Karachi Stock Exchange Weekly Analysis 8 June, 2015

The Karachi Stock Exchange (KSE) market continued to climb upwards as investors went on a buying spree ahead of the budget announcement, resulting in the benchmark KSE-100 index gaining 955 points (2.9%) to close above the 34,000-point barrier during the week ended June 5. KSE-100 index closed on 34,012 by gaining 955 points or 2.89% while KSE-30 index closed on 21,563 by gaining 584 points or 2.78%.

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

  • The budget was finally announced on Friday and confirmed fears of a hike in the capital gains tax and the introduction of CGT on shares held for more than 2 years
  • Towards the end of the week, the budget was announced by Finance Minister Ishaq Dar and is likely to have a negative impact on the market in the coming week
  • Taxation measures on larger companies and banks in particular are surely going to be negatively received by investors
  • The week started off on a positive note as inflation numbers for May 2015 were revealed, clocking in at 3.16%
  • The banking and cement sectors were the star performers of the week. Investors flocked to the banking sector which had taken a beating following the discount rate cut announcement. The sector contributed 270 points to the KSE-100’s gains with United Bank, Habib Bank and MCB Bank leading the way
  • The cement sector continued to benefit from news flows regarding the hike in the public sector development budget and impressive sales figures for May. The sector contributed 166 points to the KSE-100’s gains
  • Cements will be a key beneficiary where high allocations to development expenditure (PSDP expenditure up 29%YoY to PkR700bn) and CPEC infrastructure projects, if materialized will boost demand
  • Foreigners made a resounding comeback to the bourse and mopped up a net of $23.5 million worth of equity. The buying was a welcome change after foreigners had offloaded $6.8 million worth of equity in the previous week
  • CPI based inflation for the month clocked in at 3.16%YoY (10MFY15 avg. at 4.6%YoY), higher than 2.11%YoY seen in Apr’15, a trend expected to continue on the back of rising food prices in Ramadan season
  • Increased prices of petroleum products by up to PkR3.5/ltr for the month of Jun'15, pushing the new petrol price to PkR77.8/ltr
  • Nepra approved a refund of PkR2.08/unit to consumers overcharged by power Discos in Mar'15 under the monthly fuel price adjustment mechanism
  • Auto Policy: Import of used cars to be made transparent: Dastgir
  • Power utility KEL sells PKR22bn sukuk
  • PPL ‘Sui Mining’ production extended
  • HBL nears buying NIB asset Management Company for PKR4.1bn
  • The fund, sponsored by Arif Habib REIT Management Ltd, is a component of The Harbour Front office building complex and Dolmen City Mall. The scheme is a listed closed‐end fund launched under the REIT Regulations 2015.The fund size is PKR22.2bn; 75% of it (valuing PKR16.7bn) would be offered to strategic investors and high net worth individuals and the IPO portion would be PKR4.2bn of which 75% would be offered through book building process and PKR1.4bn or 25% in IPO to the general public
  • Cement exports fall 26.13% to 0.56mn tons in May

Top gainers of last week were: TRG Pakistan Ltd, Kohinoor Textile, Muree Brewery Co Ltd, Colgate Palmolive, Indus Dyeing, Maple Leaf Cem., EFU Life Assur Ltd., Bannu Woollen, Searle Pak and Nishat Chunian.
    
Top losers of last week were: Pak Tobacco Co., Hum Network Ltd, Atlas Honda Limited, National Foods, Rafhan Maize Prod., Packages Limited, Attock Petroleum, P.T.C.L.A, Punjab Oil and Meezan Bank.

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

Following are few BUY recommendations:

Lucky Cement (LUCK) – BUY
Current Price: PKR 483.5
Target Price: PKR 552.00

DG Khan Cement (DGKC) – BUY
Current Price: PKR 135.42
Target Price: PKR 162

Cherat Cement (CHCC) - BUY
Current Price: PKR 80.39
Target Price: PKR 95.00 

Engro Foods Limited (EFOODS) – BUY
Current Price: PKR 137.9
Target Price: PKR 177.8

Engro Fertilizers Limited (EFERT) – BUY
Current Price: PKR 87.4
Target Price: PKR 103.2

Fauji Fert. Bin Qasim Ltd. (FFBL) – BUY
Current Price: PKR 49.4
Target Price: PKR 62.4

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 39.0
Target Price: PKR 50.7

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 187.5
Target Price: PKR 238.2 

Pak Oilfields (POL) – BUY
Current Price: PKR 389.7 
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 170.36 
Target Price: PKR 221.00

Attock Petroleum (APL) – BUY
Current Price: PKR 539.92
Target Price: PKR 626

K-Electric Co. (KEL) – BUY 
Current Price: PKR 8.1
Target Price: PKR 13.3

Pakistan Telecommunication (PTC) – BUY
Current Price: PKR 20.6
Target Price: PKR 25.1

Nishat Mills (NML) – BUY
Current Price: PKR 113.9
Target Price: PKR 168.5 

Nishat Chunian Ltd. (NCL) – BUY 
Current Price: PKR 35.1
Target Price: PKR 45.7

Allied Bank Limited (ABL) – BUY
Current Price: PKR 102.5
Target Price: PKR 140.0 

Habib Bank Limited (HBL) – BUY
Current Price: PKR 209.10 
Target Price: PKR 270

MCB Bank Ltd (MCB) – BUY
Current Price: PKR 272.79
Target Price: PKR 320

National Bank (NBP) – BUY
Current Price: PKR 55.0
Target Price: PKR 69.0

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

Bank Al‐Falah (BAFL) – BUY
Current Price: PKR 26.47
Target Price: PKR 34

Bank Al‐Habib (BAHL) – BUY
Current Price: PKR 42.60
Target Price: PKR 68

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 55.14   
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 61.18
Target Price: PKR 43 

Pakgen Power Ltd (PKGP) – SELL
Current Price: PKR 30.75
Target Price: PKR 24

Maple Leaf Cement (MLC) – SELL
Current Price: PKR 77.12
Target Price: PKR 65

Indus Motor (INDU) – SELL
Current Price: PKR 1279.30
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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