Pakistan Stock Exchange (PSX) Weekly Analysis 22 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, PPL, PSMC, PSO, PTC and UBL.

Top gainers of last week were: Feroz 1888 Mills Ltd, Ferozsons (Lab), Pak Int.Bulk Ter, Bannu Woollen, Pak Petroleum, Bata (Pak) Ltd., K‐Electric, P.T.C.L.A, Hascol Petroleum Ltd and MCB Bank Ltd.

Top losers of last week were: Pak.Int.Con.Ter., Pak Tobacco Co, Punjab Oil, Indus Dyeing, National Bank of Pak, Thal Limited, Cherat Cement, Habib Metro Bank, Bank Al‐Falah and Indus Motor.

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

The Pakistan Stock Exchange (PSX) market index index recorded impressive gains during the week ended on May 20, notching up a rise of 1.6% and also reaching an all-time intra-day high of 36,848 points on Friday before settling slightly lower. The benchmark Karachi Stock Exchange (KSE) 100-share Index gaining 571.01 points, to close the week at 36,693.50  points.

Activity during the week improved as average daily volumes surged to 325 million shares, up 10.5% week-on-week, while average daily values rose 1.4% week-on-week to Rs11.4 million. Foreigners, though, remained net sellers of $7 million during the week.

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

  • State Bank of Pakistan has announced Monetary Policy, Interest Rate reduced 0.25%
  • One of the main reasons behind the positive sentiments was the possible upgrade of Pakistan’s bourse in the MSCI from the frontier to emerging market in June 2016
  • Additionally, upward movement of international oil prices also helped the market pick up momentum
  • The political uncertainty regarding the government’s fate after Panama leaks subsided and the lower political pressure also helped the index reach new highs
  • Gains in the index were primarily led by mid-tier stocks as Fauji Meat (+19.8%) and Pakistan International Bulk Terminal (+12.7%) cumulatively contributed 177.3 points, whereas blue-chip stocks (MCB Bank, Pakistan Petroleum and Kapco) added 241 points to the index
  • On the other hand, the banking sector mostly contributed to the decline with Habib Bank, National Bank, United Bank and Bank AL Habib cumulatively erasing 49 points from the index
  • Foreign institutional portfolio investment recorded an outflow of $6.98 million versus outflow of $12.71 million last week
  • On the macro side, the latest data of the State Bank of Pakistan (SBP) revealed that foreign direct investment crossed $1 billion during 10MFY16, an increase of 5% year-on-year. China was the biggest contributor followed by Hong Kong and Italy
  • On the other hand, total liquid foreign exchange reserves rose to an all-time high of $21.32 billion as State Bank holdings increased to $16.52 billion due to export and remittance receipts
  • This week, the telecom sector came into the limelight, as news emerged that the sector was likely to get major incentives in the upcoming budget for 2016-17, including extension in the tax holiday for telecom exports for three years and tax reduction for IT services companies from 8% to 2%
  • PPL rallied further as Sui field lease was renewed for ten years along with a small hydrocarbon discovery from Kotri block
  • PIBTL gained 12.69% during the week as euphoria over inclusion in MSCI small cap index persisted
  • HCAR announced its FY16 earnings which were higher than the street estimates along with better cash dividend which triggered short term profit booking
  • Banks particularly MCB was the top pick of participants as they build up their positions before decision over emerging market status
  • KAPCO was on investor’s radar as well as talks of its PPA renewal and coal conversion made rounds of the market
  • Excitement was visible in ENGRO as well as rumor mill suggests finalization of its stake sale in EFOODS by the end of the month
  • PSO seeks PKR190bn payment plan from government
  • Government of Pakistan has decided to slap a new tax on the construction of housing societies in the next budget for the FY‐17 in a bid to generate PKR10 to PKR15bn
  • A leading tetra milk producer has increased the price by PKR5‐PKR10 ahead of the budget and Ramazan
  • Approval by Baluchistan cabinet to lease Sui Gas Field to PPL for next 10 years
  • 4.7% YoY growth in Large Scale Manufacturing during 9MFY16
  • FY17 revenue target set Rs3.6trn for FBR, compared to a target of Rs3.1trn in FY16, 17% YoY higher
  • Chinese offer to finance whole $2b LNG project
  • Government auctions Rs229bn T-bills
  • Tariq Glass Industries Limited - Downward Revision in Custom Duty to Marginally Impact Local Manufacturers
  • Pioneer Cement Company Limited - Potential expansion may curtail payout
  • Pakistan OMC Sector - Revision in Pricing Regime Yet to be Fully Appreciated
  • Pak Elektron Limited - Outlook Remains Sanguine

Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY
Current Price: PKR 87.77
Target Price: PKR 135.00 

Attock Petroleum (APL) – BUY
Current Price: PKR 439.64
Target Price: PKR 626.37

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 25.01
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 42.43
Target Price: PKR 68

DG Khan Cement (DGKC) – BUY
Current Price: PKR 179.0
Target Price: PKR 237.0

ENGRO Fertilizer Limited (EFERT) – BUY
Current Price: PKR 70.91
Target Price: PKR 106.49

Engro Corporation (ENGRO) – BUY
Current Price: PKR 330.9
Target Price: PKR 362.00

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 31.69
Target Price: PKR 49

Fauji Cement Company Limited (FCCL) – BUY
Current Price: PKR 42.7
Target Price: PKR 50.0

Fauji Fertilizer Bin Qasim (FFBL) – BUY
Current Price: PKR 55.56
Target Price: PKR 60.48

Fauji Fertilizer Company (FFC) – BUY
Current Price: PKR 115.51
Target Price: PKR 124.19

Hascol Petroleum (HASCOL) – BUY
Current Price: PKR 153.1
Target Price: PKR 200.8

Habib Bank Limited (HBL) – BUY
Current Price: PKR 186.41
Target Price: PKR 249.7

Honda Atlas Cars (HCAR) – BUY
Current Price: PKR 294.40
Target Price: PKR 330.00

Indus Motor (INDU) – BUY
Current Price: PKR 935.24
Target Price: PKR 1109.67

K-Electric (KEL) – BUY
Current Price: PKR 7.7
Target Price: PKR 13.7

Lucky Cement (LUCK) – BUY
Current Price: PKR 602.4
Target Price: PKR 652

MCB Bank Limited (MCB) – BUY
Current Price: PKR 240.00
Target Price: PKR 268

National Bank (NBP) – BUY
Current Price: PKR 54.12
Target Price: PKR 65.00

Nishat Chun Power (NCPL) – BUY
Current Price: PKR 49.99
Target Price: PKR 63

Nishat Power Ltd (NPL) – BUY
Current Price: PKR 50.45
Target Price: PKR 59

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 144.68
Target Price: PKR 160

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

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 154.81
Target Price: PKR 168

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 387.32
Target Price: PKR 532

Pakistan State Oil (PSO) – BUY
Current Price: PKR 381.6
Target Price: PKR 456

Pakistan Telecommunications (PTC) – BUY
Current Price: PKR 15.9
Target Price: PKR 21.9

United Bank Ltd (UBL) – BUY
Current Price: PKR 171.01
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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