Karachi Stock Exchange Weekly Analysis 28 February, 2015

The Karachi Stock Exchange (KSE) market seems to have reached a point of saturation whereby investors await triggers before taking any fresh positions. KSE-100 index closed on 33,632 by losing -361 points or -1.06% while KSE-30 index closed on 21,917 by losing -222 points or -1.01%.

ADTO fell further 19% WoW to 172mn shares, in line with 22% decline in ADV to US$89mn. FIPI turned sour again, recording an outflow US$9.8mn this week vs US$9.3mn injected previous week.

According to experts of http://www.karachistockexchange.org, following news have played vital role in Karachi Stock Market index movement:

  • Cements continued to dwindle during the week as investors resorted to profit taking with the results for companies in this sector being largely in line with market expectations
  • The Fauji twins were catapulted into a new ascent as the group’s diversification drive continues to exalt the market
  • The last leg of the week saw results of banking stalwarts whereby NBP’s payout failed to stir any major ripples in the stock’s price
  • Rabi season: Government likely to import 0.37m tons of urea
  • Shortage of liquidity forced the SBP to inject PKR722bn into the banking system
  • Exports of textile and clothing surged to USD1.207bn in January 2015 compared to USD1.095bn a year ago, an increase of 10.23%, the growth in export proceeds rebounded after witnessing a negative growth of over 6% in Dec 2014, thanks to improved supply of gas and electricity to the sector 
  • Withholding tax exemption on capital gains for foreigners withdrawn
  • The NA Standing Committee approved the amended GIDC bill, 2014, to give a legal cover to the PKR95bn revenue collection target
  • OGRA recommended on up to 15% increase in prices of petroleum products and 7.3% cut in HSD for March
  • Worth PkR2.3bn worth of liquidity being drained by Mughal IPO
  • Fertilizer sector gaining 15%+CYTD as existing investors opt for sector rotation
  • Following the relative bottoming out of global oil prices, retail fuel prices in Pakistan expected to be increased by 2.9% in the coming month coupled with possible imposition of regulatory duty on import of petrol and diesel (5% RD imposed on FO)
  • Foreign reserves for the week ended 20th Feb’15 slipped 1% to US$15.94bn mounting pressure on the exchange rate as the US$ crossed PkR102 in the open‐market
  • Prime Minister Nawaz Sharif has refused to give the nod to the proposed increase in gas tariff by 10% to 65% and deferred the plan until April 2015, despite warnings of the financial collapse of gas utilities 
  • To protect local farmers, the National Assembly (NA) Standing Committee on National Food Security and Research has urged the government to impose 100% duty on the import of dry milk by multinational companies 
  • Pakistan Telecommunication Authority (PTA) has now ended fix rate of US¢8.5 on all incoming foreign calls and issued a notification of giving an immediate end to the International Clearing House (ICH) charges 
  • Largely results during the week were in line with consensus expectations (including results of NPL, NML, NCPL, UBL, and BAFL) with a few misses (most notably NBP which was marred by higher-than-expected provisioning)

Top gainers of last week were: Indus Motor, Colgate Palmolive, Muree Brewery Co Ltd, Fauji Fert Bin, Pak Tobacco Co, Faysal Bank, Hum Network Ltd, Fauji Fertilizer Co., Nishat Power Ltd and EFU General Ins

Top losers of last week were: Grays Of Combridge, Pace (Pak) Ltd., Pakgen Power Ltd., Shezan International Ltd., Archroma Pakistan, Bata (Pak) Ltd., Pakistan Cables, NIB Bank, Kohat Cement and Gul Ahmed.

Top ten volume leaders: JSCL, KEL, MLCF, BOP, FFBL, NBP, ENGRO, EFERT, LPCL, FCCL and DGKC.

Following are few BUY recommendations:

Fatima Fertilizer (FATIMA) - BUY
Current Price: PKR 37.35
Target Price: PKR 43

Kot Addu Power Co (KAPCO) – BUY 
Current Price: PKR 84.01
Target Price: PKR 97.0

Oil & Gas Development Co. (OGDC) – BUY 
Current Price: PKR 211.15
Target Price: PKR 256.5

Pak Oilfields (POL) – BUY  
Current Price: PKR 369.00
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY 
Current Price: PKR 172.57
Target Price: PKR 221.00

Attock Petroleum (APL) - BUY
Current Price: PKR 534.69
Target Price: PKR 626.00

Allied Bank Limited (ABL) – BUY 
Current Price: PKR 108.50
Target Price: PKR 140.0

Habib Bank Limited (HBL) – BUY 
Current Price: PKR 203.71
Target Price: PKR 262.00

Bank Al-Falah (BAFL) – BUY 
Current Price: PKR 31.66
Target Price: PKR 39

Bank Al-Habib (BAHL) – BUY 
Current Price: PKR 50.03
Target Price: PKR 68.00

United Bank Ltd (UBL) – BUY 
Current Price: PKR 168.8
Target Price: PKR 210.0

Cherat Cement (CHCC) - BUY
Current Price: PKR 73.57
Target Price: PKR 95.00

DG Khan Cement (DGKC) – BUY 
Current Price: PKR 122.7
Target Price: PKR 153.5

Maple Leaf Cement Factory (MLCF) – BUY 
Current Price: PKR 53.5
Target Price: PKR 68.0

Pak Suzuki (PSMC) - BUY
Current Price: PKR 425.40
Target Price: PKR 495

Nishat Mills (NML) - BUY
Current Price: PKR 124.0
Target Price: PKR 163.5

Following are few SELL recommendations:

Hub Power Co (HUBCO) – SELL
Current Price: PKR 88.82
Target Price: PKR 71.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 51.47  
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 52.16
Target Price: PKR 43

Pakgen Power Ltd. (PKGP) – SELL
Current hn6Price: PKR 31.06
Target Price: PKR 24.00

Thank you very much for reading this article.

NOTE: The information posted in this blog /forum (http://www.karachistockexchange.org/) 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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