Pakistan Stock Exchange (PSX) Weekly Analysis 6 June, 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, Hascol Petroleum Ltd, Pioneer Cement, Millat Tractors, Kohat Cement, Mari Petroleum, Nishat Mills Limited, Engro Foods Ltd, Nishat Chunian and Honda Atlas Cars.

Top losers of last week were: Fauji Cement Company Ltd., Pak Tobacco Co, Jah.Sidd. Co., IGI Insurance, TRG Pakistan Ltd, Pakgen Power Ltd., Adamjee Ins, Fauji Fert Bin, Abbott Lab and Arif Habib Corp.

Top ten volume leaders: KEL, FCCL, TRG, PIBTL, SNGP, JSCL, BOP, PTC, EFOODS, PAEL and HUMNL.

The Pakistan Stock Exchange (PSX) market remained relatively dull during the earlier half of the week as budget related developments kept investors at bay, while the later part of the week witnessed a sharp uptick as the MSCI’s decision on Pakistan’s reclassification came into touching distance. KSE-100 index gained 1,161 points in the final three sessions to post a 529-point (1.4%) gain over last week’s closing.

Average daily volumes dropped slightly to 238.7 million shares traded per day, a 4.1% decline compared to the previous week. Average daily values remained steady and stood at Rs11.1 billion per day. The Pakistan Stock Exchange’s market capitalization stood at Rs7.53 trillion ($72 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:

  • The market remained relatively dull during the earlier half of the week as budget related developments kept investors at bay, while the later part of the week witnessed a sharp uptick as the MSCI’s decision on Pakistan’s reclassification came into touching distance
  • The cement silo (storage for materials and cement) of FCCL's plant collapsed over the weekend, destroying the coal mill and damaging the new production line of the company, according to industry sources. As per details, the FCCL's Line II CFS used for blending and storing raw cement meal, has incurred a major break down. The reported accident has also damaged coal kiln adjacent to the silo as well
  • Concerns regarding the implementation of the China Pakistan Economic Corridor and the closure of Fauji Cement’s plant weighed heavily on the market in the opening couple of sessions
  • Textile Weaving sector was among the major gainer as it grew by 25%, whereas Tobacco was down 3%
  • Strong rally led by the oil and gas, cement and textile sectors led to a rebound in the latter half of the week
  • Oil prices continued to play a major role in determining the market’s direction. Oil prices declined during the first half of the week as oil supply picked up. However, during the second half of the week, OPEC convened a meeting to discuss production cuts, which resulted in prices returning near $50 per barrel by the end of the week
  • The EFOODS acquisition coming to a conclusion kept making rounds at the bourse as the stock garnered a steady advance
  • Federal PSDP will be increased by 14% in next year's budget ‐ from PKR700bn to PKR800bn ‐ while provincial PSDP would increase by 7.5% ‐ from PKR 813.7bn to PKR875bn
  • CCoP headed by FM has reportedly delisted Pak‐Arab Refinery (Parco) from the list of entities being sold off, well informed MoP
  • The government is set to increase the rate of around 30 withholding taxes(WHT) for those who do not file their income tax returns, in the budget announcement later this week
  • Two more LNG terminals will be set up at the Port Qasim with a cumulative capacity of one bcfd, the PQA. Of the two, the Fauji Foundation will build a terminal with a capacity of 600 mmcfd while the second terminal of 400mmcfd capacity will be built by a Gulf emirate investor
  • Banks agreed to share information of accountholders, making cash and non‐cash transactions with the tax authorities
  • Foreigners were net buyers of US$14.5mn in the outgoing week

Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY
Current Price: PKR 84.31
Target Price: PKR 135.00 

Attock Petroleum (APL) – BUY
Current Price: PKR 434.3
Target Price: PKR 626.37

Amreli Steels Ltd. (ASTL) – BUY
Current Price: PKR 51.95
Target Price: PKR 83.0

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 24.75
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 40.3
Target Price: PKR 68

DG Khan Cement (DGKC) – BUY
Current Price: PKR 181
Target Price: PKR 237.0

ENGRO Fertilizer Limited (EFERT) – BUY
Current Price: PKR 68.91
Target Price: PKR 106.49

Engro Corporation (ENGRO) – BUY
Current Price: PKR 343
Target Price: PKR 362.00

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 31.6
Target Price: PKR 49

Fauji Cement Company Limited (FCCL) – BUY
Current Price: PKR 34.11
Target Price: PKR 50.0

Fauji Fertilizer Bin Qasim (FFBL) – BUY
Current Price: PKR 54
Target Price: PKR 60.48

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

Habib Bank Limited (HBL) – BUY
Current Price: PKR 178.95
Target Price: PKR 249.7

Indus Motor (INDU) – BUY
Current Price: PKR 929.96
Target Price: PKR 1109.67

K-Electric (KEL) – BUY
Current Price: PKR 8
Target Price: PKR 13.7

Lucky Cement (LUCK) – BUY
Current Price: PKR 619
Target Price: PKR 652

MCB Bank Limited (MCB) – BUY
Current Price: PKR 216.37
Target Price: PKR 268

National Bank (NBP) – BUY
Current Price: PKR 53.98
Target Price: PKR 65.00

Nishat Chun Power (NCPL) – BUY
Current Price: PKR 50.25
Target Price: PKR 63

Nishat Power Ltd (NPL) – BUY
Current Price: PKR 51.06
Target Price: PKR 59

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 143.4
Target Price: PKR 160

Pioneer Cement (PIOC) – BUY
Current Price: PKR 108.78
Target Price: PKR 123.0

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 156
Target Price: PKR 193.8

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 415.03
Target Price: PKR 532

Pakistan State Oil (PSO) – BUY
Current Price: PKR 383
Target Price: PKR 456

Pakistan Telecommunications (PTC) – BUY
Current Price: PKR 16
Target Price: PKR 21.9

United Bank Ltd (UBL) – BUY
Current Price: PKR 172.36
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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