Pakistan Stock Exchange (PSX) Weekly Analysis 5 Feb, 2016

BUY recommendations are ABL, APL, BAFL, BAHL, CHCC, DGKC, EFERT, EFOODS, ENGRO, FATIMA, FFBL, HBL, HCAR, INDU, LUCK, KEL, MCB, MLCF, NBP, NCPL, NPL, OGDC, POL, PPL, PSMC, PSO, PTC and UBL.

Top gainers of last week were: Associated Services Limited, Jah.Sidd. Co., J.D.W.Sugar, Honda Atlas Cars, Habib Bank Ltd, Bank Al‐Falah, EFU Life Assur Ltd., Abbott Lab, Bannu Woollen and Mari Petroleum.
   
Top losers of last week were: Pak Tobacco Co, Muree Brewery Co Ltd, Punjab Oil, Colgate Palmolive, Bata (Pak) Ltd., Jubilee Gen Ins, Ibrahim Fibres, Nishat Chunian, Shifa International Hospitals and Pakcem Limited.

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

The Karachi Stock Exchange (KSE) market sustained the bullish momentum gained during last week and posted an impressive return of 4.1% WoW to close at 32,479 pts. The benchmark Karachi Stock Exchange (KSE) 100-share Index gaining 1180 points or 3.77 percent, to close the week at 32,479 points. While Karachi Stock Exchange (KSE) 30-share Index reached on 19,013 points by gaining 834 points or 4.59 percent.

Average daily volume increased 24% to 144.3mn shares and average daily value rose 22% to Rs8.5bn/US$81.4mn.

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


  • The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) kept policy rate unchanged at 6%, bashing expectations of continued monetary easing
  • The country wide protest over PIA privatization kept the trading activity limited as average turnover during the week recorded at 144mn shares against 116mn shares recorded previous week
  • Moody gives nod of approval for new MPC framework
  • Over the week, Commercial Banks, Financial Services and Pharma & Biotech sector increased by 7.2%, 4.8% and 4.6%, respectively
  • Decline was seen in Beverages, Tobacco and Forestry sector, which were down 7.8%, 7.4% and 3%, respectively
  • Foreigners were net sellers of US$2.2mn during the week
  • Cement sector witnessed net buying of US$6.0mn while Banks and Oil & Gas Exploration sector experienced net selling of US$7.1mn and US$4.8mn respectively during the week
  • Whispers of Russia agreeing to come to the table with Saudi Arabia to decide the fate of oil prices helped spark recovery in the international crude oil prices which in turn provided some respite to another heavyweight, the E&P sector (+2.5% WoW) 
  • IMF’s nod of approval for US$500mn tranche
  • Cement sector was the center of attraction on the expectation of healthy earnings growth and sophisticated payouts
  • KOHC impressed investors with extraordinary growth due to low base effect
  • HCAR hit two consecutive upper caps and was included in the top gainers list for the week
  • No major results were declared during the week except EPQL that depicted negative bottom line growth along with a cash dividend of PKR 1.00/share, less than industry estimates
  • Imports of used cars continue to thrive, showing a sharp jump of 30% in the last six months
  • Government of Pakistan announced a reduction in prices of petroleum products by PKR5/litre. Petrol will be available at PKR71.25/litre and high speed diesel at PKR75.79 from Feb 1, according to a notification 
  • OGDC and PPL have been tasked to carry out a pilot project to explore shale gas deposits, estimated at more than 10,000 TCF
  • The retail price of sugar has surged to PKR60‐62 a kilogram after the government doled out a PKR6.5bn (PKR13 a kg) export subsidy to millers in December 2015, when prices were PKR55 
  • Pakistan’s cotton production has plunged 33% to 9.612mn bales this season. Cotton experts estimate that the shortfall would inflict a loss of around USD 6bn to the country’s GDP 
  • The country's annual inflation inched up to 3.32%YoY (slightly above market expectations) in Jan'16 as compared to 3.19%YoY in Dec'15 (up 0.21%MoM) due to increase in cost of food items
  • Outstanding loans to private‐sector businesses amounted to PkR3.2tn (up 8.8%YoY) as at Dec’15, while consumer loans climbed to PkR292.9bn at the end of CY15 (up 11.6%YoY) as a result of the current cycle of monetary easing


Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY 
Current Price: PKR 93.93
Target Price: PKR 135.00

Attock Petroleum (APL) – BUY 
Current Price: PKR 442.00
Target Price: PKR 626.37

Bank Al-Falah (BAFL) – BUY 
Current Price: PKR 28.99
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY 
Current Price: PKR 44.87
Target Price: PKR 68

Cherat Cement (CHCC) – BUY 
Current Price: PKR 97.56
Target Price: PKR 120

DG Khan Cement (DGKC) – BUY 
Current Price: PKR 159.2
Target Price: PKR 237

ENGRO Fertilizer Limited (EFERT) – BUY 
Current Price: PKR 81.15
Target Price: PKR 110

ENGRO Foods Limited (EFOODS) – BUY 
Current Price: PKR 140.5
Target Price: PKR 179

Engro Corporation (ENGRO) – BUY
Current Price: PKR 275.04
Target Price: PKR 362.00

Fatima Fertilizer (FATIMA) – BUY 
Current Price: PKR 37.75
Target Price: PKR 49

Fauji Fertilizer Bin Qasim (FFBL) – BUY 
Current Price: PKR 49.24
Target Price: PKR 62

Habib Bank Limited (HBL) – BUY 
Current Price: PKR 192.09
Target Price: PKR 268

Honda Atlas Cars (HCAR) – BUY 
Current Price: PKR 280.75
Target Price: PKR 330.00

Indus Motors (INDU) – BUY 
Current Price: PKR 1,045.30
Target Price: PKR 1305.00

Lucky Cement (LUCK) – BUY
Current Price: PKR 520.31
Target Price: PKR 652

K‐Electric Co. (KEL) – BUY
Current Price: PKR 7.00
Target Price: PKR 13.70

MCB Bank Limited (MCB) – BUY 
Current Price: PKR 203.79
Target Price: PKR 268

Maple Leaf Cement Factory (MLCF) – BUY 
Current Price: PKR 85
Target Price: PKR 108

National Bank (NBP) – BUY 
Current Price: PKR 56.26
Target Price: PKR 65

Nishat Chun Power (NCPL) – BUY 
Current Price: PKR 53.52
Target Price: PKR 63

Nishat Power Ltd (NPL) – BUY 
Current Price: PKR 51.05
Target Price: PKR 59

Oil & Gas Development Co. (OGDC) – BUY 
Current Price: PKR 110.49
Target Price: PKR 172.00

Pak Oilfields (POL) – BUY 
Current Price: PKR 222.06
Target Price: PKR 348

Pakistan Petroleum (PPL) – BUY 
Current Price: PKR 118.47
Target Price: PKR 168

Pak Suzuki Motors (PSMC) – BUY 
Current Price: PKR 517.7
Target Price: PKR 696

Pakistan State Oil (PSO) – BUY 
Current Price: PKR 335.2
Target Price: PKR 457

Pakistan Telecommunication (PTC) – BUY 
Current Price: PKR 15.2
Target Price: PKR 21.6

United Bank Ltd (UBL) – BUY 
Current Price: PKR 154.83
Target Price: PKR 212.00

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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