Karachi Stock Exchange Weekly Analysis 7 October, 2014

The Karachi Stock Exchange (KSE) market Bullish momentum looses steam as KSE stays flat this week. The stock market recovered losses from the previous week as interest in the banking sector resulted in the KSE-100 index again breaching the 30,000 barrier, climbing 397 points (1.3%t) to close at 30,103 on Friday.

Average trading volumes fell 22.7% ahead of Eid holidays and stood at 119.5 million shares traded per day, while average daily values also fell 23.6% and were recorded at Rs6.40 billion. The KSE’s market capitalisation stood at Rs7.01 trillion at the end of the week.

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


  • The banking sector took centre stage following the revelation of inflation numbers for September which clocked in higher-than-expected at 7.68% as compared to 7% in August
  • The benchmark index has shifted between both sides of the 30,000-mark in recent weeks as political uncertainty has left investors unconvinced about the market’s future
  • With floods hitting the country, food inflation is expected to go up, further resulting in a higher CPI in the coming months, which in turn can prompt a hike in the discount rate
  • During the week, the State Bank of Pakistan also announced that it would raise Rs1.4 trillion during the second quarter of the current fiscal year through PIBs and T-Bills
  • Banking sector stocks jumped on these developments with Habib Metropolitan Bank’s share price jumping 14% during the week. Similarly, Allied Bank Limited, National Bank of Pakistan, United Bank Limited and Habib Bank climbing 6.2%, 3.6%, 2.9% and 2.3%, respectively
  • The week also saw a turnaround in the fortunes of the index heavyweight Oil and Gas Development Company as full details of its global depositary receipts (GDRs) issuance were revealed. The company’s stock had taken a beating in recent weeks amid rumours of the issue being offered at a significant discount to its current market price
  • Foreign buying was another major positive for the bourse this week as foreigners purchased a net of $9.4 million worth of equity during the week
  • The FBR reported that tax collection jumped 14% in the first quarter of the fiscal year and stood at Rs549 billion
  • The country’s foreign exchange reserves fell $94 million to $13.2 billion and the Pakistani rupee continued to depreciate against the greenback
  • International Monetary Fund (IMF) has confirmed that a delay has marred the finalization of the fourth review, and is unwilling to give any specific date for release of next tranche of US$555mn under US$6.65bn Extended Fund Facility to Pakistan  
  • Engro finds major faults in LNG terminal agreement. Engro Elengy Terminal Pakistan Limited (EETL) has complained of nonfulfilment of at least 10 contractual obligations by the government and the SSGC 
  • EFOODS is selling its North American business including meat business company Al‐Safa Halal and Engro Foods Canada Limited
  • The government on Tuesday reduced petroleum products' prices up to PRs2.95/ltr, effective from Oct‐14. According to a notification issued by the government, petrol price has been reduced by PRs2.95/ltr, kerosene by PRs1.31/ltr, High Speed Diesel (HSD) by PRs0.95/ltr, Light Diesel Oil (LDO) by PRs0.67/ltr and High Octane Blending Component (HOBC) by PRs1.88/ltr
  • PSO’s receivables against various public sector entities, including power sector have swelled to PRs229bn and it is facing serious liquidity problems. Wapda, Hubco and Kapco together owes about PRs192bn of total receivables 
  • ECC of the cabinet on Thursday approved construction of 700km Gwadar‐Nawabshah pipeline to transport LNG
  • The book building of Saif Power brought another wave of optimism in the IPP sector as it was over‐subscribed by more than 3x, settling its strike price on the upper circuit
  • The correction witnessed in OGDC last week (‐3.76%) was also recovered, closing up 1.71% this week, as investors considered current price levels of the scrip attractive enough along with intentions of allocated participation in the SPO 
  • The Sindh government got another Chinese investment of USD130mn for setting up 50MW Wind Power Project near Gharo city
  • Textile margins likely to increase. A sharp decline in cotton prices in the 1QFY15 has jolted the value chain of the textile sector. It is gradually bringing the sector in the limelight as margins of textile companies are expected to increase in coming months


Top ten gainers of last week were: Habib Metro Bank, Pakistan Cables, Dawood Hercules Chem, Mari Petroleum, J.D.W.Sugar, Rafhan Maize Prod., Grays Of Combridge, Millat Tractors, Allied Bank and Fatima Fert.Co.

Top ten losers of last week were: Shifa International Hospitals, Hum Network Ltd, Muree Brewery Co Ltd, Shezan International Ltd., Thal Limited, Archroma Pakistan, Allied Rental Mod, Engro Foods Ltd, International Steels Ltd and Sui South Gas.

Top ten volume leaders were: BAFL, LPCL, AKBL, NBP, FCCL, EFERT, MLCF, NCL, DGKC, PTC, and UBL.

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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