Karachi Stock Exchange Weekly Analysis 17 Aug, 2014

The Karachi Stock Exchange (KSE) market witnessed a downward trend during the past week on political instability. It recovers after Monday blues, but still closes in the negative. Karachi Stock Exchange (KSE)-100 index lost 462.75 points or 1.6 percent Week on Week (WoW) to close at 28,917.75 points as compared to 29,380.50 points of the previous week. Progressively rising political tensions translated into by far the highest ever single day decline of 1,310 points (4.5%) at the bourse, but the market showed resilience and recovered most of the losses to close only 1.6% lower WoW to 28,918 points. Volumes remained lackluster during the week as well with daily average volume of 100mn increasing by mere 6% WoW.

KSE-100 index lost 1.6% during the week primarily on account of political concerns. Losses of the week were primarily concentrated in beginning trading session (Monday) which was marked by a massive decline of 1309 points (-4.5%). Volumes remained lackluster during the week as well with daily average volume of 100mn increasing by mere 6% WoW. The market is expected to follow developments on the political front over the next week with uncertainty looming over the outcome of PTI/PAT protests. However, earnings of key banking stocks (BAFL, NBP) and other index heavyweight stocks like HUBC and ENGRO might bring in renewed interest.

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

  • Investors following political events this week on the PTI & PAT march overshadowed corporate result announcements for the week
  • Under key announcements, MCB’s profits came broadly in line with street estimates while EFERT’s non‐core income led to surprise the investors. However, APL disappointed the participants with lower earnings on the back of abnormal operating expenses booked in the 4QFY14, owing to the scrip to fall 2.56% on the last trading day of the week
  • Index heavy OGDC and MCB were the main drivers in dragging the index down, contributing a total of ~140 points
  • Foreigners’ interest weakened during the week, particularly after Monday’s mammoth fall, with foreign investors selling net shares worth ~USD0.21mn
  • Pakistan, Hong Kong and Indonesia set for Islamic bond issues
  • Overseas Pakistanis remit USD1.6bn in July 2014
  • Privatisation: 19 profit-making entities on active list
  • Price hike demand: Mari Gas should distribute profit first, says ministry
  • Autos: Volumes plummet 34% at the start of FY15: Cumulative volumes for autos in Jul-14 clocked in at 6,948 units, down by a massive 34% YoY. Almost all variants of the three auto assemblers witnessed negative volumetric growth during the month.
  • The National Bank of Pakistan (NBP) and Hub Power Company (HUBC) are to announce their 1H2014 and FY14 results respectively on Aug 19’14. For NBP, we expect the bank to post an EPS of PkR3.6/share in 1H2014, up 29%YoY
  • For HUBC, the company is likely to report FY14 EPS of PkR6.0, down 26%YoY on the back of higher O&M expenses
  • The government has drawn up a plan to allocate about 600mmcfd of imported LNG to seven IPPs in an effort to help generate 3,000MW of electricity at a comparatively cheaper cost. MoPNR has sent a summary to the ECC seeking approval for the same 
  • Gas fields will start closing from August 2014 and their maintenance will continue until October 2014. Only residential consumers could have gas supplies in the next two to three months while other sectors like power plants, fertilizer, industrial and CNG will come under severe strain because of the shutdown. The annual turnaround or maintenance of fields is usually carried out at the start of summer and ends before the beginning of winter  
  • Auto sales dip 43% MoM to 6,984 units
  • CCP issues NOC for merger of HSBC Pakistan and Meezan Bank
  • Cement sales in July 2014 dip by 14%YoY
  • OGDCL discover gas from Pasakhi Deep Well No 1
  • Proposed LNG terminal: government decides to build pipeline from Nawabshah to Gwadar
  • KE concerned over new sales tax on retailers
  • NBP seeks SBP approval for due diligence of Burj Bank

Top ten gainers of last week were: Jubilee Gen Ins, Int. Ind.Ltd, EFU General Ins, Pak Services, Muree Brewery Co Ltd, Packages Limited, TPL Trakker Ltd, Bank AL‐Habib, Stand.Chart.Bank and NIB Bank.

Top ten losers of last week were: Javedan Corporation, Agritech, TRG Pakistan Ltd, Askari Bank Ltd., Dawood Hercules Chem, National Refinery, Siemens Pak Engg., Sui North Gas Pipe., Maple Leaf Cem. and Netsol Technologies.

Top ten volume leaders were: LPCL, AKBL, FCCL, TRG, MLCF, BAFL, BOP, LOTCHEM, NBP, 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

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