Karachi Stock Exchange Weekly Analysis 14 December, 2014

The Karachi Stock Exchange (KSE) market was largely volatile during the week, falling 1% WoW to 31,589 points, as political unrest in the country turned investors cautious. KSE-100 index closed on 31,590 by losing -559 points or -1.74%, while KSE – 30 index closed on 20,541 by losing -277 points or -1.33%.

ADTO fell 32% WoW to 238mn shares. Average daily value traded fell 25% WoW to US$126mn. Foreign investment outflow jumped to US$24mn this week compared to US$1.8mn last week.

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

  • The week was dominated by political events with PTI’s move to close down the major cities in the country turned violent. Government’s offer to protesting party of unconditional negotiations eased concerns
  • The government is likely to pay the protesting IPPs from the privatization proceeds
  • FFBL to invest multibillion rupees in new businesses Fauji Fertilizer Bin Qasim Limited (FFBL) has incorporated three wholly-owned subsidiaries: (1) Fauji Meat Limited to establish a slaughterhouse for the halal slaughtering of animals and for the sale of meat products in domestic and foreign markets; (2) Fauji Foods Limited to venture into the dairy foods and allied products business; and (3) FFBL Power Company Limited to set up 118-megawatt coal-fired generation plant at Port Qasim in the vicinity of the company’s existing fertilizer plant
  • Mari Petroleum Company Limited (Mari) disclosed on Wednesday that the Economic Coordination Committee (ECC) of the Cabinet had approved the proposal for dismantling of the company’s Gas Pricing Agreement (GPA) and its replacement with market related formula
  • Oil stocks went deeper into the red due to declining oil prices in international market
  • The government decided to reorganize the power consumer slabs (introducing a 301-500KWh per month category) and announced to reduce tariff by 20% for the new slab
  • PM Sharif announced a PkR2.32/unit cut in the consumer electricity tariff, and announced upcoming cuts in POL prices on account of international oil prices hiting 5‐year lows
  • Engro Corp announced it is considering a secondary offering of up to 10% of its stake in Engro Fertilizer
  • SBP set it’s inflation expectations between 7.5% and 8.5% for FY15
  • ECC of the Cabinet headed by FM snubbed the top brass of PIA for seeking an amount much greater than $52 million to be paid for aircraft to be acquired on a dry lease
  • Government of Pakistan and ADB have signed loan and project agreements amounting to USD150mn dollars for the Loan No 3159/3160: Trimmu and Panjnad Barrages Improvement Project
  • Saudi Arabia slashed its oil prices for Asian and US buyers, in a move some analysts said shows it is stepping up its battle for market share a week after refusing to support OPEC output cuts
  • K-Electric has submitted a request to NEPRA to reduce 74 paisa/unit on account of monthly fuel cost adjustment for October, 2014
  • International Oil prices drop below $60 a barrel
  • Forex reserves rise to $13.92 billion
  • Silkbank achieves 10% CAR
  • PSO resumes fuel supply to PIA
  • Sindh seeks to raise professional tax rate to Rs 0.5 million

Top gainers of last week were: Kohinoor Textile, Shezan International Ltd., D.G.K.Cement, Maple Leaf Cement, Kohat Cement, Avanceon Ltd, Century Paper, Cherat Cement, B.O.Punjab and Lucky Cement.

Top losers of last week were: Abbott Lab, Searle Pak, Mari Petroleum, ICI Pakistan, Pak Tobacco Co, GlaxoSmithKline Pak., Pak Oilfields, EFU Life Assur Ltd., Hum Network Ltd and Nishat Power Ltd.

Top ten volume leaders: BOP, KEL, MLCF, DGKC, FCCL, TRG, PIOC, JSCL, AICL, ENGRO and LPCL.

Following are few BUY recommendations:

Engro Polymer Chemicals (EPCL) - BUY
Current Price: PKR 12.5
Target Price: PKR 16.5

Fatima Fertilizer Co (FATIMA) – BUY
Current Price: PKR 32.4
Target Price: PKR 40.9

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 213.4
Target Price: PKR 302.1

Pak Oilfields (POL) – BUY
Current Price: PKR 391.8
Target Price: PKR 612.6

K-Electric Limited (KEL) – BUY
Current Price: PKR 8.4
Target Price: PKR 12.1

United Bank Ltd (UBL) – BUY
Current Price: PKR 172.1
Target Price: PKR 225.0

Engro Corp. Ltd (ENGRO) – BUY
Current Price: PKR 213.07
Target Price: PKR 245.0

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 177.92
Target Price: PKR 221.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 207.38
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 30.63
Target Price: PKR 36.00

Following are few SELL recommendations:

Kot Addu Power Co (KAPCO) – SELL
Current Price: PKR 76.13
Target Price: PKR 58.0

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 45.87
Target Price: PKR 38.00

National Bank (NBP) – SELL
Current Price: PKR 66.79
Target Price: PKR 53.00

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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