of its convertible loan amount into the shares of the company 
  • PSO had reduced furnace oil supply to 18000‐19000 tons against the demand of 22,000 tons which hit power generation. GoP had allocated PKR293bn tariff differential subsidy for PEPCO and KEL in the FB‐14 of which 251bn (PKR232+19) bn was released till June 29, 2014
  • OGRA issued a notification to increase CNG price by PKR5.36/kg in region‐II and PKR2.10/kg in region‐I
  • The OGDC is next in line to be privatised by the government and investors now anticipate that its strike price will also be set at a premium to the market price
  • The Hub Power Company was the biggest gainer after it announced that the Federal Bureau of Revenue will refund Rs1.6 billion to the company after a Supreme Court decision on a withholding tax dispute went in the company’s favour. The company’s share price jumped 6.6% during the week and contributed 65 points to the KSE-100’s gains
  • There was bad news for Engro Fertilizers and Fatima Fertilizers after the government imposed Rs300 per Million British Thermal Unit Gas Infrastructure Development Cess on all fertilizer plants


Top ten gainers of last week were: Shezan International Ltd., Thal Limited, Packages Limited, Hub Power, Adamjee Ins, Indus Motor, Sui North Gas Pipe., Nishat Power Ltd, Allied Rental Mod and Archroma Pakistan

Top ten losers of last week were: Pak Tobacco Co, Javedan Corporation, Grays Of Combridge, Engro Corp, Pace (Pak) Ltd., Fatima Fert.Co., EFU Life Assur Ltd., Pak.Int.Con., Colgate Palmolive and Rafhan Maize Prod.

Top ten volume leaders were: PTC, SSGC, LPCL, BOP, AHCL, FCCL, SNGP, ENGRO, FFC, KEL and PPL.

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

No comments:

Post a Comment