Karachi Stock Exchange Weekly Analysis 28 September, 2014

The Karachi Stock Exchange (KSE) market Bullish momentum looses steam as KSE stays flat this week. The KSE-100 index failed to sustain its level above the 30,000-point barrier as lack of triggers and limited foreign interest took toll on the benchmark index which fell 310 points (1%) to 29,705 during the week ended September 26.

Average trading volumes fell by 5.5% and stood at 154.6 million shares traded per day, while average daily values rose eight percent and were recorded at Rs8.37 billion. The KSE’s market capitalisation stood at Rs6.92 trillion at the end of the week. In contrast to robust foreign inflow of US$13.2mn last week, FIPI clocked in at US$0.3mn this time around (down 98% WoW).

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


  • Lack of triggers amid growing political tension along with mixed corporate results and declining foreign buying were the major causes of the index’s decline
  • The State Bank of Pakistan also announced the monetary policy, for the next two months, over the previous weekend and kept the discount rate unchanged at 10%, resulting in a collective yawn from the market as the decision was widely expected
  • Gains from financials, including UBL (+3.0%) and HBL (+7.1%), contributed a total of 102 points to the index. However, negativity in oil stocks dragged the index by 218 points (OGDC -4.1%, PPL -1.4%, POL -3.0%). Weak international oil prices coupled with expectations of higher discount on OGDC’s SPO primarily dented investor sentiment
  • Oil and Gas Development Company’s secondary public offering also played a major role in the index’s decline with OGDC alone slashing 117 points off the KSE-100 index
  • The government intends to offload 323 million ordinary shares of the company in a bid to raise $815 million, the largest offering of a government-owned company in eight years
  • The political situation showed no signs of coming to an end as the Pakistan Tehreek-e-Insaf (PTI) hosted a massive rally in Karachi over the weekend, highlighting popular support for the protests
  • The government remained apathetic towards the protests with the prime minister taking off for New York to attend the United Nations General Assembly summit
  • Foreign buying took a sharp dip and was recorded at only $0.3 million as compared to $13.2 million in the previous week. It was a second week in succession that foreign buying declined and will be a cause of concern for investors going forward
  • After posting YoY growth of 10% in Jul-14, Urea demand for the country maintained its upward trajectory in Aug-14, clocking in at 631ktons, up 22% YoY
  • Saif Power Limited – a new listing on offer: Saif Holding Company, the majority shareholder (63.5%) of Saif Power Limited, offers 48.3mn shares (12.5% of paid up capital). 36.2mn would be offered through book building on 30th September 2014, while the remaining 12mn would be offered to the general public on the price determined through book building
  • The country's current account balance continued to deteriorate and posted a deficit of US$1.37bn during 2MFY15 mainly due to higher goods imports and slow foreign inflows 
  • Pakistan plans to split ailing national flag carrier PIA into two companies and sell control of the core business to a global airline over the next 18 months. However, political opposition to the sell‐off is expected to be intense 
  • KEL also lost 6.13% return on the heels of speculators whispering the rumor of disapproval of the final dividend announced by the company
  • On key earning announcements, NML announced its FY14 earnings that beat market expectations, leading to the scrip rallying up 4.01% in the week
  • The Auto sector continued its ride behind the Yen depreciation (4.16% MTD) where INDU has already jumped by 22% MTD
  • Major development on the GIDC converting to a fee and not a tax is expected to reverse the optimism in FFC and FFBL
  • GoP is expected to announce a reduction in POL prices effective from Oct 1 as the prices in the international market have been on the decline
  • Pakistan’s export of textile and clothing fell by over 5% in the 2MFY15 from a year ago
  • Barclays, a London based banking and financial firm, is in talks to sell its business in Pakistan to HBL
  • The number of broadband subscribers has reached 3.64mn by April this year with addition of around 92,396 connections during the month
  • Interest payments on domestic debt grew by 80.5% to Rs188bn in July 2014 from PKR104bn in the same month last year
  • Finance Minster hinted at delay in fourth IMF installment
  • Foreign exchange reserves rise to US$13.5bn


Top ten gainers of last week were: Archroma Pakistan, Mari Petroleum, Pakistan Cables, Thal Limited, Atlas Honda Limited, Int. Ind.Ltd, Packages Limited, Muree Brewery Co Ltd, Century Paper and Attock Refinery Ltd.

Top ten losers of last week were: Cherat Cement, Pak Tobacco Co, Attock Cement Ltd, K‐Electric, TPL Trakker Ltd, NIB Bank, EFU General Ins, Allied Rental Mod, Engro Corp and Jubilee Gen Ins

Top ten volume leaders were: LPCL, KEL, NCL, BOP, BAFL, FABL, DGKC, NML, GLAXO, JSCL, and TRG.

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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