Pakistan Stock Exchange (PSX) Weekly Analysis 18 April, 2016

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

Top gainers of last week were: National Refinery, Pak Oilfields, Colgate Palmolive, J.D.W.Sugar, Attock Refinery Ltd., Rafhan Maize Prod., Feroz 1888 Mills Ltd, Soneri Bank, Stand.Chart.Bank and Sui North Gas Pipe.

Top losers of last week were: Pak Tobacco Co, Orix Leasing, Sui South Gas, Larpir Power Ltd, Arif Habib Corp, Shifa International Hospitals, K‐Electric (KESC), National Foods, Pakgen Power Ltd. and Nestle Pakistan.

Top ten volume leaders: TRG, JSCL, PAEL, SNGP, KEL, PIBTL, EFERT, PTC, FCCL, BOP, and SSGC,

The Pakistan Stock Exchange (PSX) market index remain volatile during the outgoing week amid prevailing political noise regarding panama leaks which poses doubts over the future of the current ruling party. Therefore, profit taking was observed at the physiological barrier of 34k where foreigners sold US$1.46mn vs. an inflow of US$27.63mn in the previous week. The benchmark Karachi Stock Exchange (KSE) 100-share Index losing -201 points, or -0.59 percent, to close the week at 33,767 points. KSE 30-share Index gaining -79 points, or -0.40 percent, to end at 19,550 points.

Trading activity declined to 190mn shares/day (down 31%WoW). Further, average traded value slid to US$82.42mn (down 17.5%WoW). As far as FIPI is concerned, foreigners sold US$1.46mn during the week as compared to a massive inflow of US$27.63mn in the past week.

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

  • The panama leaks had its toll on investor sentiments casting dark clouds on the PML‐N’s government
  • SBP has announced the Monetary Policy and keeps interest rate unchanged at 6%
  • Healthy corporate results by oil & gas (POL) and Refinery (ATRL) offset the negative sentiments at the bourse
  • International crude oil prices have also improved resulting in 100bps appreciation in sector’s capitalization during the week
  • Oil rallied Tuesday on a report that Saudi Arabia and Russia, the world’s two biggest producers, have reached a crude output freeze agreement ahead of key Doha talks this weekend
  • Household Goods topped the gainers list on sector level as it rose 11.4% over the week
  • Tobacco and Fixed Line Telecommunication shed the most value as they declined 14.6% and 8.9%, respectively
  • Byco Petroleum (BYCO) has informed through a PSX notice that board of directors of the company have approved a potential merger (by way of amalgamation) of Byco Oil Pakistan Ltd. and Byco Terminals Pakistan Ltd. with and into the company
  • As per news reports, Ministry of Water & Power (MoW&P) is to arrange Rs25bn from commercial banks to inject into power sector through Power Holding Pvt. Ltd. (PHPL). This will be made part of tariff at an appropriate time. MoW&P and Ministry of Finance (MoF) are working on a settlement plan to deal with power sector liabilities; current and accrued dues on account of various subsidies total ~Rs168bn, as per the news report
  • Government is planning to raise Rs100bn in Islamic bonds to fund Neelum Jehlum hydropower plant, country’s fourth largest hydropower plant. It is expected to generate 969MW of electricity and is expected to come online in 2017
  • Car, heavy vehicles sales jump in July-March March cement sales hit record 3.58m tonnes
  • Fauji Foundation has shown interest in purchasing 10% of MARI
  • SBP sells T-bills worth Rs57.57 billion
  • Auto companies exceeded expectations as many companies posted gains over strong car sales. HCAR was the top performer with sales increasing by 16% Y/Y
  • PSMC witnessed steep volumetric dip with sales receding by 30% Y/Y while INDU sales remained flat in March
  • Companies from China’s violence‐prone far western region of Xinjiang signed deals worth about USD 2bn with Pakistan this week during a visit to Pakistan by Xinjiang’s top official, who sought to cement ties with an important security partner
  • OGRA challenges LPG price fixing at Rs900 per cylinder
  • GE has announced a deal with the CMEC supply two 330MW boilers to Engro Powergen Thar (Private) Limited, CMEC’s joint venture for the Thar Block II Power Plant
  • The Nepra approved a refund of 45 paisa/unit in consumers‐end tariff of K‐Electric under quarterly (December 2015 ‐ February 2016) fuel adjustment mechanism
  • Pakistan Customs proposed the FBR to impose five to 20% regulatory duties on a number of importable goods to avert the incidences of mis‐declaration, which cause revenue losses to national exchequer
  • Vitol Dubai Ltd. completed acquisition of 18.1mn or 15% of voting shares of HASCOL as per exchange filing
  • Joint session of parliament passed "The Pakistan International Airlines Corporation (Conversion) Bill" to convert the national flag carrier into a public limited company
  • PM Sharif laid foundation stone of two power plants of 660MW in Thar as the Sindh govt. reached financial close of 660MW Thar Coal Power Project at Thar Block‐II

Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY
Current Price: PKR 88.00
Target Price: PKR 135.00 

Attock Petroleum (APL) – BUY
Current Price: PKR 431.6
Target Price: PKR 626.37

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 25.2
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 42.30
Target Price: PKR 68

ENGRO Fertilizer Limited (EFERT) – BUY
Current Price: PKR 71.1
Target Price: PKR 118

Engro Corporation (ENGRO) – BUY
Current Price: PKR 311.38
Target Price: PKR 362.00

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 32.4
Target Price: PKR 49

Fauji Fertilizer Company (FFC) – BUY
Current Price: PKR 110.8
Target Price: PKR 124.19

Habib Bank Limited (HBL) – BUY
Current Price: PKR 173.1
Target Price: PKR 249.7

Honda Atlas Cars (HCAR) – BUY
Current Price: PKR 264.61
Target Price: PKR 330.00

Indus Motor (INDU) – BUY
Current Price: PKR 927.39
Target Price: PKR 1305

Kot Addu Power Co (KAPCO) – BUY
Current Price: PKR 77.34
Target Price: PKR 94

K-Electric (KEL) – BUY
Current Price: PKR 7.2
Target Price: PKR 13.7

Lucky Cement (LUCK) – BUY
Current Price: PKR 569.4
Target Price: PKR 652

MCB Bank Limited (MCB) – BUY
Current Price: PKR 203.3
Target Price: PKR 268

Nishat Chun Power (NCPL) – BUY
Current Price: PKR 49.52
Target Price: PKR 63

Nishat Power Ltd (NPL) – BUY
Current Price: PKR 49.80
Target Price: PKR 59

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 117.7
Target Price: PKR 160

Pioneer Cement (PIOC) – BUY
Current Price: PKR 99.4
Target Price: PKR 123.0

Pak Oilfields (POL) – BUY
Current Price: PKR 264.5
Target Price: PKR 348

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 129.6
Target Price: PKR 168

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 415.49
Target Price: PKR 532

Pakistan State Oil (PSO) – BUY
Current Price: PKR 362.2
Target Price: PKR 456

Pakistan Telecommunications (PTC) – BUY
Current Price: PKR 16.2
Target Price: PKR 21.9

United Bank Ltd (UBL) – BUY
Current Price: PKR 151.9
Target Price: PKR 195.7

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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