Karachi Stock Exchange Weekly Analysis 21 March, 2015

The Karachi Stock Exchange (KSE) market remained in the red zone for the entire week – the fourth consecutive negative week. KSE-100 index closed on 31,800 by losing 1129 points or -3.43% while KSE-30 index closed on 20,227 by losing 973 points or -4.59%.
ADTO was flat WoW at 142mn shares, while ADV was up by 3.5% to US$83mn. FIPI registered yet another net out-flow of US$23mn vs last week’s out-flow of about US$28mn.

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

  • State Bank of Pakistan has announced monetary policy, cuts key rate by 50 bps to 8 pc. Which is all time low since 13 years
  • Bank stocks declined 7.9% during the week on the news that a target interest will be introduced and interest rate will come down in the upcoming monetary policy meeting
  • Foreigners sold shares valuing US$67.5mn and bought US$43.6mn with net selling of US$23.9mn
  • The ECC, in its meeting on Saturday, allowed Attock Cement Pakistan Limited (ACPL) to remit US$24mn, for establishment of Cement Grinding Unit in Basra (Iraq), on account of equity investment starting from March 2015 onwards
  • Govt imposes 25% regulatory duty on import of wheat, related products
  • Cement sector, most notably, suffered from a weak outlook emanating from the impending gas price hike
  • Lucky is expected to be a major loser also because of an unfavorable verdict in South Africa cement dumping case
  • An unexpected twist in Fecto Cement’s long‐drawn legal challenge regarding environmental degradation has created major downside risks
  • The Privatization Commission and Commerce Ministry voiced concerns over the import of 3‐yr old cars, which may pave the way for increased duty on imported cars
  • NEPRA approved the longpending coal conversion of K‐Electric
  • ECC approved a proposal for allocation of gas from TAPI pipeline to the SNGPL
  • SNGPL resumed gas supply to the textile sectors after three months
  • Lower crude oil prices did push the oil stocks lower with POL leading from the front with 11.7% decline, OGDC 9.3% and PPL 9.4% from the onset of calendar year
  • The LPCL deal is likely to complete soon whereby investors are likely to receive liquidity of PKR3.5bn, hence we can conclude number of investors would be willing to invest their funds back in the market
  • The government is likely to impose 15% regulatory duty on import of HR products as well as pipes and fixed sales tax at the rate of PKR5,600/metric ton on supply of billets and import of rerollable scrap for providing level playing field to the local industry
  • Pakistan has signed an agreement with Qatar on the import of LNG and the first shipment of 200mmcfd is expected to reach by the end of March 2015; however, the terms of the agreement have not yet been made public
  • Pharma sector all set to plan consolidation, expansion of business
  • Cotton output raises 10.6% to 14.8m bales
  • Government of Pakistan has decided to open branches of NBP in Azerbaijan in order to further expand economic ties
  • Pakistan has firmly stated that lifting the moratorium on death penalty would not impact the much coveted GSP plus status
  • CA figures for Feb’15, that included a surplus of US$877mn, reducing the 8MFY15 CA deficit to US$1.61bn
  • Country’s reserves reaching US$16.27bn for the week ended 13 Mar’15, of which the SBP held US$11.26bn
Top gainers of last week were: Hub Power, Kot Addu Power Co., Lafarge Pakistan, Colgate Palmolive, Atlas Honda Limited, Fauji Fertilizer Co., Meezan Bank, Maple Leaf Cem., Pioneer Cement and Nishat Power Ltd.

Top losers of last week were: Pak Services, Netsol Technologies, Jah.Sidd. Co., Pak Suzuki Motor, Askari Bank Ltd., Adamjee Ins, Allied Rental Mod, Faysal Bank, Pakgen Power Ltd. and PICIC Growth.

Top ten volume leaders: MLCF, JSCL, FCCL, BOP, ENGRO, TRG, KEL, FFBL, PTC, DGKC and NIB.

Following are few BUY recommendations:

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 187.85
Target Price: PKR 256.5

Pak Oilfields (POL) – BUY
Current Price: PKR 335.36
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 159.84
Target Price: PKR 221.00

Allied Bank Limited (ABL) – BUY
Current Price: PKR 98.10
Target Price: PKR 140.0

Habib Bank Limited (HBL) – BUY
Current Price: PKR 190.16
Target Price: PKR 255.0

MCB Bank Ltd (MCB) – BUY
Current Price: PKR 251.09
Target Price: PKR 295.00

National Bank (NBP) – BUY
Current Price: PKR 56.05
Target Price: PKR 72.00

United Bank Ltd (UBL) – BUY
Current Price: PKR 148.07
Target Price: PKR 194.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 27.00
Target Price: PKR 39.00

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 44.54
Target Price: PKR 68.00

Cherat Cement (CHCC) - BUY
Current Price: PKR 78.16
Target Price: PKR 95.00

Lucky Cement (LUCK) – BUY
Current Price: PKR 480.6
Target Price: PKR 583.3

Maple Leaf Cement Factory (MLCF) – BUY
Current Price: PKR 54.5
Target Price: PKR 61.0

Pak Suzuki (PSMC) – BUY
Current Price: PKR 399.35
Target Price: PKR 495.00

Fatima Fertilizer (FATIMA) - BUY
Current Price: PKR 41.0
Target Price: PKR 51.7

Nishat Mills (NML) - BUY
Current Price: PKR 113.3
Target Price: PKR 163.5

Kot Addu Power Co (KAPCO) – BUY
Current Price: PKR 81.2
Target Price: PKR 97.0

Following are few SELL recommendations:

Hub Power Co (HUBCO) – SELL
Current Price: PKR 89.45
Target Price: PKR 71.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 51.13
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 50.96
Target Price: PKR 43

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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