Karachi Stock Exchange Weekly Analysis 23 November, 2014

The Karachi Stock Exchange (KSE) market momentum was bullish and continued to break records. The index eclipsed the 32K psychological barrier for the first time in history. KSE-100 index rose 150 points (0.5%) to close at 31,494 points. KSE – 30 index reached on 20,610 by gaining 81 points or 0.40 percent.

According to analysts, next week is expected to be positive due to more than one helpful variable. On the other hand it is a fact that revitalizing political conflict. The average traded daily volume during the week ticked at 259 million shares which showed a decrease of 8.48 percent WoW. Net foreign equity inflows were $ 4.81 million as compared to last week’s $10 million net inflow, a decrease of 52 percent WoW. The decrease in foreign inflows and average daily volumes is due to panic created in the market during the week. 

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

  • KSE-100 index managed to gain 150 points (↑0.5% WoW) during the week marred by heightened volatility. Trading activity remained flat WoW with average daily turnover of 168mn, close to last weeks’ average
  • Foreigners remained net buyers during the week, buying 4.8mn worth of shares relative to USD 10mn last week
  • Exuberance during the first half of the week, which was stimulated by SBP‘s decision to slash interest rates by 50bps, was cut short due to institutional selling in latter part of the week
  • LUCK led the resurgence and added 51.1 points to the index. However, anticipated NIM compression for banks in the backdrop of downturn in interest rate cycle kept the sector in check, with UBL in particular dragging the index by 63 points
  • Power sector receivables surge to Rs577bn
  • ECC approves 30pc hike in gas tariff
  • KASB bank and its subsidiary concerns being placed under a 6 month moratorium with a PkR300,000 transaction limit due to the parent bank’s inability to meet the SBP’s minimum capital requirement of PkR10bn
  • The situation was made worse due to the Securities and Exchange Commission of Pakistan suspending trading for one of the largest brokerage houses in the country, which created confusion and chaos in the market
  • The release of $1.1 billion by the IMF and the issuance of Sukuks amounting to $500 million by mid-December are expected to shore up the country’s foreign exchange reserves and stabilise the currency moving forwards
  • The cement sector was again in the limelight with the discount rate cut and weakening coal prices resulting in improved outlook for the sector
  • The banking sector took a hit after the rate cut prompted a sharp decline in PIB yields, which will result in lower net spreads for banks
  • The global oil prices continued to remain under stress, hence the government may continue to  reduce the oil prices which will eventually translate into lower inflation for the upcoming month
  • Government of Pakistan that it had achieved the target of ‘zero load‐shedding’ of electricity for all industries
  • Ghazi Fabrics International Limited, a listed company, has decided to set up 8.1MW heavy fuel oil based captive power plant at budgeted cost of PKR 130 million

Top ten gainers of last week were: Grays Of Combridge, Shezan International Ltd., Jah.Sidd. Co., Muree Brewery Co Ltd, Abbott Lab, Shifa International Hospitals, Sui South Gas, Jubilee Life Ins, Searle Pak and Sui North Gas Pipe.

Top ten losers of last week were: Archroma Pakistan, Pak Tobacco Co, Hum Network Ltd, B.O.Punjab, Bata (Pak) Ltd., Nishat Chunian, ICI Pakistan, Thal Limited, Atlas Honda Limited and Avanceon Ltd.

Top ten volume leaders: JSCL, MLCF, DGKC, EFERT, ENGRO, LPCL, HUMNL, AICL, BOP, PTC,  and FABL.

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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