Pakistan Stock Exchange (PSX) Weekly Analysis 1 May, 2016

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

Top gainers of last week were: Pak Tobacco Co, Feroz 1888 Mills Ltd, International Steels Ltd, Nishat Mills Limited, Pak.Int.Con.Ter., Packages Limited, Oil and Gas Deve, EFU Life Assur Ltd., Faysal Bank and Habib Bank Ltd.

Top losers of last week were: Indus Dyeing, Arif Habib Corp, Pak Suzuki Motor, Hum Network Ltd, Soneri Bank, Larpir Power Ltd, Nestle Pakistan, P.T.C.L.A, Kot Addu Power Co. and Allied Rental Mod.

Top ten volume leaders: SNGP, TRG, PAEL, BOP, OGDC, KEL, BAFL, JSCL, PIBTL, and FFBL.

The Pakistan Stock Exchange (PSX) market index has finally come out of its consolidation phase closing at an 8‐months high`(also CY16’s high) of 34,719. The benchmark Karachi Stock Exchange (KSE) 100-share Index gaining 979 points, or 2.90 percent, to close the week at 34,719 points. KSE 30-share Index gaining 668 points, or 3.42 percent, to end at 20,206 points.

Average daily volume increased 1% to 242.4mn shares whereas average daily value increased by 17% to Rs11.1bn/US$112.2mn in the outgoing week.

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

  • As the heat from Panama leaks turns down slowly, local equities heaved a sigh of relief with the market breaking the psychological barrier of 34.5k
  • Quarterly results dominated activity at the local bourse during the week
  • Oil in global arena posted a remarkable recovery to close above USD48/barrel due to marginally lower US inventory data further propped up by rumors of Saudi plan to reduce drilling
  • Activity was also seen in index heavyweight stocks like oil & gas exploration, which attracted attention on the back of rise in global oil prices
  • Foreign investors were net sellers of US$12.4mn this week with major selling in Chemicals sector of US$12.3mn. Net buying of US$3.6mn was seen in Food Producers
  • The week opened on a sour note as Finance Minister announced continuation of super tax for eradication of terrorism, taking everyone by surprise
  • In the cement universe like LUCK, MLCF posted earnings which were below street estimates whereas remarkable profitability growth was witnessed in small tiers, POWER and FECTC
  • In the banking sector, spreads contraction kept the results mainly lackluster as banks propped up their bottom line with capital gains. ABL was the only exception managing to keep core income intact along with active bond trading as PAT expanded by 47% Q/Q
  • On the fertilizer front, FFC announced dismal payout along with disappointing earnings which kept the stock under pressure whereas EFERT’s gross margins witnessed a healthy growth despite tough conditions
  • HUBC and NML rallied during the week posting strong top line growth as the former also announced a surprise payout
  • The SECP will introduce the concept of stock split to generate market activity in high priced shares traded at stock exchanges. The Capital Market Development Plan‐2016 (CMDP) issued by the SECP revealed that in case of highly valued shares whose shares have a high market price, the trading activity may get restricted due to inaffordability of lot size for such shares
  • Petrol imports are likely to touch a record high this month, crossing 400,000 tonnes, as consumers are switching to petrol because of lower prices and scant availability of CNG
  • The ECC is likely to direct an additional 91mn cubic feet of gas per day (mmcfd) to Engro Fertilizers and Genco‐II power plant. MPCL had informed the petroleum ministry that it had over 91mmcfd that could be allocated to Engro Fertilizers (60mmcfd) and Genco‐II (31mmcfd). In turn, the petroleum ministry was seeking relevant approval from the ECC
  • Fertilizer companies turned down the GoP’s proposal to bring down prices of urea by PkR200/bag, however they agreed to a cut of PkR60/bag

Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY
Current Price: PKR 89.66
Target Price: PKR 135.00 

Attock Petroleum (APL) – BUY
Current Price: PKR 444.5
Target Price: PKR 626.37

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 25.23
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 41.96
Target Price: PKR 68

DG Khan Cement (DGKC) – BUY
Current Price: PKR 174.7
Target Price: PKR 237.0

ENGRO Fertilizer Limited (EFERT) – BUY
Current Price: PKR 70
Target Price: PKR 106.49

Engro Corporation (ENGRO) – BUY
Current Price: PKR 312.84
Target Price: PKR 362.00

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 30.69
Target Price: PKR 49

Fauji Cement Company Limited (FCCL) – BUY
Current Price: PKR 43.0
Target Price: PKR 50.0

Fauji Fertilizer Bin Qasim (FFBL) – BUY
Current Price: PKR 53.97
Target Price: PKR 60.48

Fauji Fertilizer Company (FFC) – BUY
Current Price: PKR 107.21
Target Price: PKR 124.19

Habib Bank Limited (HBL) – BUY
Current Price: PKR 188.93
Target Price: PKR 249.7

Honda Atlas Cars (HCAR) – BUY
Current Price: PKR 281.91
Target Price: PKR 330.00

Indus Motor (INDU) – BUY
Current Price: PKR 949.07
Target Price: PKR 1109.67

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

Lucky Cement (LUCK) – BUY
Current Price: PKR 550.91
Target Price: PKR 652

MCB Bank Limited (MCB) – BUY
Current Price: PKR 211.53
Target Price: PKR 268

National Bank (NBP) – BUY
Current Price: PKR 55.52
Target Price: PKR 65.00

Nishat Chun Power (NCPL) – BUY
Current Price: PKR 49.31
Target Price: PKR 63

Nishat Power Ltd (NPL) – BUY
Current Price: PKR 50.88
Target Price: PKR 59

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 131.34
Target Price: PKR 160

Pioneer Cement (PIOC) – BUY
Current Price: PKR 98.8
Target Price: PKR 123.0

Pak Oilfields (POL) – BUY
Current Price: PKR 320.4
Target Price: PKR 348

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 146.2
Target Price: PKR 168

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 379.99
Target Price: PKR 532

Pakistan State Oil (PSO) – BUY
Current Price: PKR 353.6
Target Price: PKR 456

Pakistan Telecommunications (PTC) – BUY
Current Price: PKR 14.2
Target Price: PKR 21.9

United Bank Ltd (UBL) – BUY
Current Price: PKR 163.94
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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