Karachi Stock Exchange Weekly Analysis 31 Aug, 2015

BUY recommendations are PSMC, OGDC, POL, PPL, PSO, KEL, NML, NCL, ABL, NBP, UBL, HBL, BAFL, BAHL, ENGRO, DGKC, LUCK, KOHC and CHCC.

SELL recommendations are FFBL, PKGP, HUBCO, HCAR and INDU.

Top gainers of last week were: Pak Tobacco Co., Muree Brewery Co Ltd, Maple Leaf Cem., Allied Rental Mod, Punjab Oil, GlaxoSmithKline Pakistan, Pioneer Cement, Habib Metro Bank, Kohinoor Textile and Fauji Cement Company.
   
Top losers of last week were: Bata (Pak) Ltd., Sui South Gas, Atlas Battery, Thal Limited, Attock Petroleum, Indus Motor, Pakgen Power Ltd., Rafhan Maize Prod., Packages Limited and MCB Bank Ltd.

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

The Karachi Stock Exchange (KSE) market recovered after losing about 1500 points on the first trading day of the week. KSE-100 index closed on 34,447 by losing -73 points or --0.21%, while KSE-30 index closed on 20,976  by losing -132 points or - 0.63%.

The average traded value was pulled down by 9.6%WoW to average at US$108mn, whereas the average traded volume also plummeted by 23.89%WoW to average at 254mn shares.

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

  • Karachi Stock Exchange (KSE), Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE) have signed an MOU (Memorandum of Understanding) to integrate the 3 stock exchanges to form uniform exchange called Pakistan Stock Exchange (PSE)
  • Trading sessions marred by heightened volatility and prevalence of adverse external factors (tumbling Asian markets, volatility in global oil prices)
  • Heightened volatility witnessed in global oil prices as Brent fell below US$45/bbl for the first time in six years, only to rise by more than 10% on Friday maintaining stability at US$47/bbl
  • Inking of a MOU by the three stock exchanges of the country to incorporate a unified Pakistan Stock Exchange
  • SBP stating that it expects the PkR to remain stable against the US$ as the Rupee declined 2.9%WoW against the Greenback
  • Country’s total liquid fx reserves for the week ended Aug 21’15 marked a decline of US$146mn to US$18.51bn
  • GLAXO announcing a spinoff of its consumer healthcare unit into a separate entity GSK Consumer Healthcare Pakistan Ltd
  • Negativity in the oil stocks persisted into the week as well (despite somewhat recovery in the last day) with the sector cumulatively contributing 143pts to the decline
  • Banking sector also came under the axe (↓94pts) with investors speculating another interest rate cut in the backdrop of easing inflationary pressures amidst falling crude. MCB and OGDC were the prime negative index movers, eroding 81 and 61pts from the index
  • Cements (↑82pts) provided modicum of support to the index along with other side board sectors chipping in
  • Trading volume, averaging at 187mn (↑ 17% WoW), significantly improved during the week with KEL churning the most volumes at 153mn
  • Foreigners for the consecutive second week remained net sellers, offloading USD42mn worth of shares during the week
  • Global markets turn positive during the week post stiffness over China's slow down, weak currency, and strong US$ dollar which had led foreign outflow in the equities
  • On the contrary, global crude prices showed massive recovery of over 10% on Thursday, providing oil stocks the much-needed momentum
  • The management of KEL has reportedly agreed to negotiate new PPA with CPPA to obtain electricity from the national pool and a GSA with SSGCL
  • TCP finalises deals on 150,000 tons of urea import
  • The ready to harvest major and minor crops, including cotton, paddy, chilly and vegetables worth almost Rs85 billion have been completely washed out by the rain and floods in Sindh
  • Government of Pakistan has taken a serious note of a highly significant decline ‐ about 12% in textile exports of the country during July and called an emergency meeting. According to the latest figures released by the PBS, country's textile exports declined to USD1.03bn in July 2015 from USD1.16bn
  • Pakistan to import cotton worth USD2bn for textile sector
  • US has reauthorised GSP status for Pakistan. GSP programme has been renewed through Dec 31, 2017 and will be effective retrospectively between Aug 1, 2013 and July 28, 2015
  • ICI Pakistan to spend $90mln onlight soda ash plant in Khewra
  • Nissan Motors of Japan is exploring the possibilities of re‐launching its different models along with Datsun in Pakistan depending on upcoming auto policy for the next five years

Following are few BUY recommendations:

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 430.0
Target Price: PKR 542

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 137.0
Target Price: PKR 238.2

Pak Oilfields (POL) – BUY
Current Price: PKR 337.9
Target Price: PKR 442.00

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 135.4
Target Price: PKR 221.00

Pakistan State Oil (PSO) – BUY
Current Price: PKR 335.8
Target Price: PKR 493

K-Electric Co. (KEL) – BUY  
Current Price: PKR 7.8
Target Price: PKR 13.3

Nishat Mills (NML) – BUY
Current Price: PKR 109.9
Target Price: PKR 168.5

Nishat Chunian Ltd. (NCL) – BUY
Current Price: PKR 38.8
Target Price: PKR 45.7

Allied Bank Limited (ABL) – BUY
Current Price: PKR 104.7
Target Price: PKR 140.0

National Bank (NBP) – BUY
Current Price: PKR 53.8
Target Price: PKR 69.0

United Bank Ltd (UBL) – BUY
Current Price: PKR 164.6
Target Price: PKR 194.00

Habib Bank Limited (HBL) – BUY
Current Price: PKR 212.3
Target Price: PKR 270

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 27.7
Target Price: PKR 34

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 44.0
Target Price: PKR 68

Engro Corporation (ENGRO) – BUY
Current Price: PKR 322.7
Target Price: PKR 403

Dera Ghazi Khan Cement (DGKC) – BUY
Current Price: PKR 145.8
Target Price: PKR 176

Lucky Cement (LUCK) – BUY
Current Price: PKR 528.1
Target Price: PKR 665

Kohat Cement (KOHC) – BUY
Current Price: PKR 224.9
Target Price: PKR 268

Cherat Cement (CHCC) – BUY
Current Price: PKR 90.1
Target Price: PKR 109

Following are few SELL recommendations:

Fauji Fert. Bin Qasim Ltd. (FFBL) – SELL
Current Price: PKR 62.98
Target Price: PKR 49.00

Pakgen Power Ltd (PKGP) – SELL
Current Price: PKR 28.78
Target Price: PKR 24.00

Hub Power Co (HUBCO) – SELL
Current Price: PKR 102
Target Price: PKR 71.00

Honda Atlas Cars (HCAR) – SELL
Current Price: PKR 249.01
Target Price: PKR 204.00

Indus Motor (INDU) – SELL
Current Price: PKR 1191.70
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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