Pakistan Stock Exchange (PSX) Weekly Analysis 30 May, 2016

BUY recommendations are ABL, APL, ASTL, BAFL, BAHL, DGKC, EFERT, ENGRO, FATIMA, FFBL, FFC, HBL, 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, Pak Services, Hascol Petroleum Ltd, Service Indus, Pak Suzuki Motor, Attock Refinery Ltd., Nestle Pakistan, Rafhan Maize Prod., Pakgen Power Ltd. and National Refinery.

Top losers of last week were: Bannu Woollen, MCB Bank Ltd, Ibrahim Fibres, Jah.Sidd. Co., Hum Network Ltd, Pak Tobacco Co, Meezan Bank, Associated Services Limited, Muree Brewery Co Ltd and B.O.Punjab.

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

The Pakistan Stock Exchange (PSX) market index witnessed a topsy-turvy ride during the week as the benchmark KSE-100 index fell sharply in the opening couple of days only to post a strong recovery towards the end of the week, recording an overall gain of 282 points (0.9%) to close at 31,294. The benchmark Karachi Stock Exchange (KSE) 100-share Index closed on 36,694 points, while Karachi Stock Exchange (KSE) 30-share Index closed on 21,243 points

Average daily volumes were up 11.5% and stood at to 138.2 million shares traded per day, while average daily values fell slightly by 5.8% and were recorded at Rs6.23 billion per day. The Pakistan Stock Exchange’s market capitalisation stood at Rs6.58 trillion ($62.9 billion) at the end of the week.

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

  • Volatility in global crude oil prices and negativity surrounding particular sectors kept the market on edge, but it was value buying in blue-chip companies towards the end of the week, which led to the KSE-100 ending the week in the green
  • Oil prices continued to play a major role at the bourse as crude prices steadily recovered throughout the week, coinciding with the positivity at the bourse. The price of Brent crude crossed $35 per in the latter part of the week and resulted in decent gains for the oil and gas sector
  • The cement sector also benefitted from the late rally, but could only manage to recover its earlier losses as persistent rumours of a price war and an average result announcement by Lucky Cement tore through the sector in the opening few days
  • Foreigners were again net sellers at the bourse and offloaded net equity worth $4.82 million during the week, down from the $13.2 million net selling in the previous week
  • The political arena remained muted as the joint committee formed to decide the TOR’s for investigation on the Panama‐Gate scandal held its round of talks which are yet to bear fruit
  • The SBP’s surprise decision to slash DR by 25bps caught many wrong‐footed in the financial sector stocks as banking plays bled value in the earlier part of the week only to see late value buying that helped pare losses seen earlier
  • The fertilizer sector got a much needed boost first on account of strong rumors of a likely removal of both GIDC and GST from the sector
  • The week saw KEL outrun its peers in the sector as a prominent foreign fund was reported to have started building fresh positions, while chatter of Abraaj selling some of its stake to a Chinese buyer kept the scrip on an ascent
  • Local E&P names shrugged off this move in prices while POL embarked on a steamy advance as expectations of a higher dividend kept the stock high on the gainers list
  • PSMC raked in fresh gains on anticipation of the Punjab government likely to announce another Taxi scheme in the upcoming budget
  • Power generation at peak hours rose by more than 26.5% to 16,044MW in May 2016 as compared to 12,671MW in May 2013 due to which electricity is being supplied as per announced schedule
  • GoP will begin the marketing process next month to sell a 49% stake in PIA and plans to list shares in several power utility firms this year, privatization minister
  • Nepra approves 12.2 paisas/kwh reduction for KEL consumers
  • PTA has approved the merger of Mobilink and Warid Telecom (Private) Limited. This is yet another milestone in the regulatory process and follows the approval granted in March, 2016 by the CCP
  • MCB said to be in preliminary non‐binding discussion with Fullerton Financial Holdings Pte Ltd (FFH) for a possible merger with NIB
  • GoP has decided to increase PSDP outlay by 11% for FY17 to PkR1.675trn from current year’s allocation of PkR1.514trn
  • GoP likely to increase the tax on dividend income to 20% for non‐filers while 15% tax on dividend income for return filers and it may also start charging advance tax on the alternate corporate tax
  • The current subsidy on DAP to the tune of Rs20bn (PkR500/bag) shared on a 50‐50 basis by the federal and provincial governments is likely to continue in the next fiscal year with Ministry of Food proposing to remove the GST on DAP and other fertilizers

Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY
Current Price: PKR 85.94
Target Price: PKR 135.00 

Attock Petroleum (APL) – BUY
Current Price: PKR 429.06
Target Price: PKR 626.37

Amreli Steels Ltd. (ASTL) – BUY
Current Price: PKR 52.0
Target Price: PKR 83.0

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 24.79
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 41.40
Target Price: PKR 68

DG Khan Cement (DGKC) – BUY
Current Price: PKR 177.9
Target Price: PKR 237.0

ENGRO Fertilizer Limited (EFERT) – BUY
Current Price: PKR 70.69
Target Price: PKR 106.49

Engro Corporation (ENGRO) – BUY
Current Price: PKR 337
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 44
Target Price: PKR 50.0

Fauji Fertilizer Bin Qasim (FFBL) – BUY
Current Price: PKR 56
Target Price: PKR 60.48

Fauji Fertilizer Company (FFC) – BUY
Current Price: PKR 117
Target Price: PKR 124.19

Hascol Petroleum (HASCOL) – BUY
Current Price: PKR 165.2
Target Price: PKR 200.8

Habib Bank Limited (HBL) – BUY
Current Price: PKR 180.06
Target Price: PKR 249.7

Indus Motor (INDU) – BUY
Current Price: PKR 926.28
Target Price: PKR 1109.67

K-Electric (KEL) – BUY
Current Price: PKR 7.8
Target Price: PKR 13.7

Lucky Cement (LUCK) – BUY
Current Price: PKR 598.9
Target Price: PKR 652

MCB Bank Limited (MCB) – BUY
Current Price: PKR 219.79
Target Price: PKR 268

National Bank (NBP) – BUY
Current Price: PKR 54.15
Target Price: PKR 65.00

Nishat Chun Power (NCPL) – BUY
Current Price: PKR 49.95
Target Price: PKR 63

Nishat Power Ltd (NPL) – BUY
Current Price: PKR 50.09
Target Price: PKR 59

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 142.61
Target Price: PKR 160

Pioneer Cement (PIOC) – BUY
Current Price: PKR 98.1
Target Price: PKR 123.0

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 155.4
Target Price: PKR 193.8

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 412.6
Target Price: PKR 532

Pakistan State Oil (PSO) – BUY
Current Price: PKR 382
Target Price: PKR 456

Pakistan Telecommunications (PTC) – BUY
Current Price: PKR 15.8
Target Price: PKR 21.9

United Bank Ltd (UBL) – BUY
Current Price: PKR 168.61
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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