Karachi Stock Exchange Weekly Analysis 13 July, 2014

The Karachi Stock Exchange (KSE) market charts stayed as dry as a bone this week where activity from the trading desks evaporated in thin air. Investors blamed the cliché Ramadan effect for dreary activity on the bourse while culprits also include political chaos in the country and pressure built by mixed MPS expectations for Jul’14. The KSE-100 index closed at 29,318, down 1% WoW. The KSE-100 index lost 302 points, or one percent, on week-on-week basis to 29,318 points against 29,620 points last week. Volumes fell drastically by 43.9% WoW as Ramadan commenced, with ADTO clocking in at 59.6mn shares.

Traded daily average value during the week went as low as PKR2.7bn as against CYTD daily average of PKR9.1bn. On the other hand the daily average volume for the week reflected an even worse performance as it dialed to 60mn shares, in contrary to CYTD daily average clocking in at 226mn shares. Foreign investors seemed to remain muted by aforementioned factors as foreign inflow for the last four days totaled to a moderate USD7.07mn, where major buying was witnessed in the Chemicals sector.

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

  • First monetary policy statement of FY15 will be announced on July 19, which will be the key driver for the market momentum
  • MPS announcement in the upcoming week and clarity on the political front should be events to watch for
  • The upcoming MPS is likely to see a status‐quo; however resurging inflation has increased chatter of a 50bps DR increase
  • The week kicked off on a positive note, with cement sales for June showing an impressive increase of 14.3 percent as compared to June 2013
  • Volume leaders for the week were LPCL (24mn shares), FCCL (19mn shares) and LOTPTA (16mn shares), that contributed 29% to the bourse’s total volumes
  • The opposition party, PTI, set to march against the ruling party, PML‐N, on electoral reforms and PAT workers carrying out sit‐ins/protests against the GoP anytime soon. These due events have been creating dark clouds over the political environment
  • IMF report on Pakistan’s Economy highlighted the revised country’s FY15 fiscal deficit target along with rationalizing power tariffs to overcome deficit
  • IMF also hinted on further devaluation of PKR against the greenback; however GoP expressed their views on keeping the exchange rate stable
  • Corporate result season beginning in the coming days, We expect exciting results in the banking sector while record cement dispatches, lower coal prices and stable PKR in 4QFY14 is also expected to bring positive surprises for investors from the cement companies
  • The exports and domestic sales of cement increased in June 2014 compared to the corresponding month last year. The despatches to domestic markets increased by 14.32% to 2.53mn tonnes against 2.22mn tonnes during same month last year. Similarly, exports in June 2014 increased by 2.9% to 685,000 tonnes against 665,000 tonnes of June 2013
  • IMF has approved modifications in the targets on international reserves and budget deficit for the end of June by allowing Islamabad to utilise Eurobond worth USD2bn instead of Fund’s earlier projection of USD500mn on this account
  • Government of Pakistan has given written assurance to the IMF that another surcharge will be imposed to recover PKR240bn STCF from consumers if NEPRA does not include it in tariff determination
  • WB approved SAGP in an amount of USD76.4mn, aiming to improve the productivity and market access of small and medium producers in important commodity value chains. The project would benefit approximately 112,000 farmers covering over 66,000 hectares of land 
  • Government of Pakistan is likely to increase power tariff by PKR1.30/unit for domestic consumers, using 200‐300 units and PKR2.50/unit for agriculture tube‐wells, well‐informed FM. IMF, the authorities continued with their plans to bring electricity tariffs to the cost recovery level
  • Nishat signs LoI for another 660MW coal‐based power project in Jhang
  • Mobile phone subscriptions spike up to 140 million
  • At the request of the Petroleum Ministry, ECC lifted a ban on the import of CNG kits and cylinders for factory-fitted vehicles 
  • IMF has put in place six new structural benchmarks (including two modifications) to monitor Pakistan’s macroeconomic performance for disbursement of next tranche. On its part, the govt committed to impose a new surcharge on electricity consumers to recover PRs240bn, in addition to about PRs150bn further reduction in power sector subsidies during FY15 and a 4% increase in tariff 
  • According to data released by the SBP on Thursday, overseas Pakistani workers remitted US$15.8bn in FY14, which translates into an increase of 13.7% over the remittances of US$13.9bn received in FY13 
  • PSO's receivables have risen to PRs181.5bn which may soon touch peak levels seen in 2012
  • Finance Minister Ishaq Dar reportedly rejecting the gas price restructuring plan for Mari Petroleum, causing the stock to close five percent down

Top ten gainers of last week were: Pak Services, Shezan International Ltd., Arif Habib Corp, Fatima Fert.Co., Century Paper, Engro Corp, Lotte Chemical Pakistan, Engro Foods Ltd, Nishat Power Ltd and Nishat Mills Limited.

Top ten losers of last week were: Allied Bank, Jah.Sidd. Co., TPL Trakker Ltd, Packages Limited, K‐Electric, Javedan Corporation, Thal Limited, National Foods, Siemens Pak Engg. and Int. Ind.Ltd

Top ten volume leaders were: LPCL, FCCL, LOTCHEM, KEL, BOP, BAFL, NIB, PTC, SSGC, MLCF and FFC.

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


  1. good job! Informative and quite relevant....
    kindly update your Company's Results section also..

    Best Regards,

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