Karachi Stock Exchange Weekly Analysis 2 Aug, 2015


SELL recommendations are FFBL, HUBCO, NPL, NCPL, PKGP and INDU

Top gainers of last week were: National Refinery, Attock Refinery Ltd., Jubilee Life Ins, Meezan Bank, Bannu Woollen, Sui South Gas, Honda Atlas Cars, Bata (Pak) Ltd., Fatima Fert.Co. and Pak Oilfields.
Top losers of last week were: TRG Pakistan Ltd, Rafhan Maize Prod., Jah.Sidd. Co., Ibrahim Fibres, Fauji Fert Bin, Jubilee Gen Ins, Maple Leaf Cem., Colgate Palmolive, Lafarge Pakistan and Engro Foods Ltd.

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

The Karachi Stock Exchange (KSE) market witnessed a downfall during the outgoing week as future rollovers and dismal corporate results kept trading under the selling pressure. KSE-100 index closed on 35,742 by losing -73 points or -0.21%, while KSE-30 index closed on 22,239 by gaining 48 points or -0.21%.

The trading activity slowed down considerably during the week with volumes averaging at 162 million shares, down by 27% week on week (WoW). The foreigners turned net buyers during the week, accumulating $3.03 million worth of shares compared to net selling of $7.9 million in the preceding week. According to analysts said the end of future rollover week along with expectations of low inflation numbers next week shall guide the index upwards while the ongoing earnings seasons is likely to keep the interest active in selective stocks.

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

  • The outgoing week at KSE saw higher volatility as rumours regarding the Securities Exchange Commission of Pakistan (SECP) taking notice of abnormal activity in the small cap stocks, created uneasiness in the market
  • The monetary policy announcement, disappointing earnings for the fertiliser sector and lower cement sales were the major setbacks for the bourse, while a recovery for the oil sector and continued strength of the banking sector were enough for the index to make up for lost ground.
  • The week started on a negative note as the index dipped sharply by 640 points on the back of future rollovers and resumption of the heavy decline in the Chinese stock market
  • The banks carried on its upward momentum from last week with the sector rising by 1.1% (+113pts)
  • The State Bank of Pakistan’s decision to keep the discount rate unchanged did not help matters as some market participants had expected a rate cut in the announcement
  • Oil staged a recovery during the week, inching up by 1.6% (+102pts) as full year dividend expectations got the investors excited despite continued bearish international oil price outlook
  • Cement names were seen under pressure for most part of week largely due to substantially depressed off-take amid strong floods and rains across the north region
  • SECP toughening reforms and initiating inquiries regarding specific heavily traded scrips, brokers and international NGO's
  • The refinery stocks were seen buzzing during the week piling up strong gains, driven by earnings excitement and upcoming capacity enhancements
  • Earnings season gained traction with Fauji Fertiliser Company (FFC) posting a profit and payout that was well below street estimates
  • The Oil and Gas Development Company’s (OGDC’s) new discovery in Chak-Naurang and short-term stability provided a temporary uptick to the sector, but failed to create a sizeable stir
  • On the other hand, Pakistan Oilfields Limited announced that it would reveal its full year earnings on August 13 which sparked a rally in the oil sector despite global crude oil prices sustaining low levels
  • Headway on a 15 year LNG supply contract with Qatar expected to be finalized by August
  • Senate Standing Committee was informed of legal proceedings being initiated against KEL regarding alleged mismanagement of its transmission system, while KEL informed the exchange of a US$400mn transmission rehabilitation agreement with Siemens and Shanghai Electric
  • K-Electric (KEL) given two weeks to submit reply to NERPA’s show cause notice
  • OGRA has forwarded recommendation decreasing POL product prices, in line with global prices
  • Oil imports fall 21%YoY to US$14.86bn in FY15
  • Total liquid FOREX reserves amounted to US$18.54bn for the week ended July'24, reflecting a decline of US$157mn on account of external debt servicing
  • Pakistan-IMF talks on eighth review begins
  • Pakistan receives US$336mn under CSF from US
  • July 1, 2015 to June 30, 2018: Tax holiday allowed to new manufacturing units in KP & Balochistan
  • With ifs and buts, PTI accepts JC’s findings
  • Work on IP pipeline project restarted: Iranian CG
  • Government to sign 15-year deal to import gas from Qatar
  • Privatization Commission, headed by Mohammad Zubair, has approved appointment of financial advisor to sell 40% of Govt. stake in Kot Addu Power Company (KAPCO), country largest Independent Power Plant (IPP), led by consortium of Dubai Islamic bank
  • Army Chief that army was ready to pay any cost for making CPEC a reality

Following are few BUY recommendations:

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 420.8
Target Price: PKR 542

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 162.9
Target Price: PKR 238.2 

Pak Oilfields (POL) – BUY
Current Price: PKR 370.1
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 154.51
Target Price: PKR 221.00

Pakistan State Oil (PSO) – BUY
Current Price: PKR 370.89
Target Price: PKR 493

K-Electric Co. (KEL) – BUY 
Current Price: PKR 7.9
Target Price: PKR 13.3

Nishat Mills (NML) – BUY
Current Price: PKR 114.5
Target Price: PKR 168.5 

Nishat Chunian Ltd. (NCL) – BUY
Current Price: PKR 37.8
Target Price: PKR 45.7 

Allied Bank Limited (ABL) – BUY
Current Price: PKR 103.3
Target Price: PKR 140.0 

National Bank (NBP) – BUY
Current Price: PKR 57.1
Target Price: PKR 69.0

United Bank Ltd (UBL) – BUY
Current Price: PKR 183.11
Target Price: PKR 194.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 233
Target Price: PKR 270

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 28
Target Price: PKR 34

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 45
Target Price: PKR 68

Engro Corporation (ENGRO) – BUY
Current Price: PKR 323.37
Target Price: PKR 403

Engro Fertilizers Limited (EFERT) – BUY
Current Price: PKR 92.97
Target Price: PKR 103.2

Following are few SELL recommendations:

Fauji Fert. Bin Qasim Ltd. (FFBL) – SELL
Current Price: PKR 58.53
Target Price: PKR 49.00

Hub Power Co (HUBCO) – SELL
Current Price: PKR 99.84
Target Price: PKR 71.00

Nishat Power Ltd (NPL) – SELL
Current Price: PKR 59.00
Target Price: PKR 38.00

Nishat Chun Power (NCPL) – SELL
Current Price: PKR 59.08
Target Price: PKR 43 

Pakgen Power Ltd (PKGP) – SELL
Current Price: PKR 32.31
Target Price: PKR 24

Indus Motor (INDU) – SELL
Current Price: PKR 1244.99
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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