Karachi Stock Exchange Weekly Analysis 17 January, 2015

The Karachi Stock Exchange (KSE) market remained upbeat for a 4th consecutive week. KSE-100 index closed on 33,786 by gaining 461 points or 1.39% while KSE-30 index closed on 21,799 by gaining 179 points or 0.83%.

ADTO rose 12.2% WoW to 331.5mn shares. Average daily value traded dipped 4.2% to US$147.1mn. FIPI witnessed an inflow of US$17.6mn, compared to outflow of US$6.1mn last week.

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

  • The main stories being a mild recovery in oil stocks and exultant sentiments on Macro’s
  • Average volumes registered an uptick of 12% W/W as jobbers propelled interest in penny plays with activity concentrated in JSCL, TRG, BOP and KEL
  • Financials came in limelight with the sector adding 210 points to the index. MCB emerged as the standout winner in the sector, rising by 4.8% while UBL gained 3.5%. Oils on the other hand which were gainers last week turned laggards with the sector shedding 228points
  • Cement stocks were seen under pressure earlier in the week as rumors of a price cut prompted investors to take profits, while they recovered in the later half amid clarity regarding prices being unchanged
  • In the outgoing week EFOODS showed buoyancy driven by anticipation of a spike in its margins and the company’s consolidation drive with its focus strategy bearing fruit
  • ENGRO marched further into green amid euphoric sentiments centered on finance cost savings in the wake of monetary easing and bright prospects of LNG and fertilizer business
  • KEL was back in action on the last trading day of the week after an in‐principle approval of an extension in the supply of 650MW electricity from WAPDA
  • PIAA gathered steam in the week led by lower fuel costs which may translate into an improved bottom‐line
  • Alpha hunters and value seekers were active in banking plays as payout expectations propelled UBL and NBP
  • Foreign investors were net buyers during the week showing interest in FMCG’s as an overall inflow of USD10.9mn was recorded, taking the tally for the month to a negative US$ 8.75 million
  • ECC of the Cabinet has approved a sovereign guarantee for issuance of PKR25bn TFC for power distribution companies from a consortium of commercial banks
  • The freefall in oil prices is likely to help the national flag carrier Pakistan International Airlines save more than PKR 25 billion this year, a company’s
  • In the outgoing week the Rupee lost some ground against the greenback as the FX reserves held at SBP dialed in at US$ 10.365 billion showing a dip of US$ 111 million
  • Saudi Arabia has shown its willingness to supply crude oil to Pakistan at a subsided rate of US$40/bbl
  • Remittances rise by 15% to US$
  • Engro Fertilizers converts IFC loan into equity
  • Consumers are expected to get a relief of about PRs3.0/KWh in power tariff next month for braving extensive load shedding last month
  • The central bank would unveil its much awaited Monetary Policy Statement (MPS) on Jan‐24
  • High dividend yield scrips like FFC (up 2.2% WoW) and HUBCO (up 4.6% WoW) continued to witness strong investor interest
  • The govt approved to impose a 15% regulatory duty on the import of steel products which triggered a rally in the local steel manufacturers
  • Corolla continued to be the stand out performer with INDU clocking in 51% YoY growth during 1HFY15
  • PSO held steady with the govt releasing PRs17.5bn to the company which helped defy rising expectations of inventory losses in 2Q
  • ECC approves three surcharges on power tariff
  • Duty imposed on Mobile Set and Steel products
  • Agreement of Pakistan and China to enter into the second round of Free Trade Agreement (FTA), aimed to address reservations of Pakistan

Top gainers of last week were: Pakistan Cables, Shifa International Hospitals, Arif Habib Corp, Hum Network Ltd, Dawood Hercules Chem, National Foods, Kohinoor Textile, Jah.Sidd. Co., Attock Petroleum and Avanceon Ltd.

Top losers of last week were: P.T.C.L.A, Pak Petroleum, Pak Oilfields, Oil and Gas Deve, Soneri Bank, Jubilee Life Ins, Lafarge Pakistan, Engro Fertilizer, Packages Limited and Attock Cement Ltd.

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

Following are few BUY recommendations:

Fatima Fertilizer Co. (FATIMA) - BUY
Current Price: PKR 36.86
Target Price: PKR 43.00

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 207.97
Target Price: PKR 282

Pak Oilfields (POL) – BUY
Current Price: PKR 380.52 
Target Price: PKR 538.3

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 176.99 
Target Price: PKR 221

Allied Bank Limited (ABL) – BUY
Current Price: PKR 114.80 
Target Price: PKR 177.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 215.70 
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 33.74
Target Price: PKR 39

Engro Polymer Chemicals (EPCL) – BUY
Current Price: PKR 13.5
Target Price: PKR 16.5

Nishat Mills (NML) – BUY
Current Price: PKR 131.2
Target Price: PKR 163.5

Following are few SELL recommendations:

Hub Power Co (HUBCO) – SELL
Current Price: PKR 84.19
Target Price: PKR 71.00

Kot Addu Power Co (KAPCO) – SELL
Current Price: PKR 79.03
Target Price: PKR 58.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 45.00
Target Price: PKR 38.00

Pakgen Power Ltd. (PKGP) – SELL
Current Price: PKR 31.52
Target Price: PKR 24.00

National Bank (NBP) – SELL
Current Price: PKR 70.47
Target Price: PKR 53.00

Engro Corporation (ENGRO) – SELL
Current Price: PKR 246.0
Target Price: PKR 196.2

Dawood Hercules Limited (DAWH) – SELL
Current Price: PKR 113.5
Target Price: PKR 71.8

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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