Karachi Stock Exchange Weekly Analysis 31 May, 2015

The Karachi Stock Exchange (KSE) market remained sluggish during the week as the market lost 433.58pts to close at 32,606 pts. KSE-100 index closed on 3 3,057 by gaining 451 points or 1.38% while KSE-30 index closed on 20,979  by gaining 209 points or 1.00%.

During the week, average daily volumes increased by 71% WoW to 186mn shares while average daily value rose 84% WoW to Rs9.6bn (US$94.1mn). Amongst key sectors, major gains were seen in Media 18%, Tobacco 11%, Paper & Board 10%, Household Goods 7%, Automobile & Parts 7%, General Industrials 4%, and Cement 4%. While major fall was seen in Beverages 5% and Commercial Banks 1%.

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

  • SBP announced a reduction in the policy rate by 100 basis points ‐ from 8% to 7% ‐ and introduced changes in interest rate corridor with a cut from 250 basis points to 200 basis points
  • The KSE‐100 index gained 1.38%WoW to close at 33,057pts because of reduction in DR by 100bps to 7.0%, and extended foreign interest in the market as portfolios re‐aligned according to the changes in weights in the MSCI FM index in its recent semi‐annual review, coming into effect from Jun’15
  • While the 100bps DR reduction was positive for leveraged sectors, banks came under pressure with the introduction of a new target rate, which will further limit their spreads
  • Proposed increase in CGT rates on shares
  • Dairy producers; with a possible shift from zero‐rated taxation to sales tax exempt regime, being negatively impacted (particularly EFOODS), if approved
  • Cements; with PSDP allocation estimated at PkR580bn, where a major chunk will go towards infrastructure projects (PkR132bn allocated to NHA) being beneficial for the sector
  • Nepra cuts PKR1.74/unit tariff for K‐Electric
  • GoP is considering the proposal to reduce import duties on hybrid vehicles to support low fuel consumption and environment in the country. The government had already provided 50 percent duty discount on hybrid vehicles from 1300cc to 2500cc
Top gainers of last week were: Hum Network Ltd, TRG Pakistan Ltd, Pak Tobacco Co., Indus Motor, Maple Leaf Cem., Pak Elektron, Kohinoor Textile, Honda Atlas Cars, Jah.Sidd. Co. and Cherat Cement\

Top losers of last week were: Punjab Oil, Shezan International Ltd, Service Indus, Bank AL‐Habib, National Bank of Pakistan, United Bank, Bank Al‐Falah, Faysal Bank, Allied Bank and Atlas Battery.

Top ten volume leaders: PAEL, FCCL, KEL, MLCF, PTC, BOP, JSCL, DGKC, HUMNL, PIBTL and HBL.

Following are few BUY recommendations:

Lucky Cement (LUCK) – BUY
Current Price: PKR 450.0
Target Price: PKR 552.00

DG Khan Cement (DGKC) – BUY
Current Price: PKR 129.09
Target Price: PKR 162

Cherat Cement (CHCC) - BUY
Current Price: PKR 76.76
Target Price: PKR 95.00 

Engro Corp Limited (ENGRO) – BUY
Current Price: PKR 278.53
Target Price: PKR 338

Engro Fertilizers Limited (EFERT) – BUY
Current Price: PKR 83.9
Target Price: PKR 103.2

Dawood Hercules Limited (DAWH) – BUY
Current Price: PKR 103.9
Target Price: PKR 125.4

Fauji Fert. Bin Qasim Ltd. (FFBL) – BUY
Current Price: PKR 47.8
Target Price: PKR 62.4

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 37.3    
Target Price: PKR 50.7

Engro Foods Limited (EFOODS) – BUY
Current Price: PKR 131.9
Target Price: PKR 177.8

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 184.7
Target Price: PKR 256.5 

Pak Oilfields (POL) – BUY
Current Price: PKR 388.1
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 169.79
Target Price: PKR 221.00

K‐Electric Co. (KEL) – BUY 
Current Price: PKR 7.6
Target Price: PKR 13.3

Pakistan Telecommunication (PTC) – BUY
Current Price: PKR 20.9
Target Price: PKR 25.1

Nishat Mills (NML) – BUY
Current Price: PKR 108.4
Target Price: PKR 168.5 

Nishat Chunian Ltd. (NCL) – BUY 
Current Price: PKR 32.3
Target Price: PKR 45.7 

Allied Bank Limited (ABL) – BUY
Current Price: PKR 101.0
Target Price: PKR 140.0 

National Bank (NBP) – BUY
Current Price: PKR 54.0
Target Price: PKR 72.00

United Bank Ltd (UBL) – BUY
Current Price: PKR 157.9 
Target Price: PKR 194.00

Following are few SELL recommendations:

Hub Power Co (HUBCO) – SELL
Current Price: PKR 97.03
Target Price: PKR 71.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 54.63    
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 60.86   
Target Price: PKR 43 

Pakgen Power Ltd (PKGP) – SELL
Current Price: PKR 29.50
Target Price: PKR 24

Indus Motor (INDU) – SELL
Current Price: PKR 1245.07
Target Price: PKR 1023.00

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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