Karachi Stock Exchange Weekly Analysis 20 December, 2014

The Karachi Stock Exchange (KSE) market fails to recover after terror strikes Peshawar. KSE-100 index closed on 31,011 by losing -579 points or -1.83%, while KSE – 30 index closed on 20,038 by losing -503 points or -2.45%.

The index ended up 2% down WoW to 31,011pts. ADTO fell further 15% WoW to 203mn shares, whereas average daily value traded showed 5% WoW decline to US$119mn. Blue chips stocks remained in the limelight. FIPI outflow increased by 25% WoW to US$30mn this week compared to US$24mn outflow seen last week.

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

  • The broader market witnessed a sharp decline mid-week, falling by 814pts, as gruesome terror events unfolded in Peshawar. Furthermore, continued foreign selling also kept most investors at bay. However, with PTI calling off country wide protests, index posted slight recovery towards the end of the week
  • PTI chairman calling‐off of the party’s street protests following the Peshawar tragedy
  • 50‐60 bps decline in 10yr PIBs’ secondary market yields hinting towards another DR cut in the Jan’15 MPS
  • Approval of US$1.1bn IMF tranche
  • Slashing of cement prices by a number of players throughout Pakistan, ranging from PkR5/bag to PkR23/bag
  • The index was further dragged down by weakening international oil prices with the E&P sector declining by 2.7% WoW. Financials also remained under pressure (-1.5% WoW) due to expectations of DR cut in next MPS announcement
  • Trading activity fell by 13% WoW, with average daily turnover clocking in at 138mn
  • For the fourth consecutive week, foreigners remained net sellers, selling USD30.1mn worth of shares
  • ABL transaction: government generates PKR14.4bn
  • Power sector receivables soar to PKR581.32bn
  • The government reinstated the capital punishment which was suspended due to the conditions laid by the EU for GSP plus status. The market participants however panicked when reinstating of capital punishment was announced, plunging the textile stocks
  • PM announces cut in power tariff by PRs2.32/KWh
  • The government is likely to reduce prices of the major petroleum products in the range of PRs5 to PRs15/ltr effective Jan 1, 2015 following a reduction in global fuel price which came down to US$60/bbl, Petroleum Ministry officials said
  • FDI rises 19.2% to $422mn for 5MFY14
  • Power sector receivables to Rs581.32bn
  • LPG price up by Rs5/kg
  • Interest on domestic debt exceeds Rs1 trillion
  • Investors remained focused on cement and banking sector as the cement industry is enjoying low coal prices, low power tariff, increase in demand and expected decrease in interest rate to further improve their bottom line
  • Underlying asset of govt’s Ijara Sukuk substituted
  • Researchers develop new method to diagnose cotton leaf curl virus
  • SBP has given green signal to two local banks for due diligence of KASB Bank for the proposed acquisition of the bank. According to information sent to KSE, the SBP has granted permission to AKBL and Sindh Bank Limited for initiating the due diligence of KASBB
  • Gadoon Textile okays merger with Fazal Mills
  • KEL briefs Dar on its USD3bn 3‐years investment plan
  • KEL considering selling shares to South Korean company
Top gainers of last week were: Shifa International Hospitals, Sui North Gas Pipe., Sui South Gas, Searle Pak, Pakistan Cables, Pioneer Cement, Habib Bank Ltd, Jubilee Gen Ins, K‐Electric and Muree Brewery Co Ltd.

Top losers of last week were: Grays Of Combridge, Mari Petroleum, Nishat Mills Limited, J.D.W.Sugar, Nishat Chunian, Pace (Pak) Ltd., Netsol Technologies, Archroma Pakistan, ICI Pakistan and Pak Tobacco Co.

Top ten volume leaders: BOP, KEL, MLCF, LPCL, JSCL, DGKC, FCCL, SNGP, PIOC, BAFL and SCBPL.

Following are few BUY recommendations:

Engro Polymer Chemicals (EPCL) - BUY
Current Price: PKR 12.4
Target Price: PKR 16.5

Fatima Fertilizer Co (FATIMA) – BUY
Current Price: PKR 32.8
Target Price: PKR 40.9

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 204.6
Target Price: PKR 302.1

Pak Oilfields (POL) – BUY
Current Price: PKR 370.1
Target Price: PKR 538.3

K-Electric Limited (KEL) – BUY
Current Price: PKR 8.7
Target Price: PKR 12.1

United Bank Ltd (UBL) – BUY
Current Price: PKR 163.1
Target Price: PKR 201.0

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 177.38
Target Price: PKR 221.00

Attock Petroleum (APL) – BUY
Current Price: PKR 519.28
Target Price: PKR 612.00

Allied Bank Limited (ABL) – BUY
Current Price: PKR 112.92
Target Price: PKR 177.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 215.13
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 30.64
Target Price: PKR 36.00

Following are few SELL recommendations:

Kot Addu Power Co (KAPCO) – SELL
Current Price: PKR 76.93
Target Price: PKR 58.0

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 45.75
Target Price: PKR 38.00

National Bank (NBP) – SELL
Current Price: PKR 65.15
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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