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

BUY recommendations are ABL, APL, ASTL, BAFL, BAHL, DGKC, EFERT, ENGRO, FATIMA, FCCL, HBL, INDU, KEL, KOHC, MCB, NBP, NCPL, NPL, OGDC, PAEL, PIOC, PPL, PSMC, PSO, PTC and UBL.

Top gainers of last week were: Hascol Petroleum Ltd, Indus Motor, Bannu Woollen, International Steels Ltd, Associated Services Limited, Pioneer Cement, IGI Insurance, GlaxoSmithKline Pak., Packages Limited and Hum Network Ltd.

Top losers of last week were: Feroz 1888 Mills Ltd, Pak Tobacco Co, Rafhan Maize Prod., Engro Foods Ltd, Stand.Chart.Bank, Larpir Power Ltd, Orix Leasing, Muree Brewery Co Ltd, Saif Power Ltd and Habib Metro Bank.

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

The Pakistan Stock Exchange (PSX) market registered an increase of 3.2% WoW (↑1,222pts) consolidating at new highs as broad based surge plays out at the helm of recent MSCI upgrade . KSE-100 index has reached on 39,188 by increasing 1404 points or 3.72%. While KSE-30 index has reached on 22,721 by increasing 1068 points or 4.93%.

Increased activity resulted in 35% rise in average daily volume to 193.8mn shares while average daily value rose 73% to Rs14.3bn/US$136.4mn.

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

  • The return of Prime Minister Nawaz Sharif gave much needed confidence to business circles reassuring continuity of order at the helm and quashing rumors suggesting otherwise
  • Fears over Brexit and a global economic slowdown subsided with local mutual funds as well as foreigners’ buying provided support to the market
  • Key sectors of the week consumers, pharmaceuticals and cements outperformed the benchmark KSE-100 index amidst positive news flows whereas banks, fertilisers and foods underperformed
  • Oil and gas marketing and exploration companies came in the limelight driven by impressive oil products sales numbers as sales grew by 5% to 23.37 million tons in FY16 and well discoveries
  • Auto sales also increased by 20% year-on-year in FY16 led by a sharp increase of 28% in sales for Pak Suzuki Motor and continued strength in Toyota sales. The loss in the value of yen also provided some much-needed support to the auto sector that suffered over Brexit fears
  • Foreign Institutional Portfolio Investment (FIPI) witnessed an inflow of $21.4 million during the week vs $1.19 million outflow last week
  • Interloop Limited, one of the world’s largest socks manufacturer, has poured Rs2 billion into the dairy business and set up a new company named Interloop Dairies Limited. It is going to launch its milk brand next year
  • The federal government has introduced a tax reduction of 2 per cent for Shariah-compliant listed companies through Finance Act 2016.The tax rebate, introduced on the suggestion of the Securities and Exchange Commission of Pakistan (SECP), is part of reforms being introduced for elimination of Riba and for promotion and development of Islamic capital market
  • EFOODS continued to bleed value as its deal finalized at a price much lower than street expectations
  • MOL, the operator of Tal block in the Khyber Pakhtunkhwa, has encountered hydrocarbons in development well Makori East‐5, Pakistan Oilfields Limited that has pre‐commerciality working interest of 21 per cent in Tal block stated in a stock filing on Monday.Other stakeholders include OGDC and Pakistan Petroleum with 28pc each
  • Sales of automobiles increased 19 percent to 1.626 million vehicles in the last fiscal year of 2015/16, industry data showed on Wednesday, as the soft interest rate whetted appetite for cars
  • Lucky Cement Limited, a Pakistan’s leading cement maker, will invest $200 million to set up a new plant in Chakwal
  • Privatisation Commission approved offloading of the government's remaining 40.25% stake in KAPCO, where Expressions of Interest from prospective bidders was invited on Jul 15’16
  • Three foreign investors including Shanghai Stock Exchange (SSE) have expressed interest in acquiring a stake of up to 40% in the PSX
  • Total deposits of the banking industry crossed Pkr10tn as of Jun'16 (up 10%YoY) vs.PkR9.14tn as of Jun'15

Following are few BUY recommendations:

Allied Bank Limited (ABL) – BUY
Current Price: PKR 87.4
Target Price: PKR 135.00 

Attock Petroleum (APL) – BUY
Current Price: PKR 455.0
Target Price: PKR 580

Amreli Steels Ltd. (ASTL) – BUY
Current Price: PKR 50.8
Target Price: PKR 83.0

Bank Al-Falah (BAFL) – BUY
Current Price: PKR 25.4
Target Price: PKR 32

Bank Al-Habib (BAHL) – BUY
Current Price: PKR 42.37
Target Price: PKR 68

DG Khan Cement (DGKC) – BUY
Current Price: PKR 203
Target Price: PKR 237.0

ENGRO Fertilizer Limited (EFERT) – BUY
Current Price: PKR 66.7
Target Price: PKR 95

Engro Corporation (ENGRO) – BUY
Current Price: PKR 339.1
Target Price: PKR 362.00

Fatima Fertilizer (FATIMA) – BUY
Current Price: PKR 33.3
Target Price: PKR 41

Fauji Cement Company Limited (FCCL) – BUY
Current Price: PKR 38.0
Target Price: PKR 47

Habib Bank Limited (HBL) – BUY
Current Price: PKR 212.2
Target Price: PKR 255

Indus Motor (INDU) – BUY
Current Price: PKR 1,093
Target Price: PKR 1109.67

K-Electric (KEL) – BUY
Current Price: PKR 8.2
Target Price: PKR 13

Kohat Cement (KOHC) – BUY
Current Price: PKR 282.9
Target Price: PKR 353

MCB Bank Limited (MCB) – BUY
Current Price: PKR 225.19
Target Price: PKR 268

Nishat Chun Power (NCPL) – BUY
Current Price: PKR 51.70
Target Price: PKR 63

Oil & Gas Development Co. (OGDC) – BUY
Current Price: PKR 145.52
Target Price: PKR 172.00

Pak Electron (PAEL) – BUY
Current Price: PKR 60
Target Price: PKR 83

Pak Gen Power (PKGP) – BUY
Current Price: PKR 24.5
Target Price: PKR 41

Pakistan Petroleum (PPL) – BUY
Current Price: PKR 169
Target Price: PKR 193.8

Pak Suzuki Motors (PSMC) – BUY
Current Price: PKR 404.59
Target Price: PKR 532

Pakistan State Oil (PSO) – BUY
Current Price: PKR 397
Target Price: PKR 456

Pakistan Telecommunications (PTC) – BUY
Current Price: PKR 16.1
Target Price: PKR 21.9

Tariq Glass (TGL) – BUY
Current Price: PKR 80.2
Target Price: PKR 120

United Bank Ltd (UBL) – BUY
Current Price: PKR 180.74
Target Price: PKR 212.00

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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