Karachi Stock Exchange Weekly Analysis 29 March, 2015

The Karachi Stock Exchange (KSE) market shed an unusual 6% this week to close below psychologically important level of 30k.. KSE-100 index closed on 29,958 by losing 1842 points or -5.79% while KSE-30 index closed on 19,069 by losing 1158 points or - 5.73%.
   
Activity at the bourse picked up with average daily volumes clocking in at 126mn, up 32% WoW. Foreigners continued to remain sellers, offloading USD15mn worth of shares during the week. ADTO at 175mn shares was higher by 24% WoW, but ADV at US$70mn was 16% down WoW as bargain hunters refused to commit cash despite valuations opening up substantially. FIPI outflow at US$15.1mn for the week was down 37% WoW vs US$23.9mn outflow previous week.

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

  • After shedding 3.4% in the preceding week, KSE-100 index lost a staggering 5.8% (↓1,842pts) during the current week with bearish momentum strengthening at the bourse.
  • Selling was witnessed across the board with foreign and local institutional investors cutting hefty positions despite 50bp cut in policy rate over the weekend
  • Among the mainstream sectors, cements, chemicals and textiles led the decline, falling 8.9%, 7.7% and 7.7% WoW respectively. Despite reversal in international oil price, the oil and gas sector corrected by 3.8% WoW
  • The State Bank of Pakistan (SBP) announced a cut in key policy rate of 50 basis points (bps) from 8.5 percent to 8.0 percent
  • The Asian Development Bank (ADB) said on Tuesday Pakistan’s economy is showing signs for moderate growth of 4.2 per cent during this fiscal year (FY15) on the back of low international oil prices. And the government likely to miss 5.1pc growth target
  • Moody’s Investors Service on Wednesday upgraded Pakistan’s foreign currency government bonds rating from stable to positive. The rating is affirmed at Caa1
  • PIBs yields declined at an auction on Wednesday, showing bank’s persistent inclination to invest in the long-term government papers despite falling returns. SBP sold Rs46.472 billion of three-, five-, and 10-year PIBs. It sold Rs19.964 billion of 3-year paper at a cut-off yield of 8.29 percent, down 8.498 percent in the previous auction held on February 25
  • OGDCL has made a significant crude oil discovery with initial estimates of 1,095 barrels of oil per day at Palli field located in district Tando Allah Yar, Sindh
  • The govt has decided to withdraw tax exemptions worth PRs180bn or 0.5% of GDP, in budget of FY16 in a bid to lower the fiscal deficit
  • In a major boost to government’s privatization program, the Cabinet Committee on Privatization (CCoP) approved the strategic sale of 97% government’s stake in Heavy Electrical Complex (HEC) to Cargill Holding Ltd. The CCoP reportedly found the offer price to be in excess of reserved price for the deal, potentially resulting of net payment if PRs905mn
  • During week ended Mar 20th, foreign exchange reserves declined by US$142mn to US$16.13bn, where US$268mn debt repayments were made while US$114mn were received in the form of multilateral and bilateral loans
  • First LNG consignment arrived in the country this week with Universal Gas Distribution Company and Pak Arab Fertilizer importing 60k tons at a price of US$8/mmbtu
  • Nestle decided to reduce the price of Milk Pak to PRs110 from PRs120, previously, which is at par with Efoods’ Olpers

Top gainers of last week were: Pak Tobacco Co, Muree Brewery Co Ltd, Pakgen Power Ltd., Nishat Power Ltd, Nishat Chunian Power, Allied Rental Mod, Grays Of Combridge, Feroz 1888 Mills Ltd, Nestle Pakistan and Pak Services.

Top losers of last week were: B.O.Punjab, Packages Limited, Kohinoor Textile, Netsol Technologies, Pak Suzuki Motor, IGI Insurance, Bata (Pak) Ltd., D.G.K.Cement, Lafarge Pakistan and Cherat Cement.

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

Following are few BUY recommendations:

Fatima Fertilizer (FATIMA) - BUY
Current Price: PKR 37.25
Target Price: PKR 43.00

Engro Fertilizer (EFERT) - BUY
Current Price: PKR 75.12
Target Price: PKR 91.00

Fauji Fert. Bin Qasim Ltd. (FFBL) - BUY
Current Price: PKR 46.1
Target Price: PKR 62.4 

Kot Addu Power Co (KAPCO) – BUY
Current Price: PKR 77.71
Target Price: PKR 97.0 

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 182.14
Target Price: PKR 256.5 

Pak Oilfields (POL) – BUY
Current Price: PKR 321.65
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 152.00 
Target Price: PKR 221.00

Attock Petroleum (APL) – BUY
Current Price: PKR 520.12
Target Price: PKR 626.00

Allied Bank Limited (ABL) – BUY
Current Price: PKR 93.40
Target Price: PKR 140.0 

Habib Bank Limited (HBL) – BUY
Current Price: PKR 176.29
Target Price: PKR 255.0

MCB Bank Ltd (MCB) – BUY
Current Price: PKR 238.67
Target Price: PKR 295.00

National Bank (NBP) – BUY
Current Price: PKR 50.69
Target Price: PKR 72.00

United Bank Ltd (UBL) – BUY
Current Price: PKR 146.38
Target Price: PKR 194.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 25.53
Target Price: PKR 39.00

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 43.07
Target Price: PKR 68.00 

Lucky Cement (LUCK) – BUY
Current Price: PKR 447.14
Target Price: PKR 552.00

Cherat Cement (CHCC) - BUY
Current Price: PKR 68.53
Target Price: PKR 95.00 

Maple Leaf Cement Factory (MLCF) – BUY
Current Price: PKR 48.13
Target Price: PKR 61.0 

Pak Suzuki (PSMC) – BUY
Current Price: PKR 347.36
Target Price: PKR 495.00

Nishat Mills (NML) - BUY
Current Price: PKR 102.9
Target Price: PKR 163.5

Nishat Chunian Ltd. (NCL) - BUY
Current Price: PKR 38.1
Target Price: PKR 45.7

Following are few SELL recommendations:

Hub Power Co (HUBCO) – SELL
Current Price: PKR 85.59
Target Price: PKR 71.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 51.51
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 51.20
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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