Karachi Stock Exchange Weekly Analysis 5 July, 2015

The Karachi Stock Exchange (KSE) market made a comeback with a bang as low inflation numbers along with improved macroeconomic numbers helped the benchmark KSE-100 index climb a whopping 1,571 points (4.6%) to close at a new all-time high of 35,456.. KSE-100 index closed on 35,456 by gaining 1,571 points or 4.64% while KSE-30 index closed on 22,313  by gaining 1107 points or 5.22%.

While average daily volumes remained flat at 355.7 million shares traded per day, average daily values rose sharply by 19.9% and stood at Rs13.2 billion per day, reflecting higher interest in blue-chip stocks. The Karachi Stock Exchange’s market capitalisation stood at Rs7.60 trillion ($73.6 billion) at the end of the week.

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

  • Politics took a backseat while IMF’s approval for the next tranche and record high foreign exchange reserves also contributed to the positive sentiment at the bourse
  • The biggest news of the week was the announcement of the inflation figures for the month of June 2015 which clocked in at 3.16%, well below the market consensus of 4%. Inflation figures for the complete fiscal year 2015 stood at only 4.35%, which was an 11-year low
  • Approval of the 7th installment of US$506mn under the EFF raising FOREX reserves to an all‐􀆟me high of US$18.5bn
  • The market recovered the lost momentum during the week, despite the prevailing uncertainties over Greek crises which has pushed down global equity markets and slide in international oil prices
  • Finance Act 2015 was signed by the President, imposing sales tax, FED and income tax as proposed, while a transaction tax on Bank transactions for non‐filers was imposed
  • Market sentiment was further improved by the continuously improving macroeconomic situation of the country
  • The latest figures revealed the country’s foreign exchange reserves crossed $18.5 billion to hit a new record high
  • Furthermore, the IMF approved the eighth tranche to Pakistan which will further improve the forex reserves in the coming weeks
  • The banking sector was the standout performer after weeks of underperforming. The sector contributed 434 points to the index’s gains with MCB Bank leading the way with a weekly gain of 12.3%
  • The cement sector, the darling of the market in recent times, continued its impressive performance on the back of impressive sales figures and in anticipation of further growth on increased public spending. The sector contributed 322 points to the index’s gains with all major manufacturers posting nearly double-digit growth during the week
  • The fertiliser sector also continued to perform strongly after the government decided to postpone the July 1 implementation of the gas tariff hike due to Ramazan. The sector contributed 231 points to the KSE-100’s gains with Engro Corporation climbing 7.2% during the week
  • Foreigners offloaded a net of $3.6 million during the week, following up on the $16.1 million selling in the previous week
  • OGRA imposed a PkR17.8mn fine on five OMCs for not maintaining adequate stocks of POL products causing the supply crisis of Jan'15
  • FBR failed to meet its thrice revised revenue collection target of PkR2.60trn, collecting PkR2.58trn implying a shortfall of PkR25bn
  • PRL continued to move north, gaining 3.1% in the course due to initiation of isomerization plant which will double petrol output to 24k tons and Supreme Court’s decision in the favor of HUBCO (PkR1.9bn) had unlock the stock’s appreciations
  • OGRA has reportedly raised objections over 4% margins for PSO on import of LNG
  • SBP injected PKR667.8bn into the banking system to meet the liquidity gap emerged after heavy government borrowing from the banks. The central bank injected PKR624.8bn for 7‐days and Rs43bn for four days, with rate of return at 6.51% and 6.50%, respectively
  • GTYR is building a new mixing plant facility at a cost of USD10mn
  • SNGPL has awarded PKR2.537bn contracts to CSAP for the supply of bare pipes
  • Nepra gives KEL no clean chit. Nepra in its preliminary report prepared accused K‐Electric of not making appropriate investment in transmission and distribution systems due to which service quality, reliability and supply to consumers was seriously affected. When KEL injected 2500‐2700MW electricity, its transmission and distribution system could not sustain it which resulted in tripping and breakdown 

Top gainers of last week were: Punjab Oil, Bannu Woollen, Jah.Sidd. Co., Service Indus, TRG Pakistan Ltd, MCB Bank Ltd, Lafarge Pakistan, Maple Leaf Cem., Hum Network Ltd and Kohinoor Textile.
Top losers of last week were: Muree Brewery Co Ltd, Nestle Pakistan, Colgate Palmolive, EFU Life Assur Ltd., Orix Leasing, Nishat Chunian Power, Jubilee Life Ins, Rafhan Maize Prod., Pak Suzuki Motor and Pak Services.

Top ten volume leaders: KEL, JSCL, FCCL, TRG, PIBTL, PAEL, LPCL, PTC, SNGP, BOP and FFBL.

Following are few BUY recommendations:

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 436.9
Target Price: PKR 552.00

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 40.7 
Target Price: PKR 50.7

Engro Fertilizers Limited (EFERT) – BUY
Current Price: PKR 92.57
Target Price: PKR 103.2

Engro Corporation (ENGRO) – BUY
Current Price: PKR 312
Target Price: PKR 338

Engro Foords (EFOODS) – BUY
Current Price: PKR 156
Target Price: PKR 177.8

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 183.5
Target Price: PKR 238.2 

Pak Oilfields (POL) – BUY
Current Price: PKR 404.4
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 167.84
Target Price: PKR 221.00

Pakistan State Oil (PSO) – BUY
Current Price: PKR 400
Target Price: PKR 493

K-Electric Co. (KEL) – BUY 
Current Price: PKR 8.3
Target Price: PKR 13.3

Nishat Mills (NML) – BUY
Current Price: PKR 120.0
Target Price: PKR 168.5 

Allied Bank Limited (ABL) – BUY
Current Price: PKR 100.0
Target Price: PKR 140.0 

National Bank (NBP) – BUY
Current Price: PKR 54.2
Target Price: PKR 69.0

Habib Bank Limited (HBL) – BUY
Current Price: PKR 213.35
Target Price: PKR 270

United Bank Ltd (UBL) – BUY
Current Price: PKR 175.45
Target Price: PKR 194.00

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 25.78
Target Price: PKR 34

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 44.47
Target Price: PKR 68

Lucky Cement (LUCK) – BUY
Current Price: PKR 557.68
Target Price: PKR 652.00

MCB Bank Ltd (MCB) – BUY
Current Price: PKR 269
Target Price: PKR 320

Following are few SELL recommendations:

Fauji Fert. Bin Qasim Ltd. (FFBL) – BUY
Current Price: PKR 58.1
Target Price: PKR 49.00

Hub Power Co (HUBCO) – SELL
Current Price: PKR 98.53
Target Price: PKR 71.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 59.61
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 59.36
Target Price: PKR 43 

Pakgen Power Ltd (PKGP) – SELL
Current Price: PKR 30.00
Target Price: PKR 24

Indus Motor (INDU) – SELL
Current Price: PKR 1259.91
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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