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Sunday, 18 December 2011

Daily Stock Market update: 19 Dec,2011


Karachi Stocks Up 84.20 Points:
KARACHI, Dec 19: The KSE-100 index was at 11112.34, up 84.20 points. 

December 16, 2011

Indus Dyeing
Rs 18.48
Rafhan Maize
Rs (65.56)
Indus Motors
Rs 6.04
Nestle Pakistan
Rs (62.33)
Attock Refinery
Rs 3.35
Rs (6.98)
Al-Noor Sugar
Rs 2.63
Millat Tractors
Rs (5.37)
Dadex Eternit
Rs 1.86
Attock Petroleum
Rs (3.27)

KSE 30 – Shares Index
Previous 10,251.92, Friday’s 10.154.14, minus 97.78 points.
KSE 100 – Shares Index
Previous 11,139.52, Friday’s 11,028.14, minus 111.38 points.
Previous Rs.2,889.045bn, Friday’s 2,862.753bn, minus 26.292b.
Engro Corporation 4.859m, Lotte Pakistan 4.117m, Fatima Fertiliser 2.924m, Fauji Fertiliser Bin Qasim 2.877m, D.G.Khan Cement 2.463m shares.
TONE:easy,total listed 638,actives 317,inactives 321,Plus 54,minus 159,unchanged 104

Karachi Stocks fall 111 points amid political uncertainty
KARACHI, Dec 16: The shares market finished the weekend session on a bearish note as leading investors, both local and foreign, kept to the sidelines most of the time owing to on-going uncertainty on the memogate issue and other political depressants.But on the other hand, weak holders and jobbers took profits at available margins on low-priced sectors, while blue chips fell again under the lead of overvalued oil and fertiliser shares, mostly for want of fresh support.
An idea of the prevailing uncertainty may well be had from the fact that at one stage, the benchmark breached the psychological barrier of 11,000 points, but covering purchases in some of the leading base shares allowed it to close the week around a 16-week low of 11,028.14, off one per cent or 111.38 points.
Leading base shares, notably Engro Corporation, Fauji Fertilser, National Bank, Fauji Fertiler Bin Qasim and Pakistan Oilfields were leading among the losers.
Analysts said the weakness of the blue chip sector in the absence of demand, both from the local institutional and foreign
investors, continued to inspire fresh selling even by some of the long parties.

If the current offloading trend continued, the benchmark could hit new lows before the end of a current financial year sans year-end buying and portfolio adjustments, they said.
Apart from power loadshedding, the current loadshedding of gas has sent shock-waves among industrialists causing massive layoffs in industrial sector, followed by production losses, which can have an adverse impact on export projection, they added.
Minus signs again dominated the list under the lead of Rafhan Maize and Nestle Pakistan, off 65.56 and 62.33, while Indus Dyeing and Indus Motors managed to end higher by Rs18.48 and 6.04, respectively.
Traded volume fell to 47.641m shares from the previous 52m shares as losers maintained a fair lead over gainers at 159 to 54, with 321 remaining unchanged at the previous levels.
The active list was led again by Engro Corporation, off Rs2.35 at 96.73 on 5m shares followed by Lotte Pakistan, easy by nine paisa at 8.68 on 4m shares, Fatima Fertiliser, lower 24 paisa at 21.26 on 3m shares, DG Khan Cement, off 86 paisa at 18.69 on
also on 3m shares, JS & Co, easy by 25 paisa at 4.52 on 2m shares, and Bank of Punjab, lower 25 paisa at 4.72 on 1.6m shares.

They were followed by SilkBank, lower by six paisa at 1.36 on 1.379m shares, Arif Habib Corporation, easy by 24 paisa at 26.35 on 1.368m shares and National Bank, off 75 paisa at 39.13 on 1.218m shares.
FUTURE CONTRACTS: Engro Corporation led the list of major losers on renewed selling and was marked further down by Rs2.54 at 97.17 on 1.378m shares followed by Fauji Fertiliser Bin Qasim, easy by Rs1.08 at 45.33 on 0.649m shares and Fauji
Fertiliser, off Rs1.96 at 151.73 on 0.596m shares.

They were followed by Pakistan Oilfields, off Rs2.14 at 354.05 on 0.452m shares and National Bank, lower by 79 paisa at 39.30 on 0.399m shares.
DEFAULTER COs: Shakarganj Food again came in for active short-covering and rose by 97 paisa at 6.47 on 27,500 shares followed by Dost Steel, lower by 11 paisa at 1.06 on 52,881 shares and Genertech Power, steady by two paisa at 0.30 on 3,723 shares.
DIVIDEND: Mirpurkhas Sugar Mills, cash 10 per cent plus bonus shares at the rate of 15 per cent for the year ended Sept 30, 2011.

Karachi Stock market in tight bear hug
KARACHI, Dec 17: The controversial ‘Memo’ was thought to be the major culprit that pulled the KSE-100 index down by 436 points or 3.8 per cent in the week ended on Friday to close at 15-week low of 11,028 points.
Also, the fear of foreigners’ flight seemed to be materialising as overseas investors dumped equity worth $11.2 million during the week, representing rapid outflow compared to $4.8 million worth shares sold last week.
Average traded value and volumes during the week stood at $29 million and 44 million shares, showing drop of 7.2 per cent and 1.9 per cent, respectively.
Furqan Punjani, analyst at Topline Securities listed various triggers that cut volumes to 14-year low.
From the start of November todate (29 trading sessions), KSE-100 index has lost 5 per cent or 730 points.
Stock market is inarguably in tight bear hug. Muzzammil Aslam, senior economist at JS Global, stated that the relative valuations and equity as an asset class was least preferred globally, which was why the KSE witnessed a massive outflow of $143 million from July todate — highest 6 monthly outflow since Jan-June 2009, when foreigners had fled with $266 million.
To recall, he says, the market has been in depressed mode since Oct 10, when it last saw a significant rally of 238 points on the back of SBP decision of easing of policy rate by 150bps to 12pc.
KSE index has since shed 7.9 per cent. But in spite of the recent meltdown, the Pakistani bourse has outperformed major stock indices of the world that have taken a deeper plunge in the range of 12 to 22 per cent.
The month to date performance of KSE also presented a bleak picture with the index down by 3.4 per cent.
The economist observed that the primary concern of foreigner was the global meltdown plus some concerns on the US-Pakistan relationship.
“Investors have no reason to excite on low valuations as market is pricing in the bigger risk of rupee dollar devaluation, higher deficit risk, political uncertainty and the overriding inter-corporate debt issue,” he said.
In regard to the week ended Friday, Yawar Uz Zaman, analyst at InvestCap observed: “The gloomy relationships with the US and the fresh Memo conspiracy were the major reasons that kept the stock market under depression.”
On local front, with development activities slowing down due to the onset of winter, cement despatches in the local and export markets for the month of November declined by 5.12 per cent and 9.89 per cent.
Meanwhile, remittances during the first five months of FY12 surged by 18 per cent over same time last year to $5.24billion, while refinery sales also showed healthy growth of 10 per cent in November over the earlier month.
Analysts at KASB research observed that the US Senate and Congress had passed a bill, linking disbursement of $700 million in aid to Pakistan to concrete actions in the fight against improvised explosive devices in the region.
As possibility of foreign funding lines appeared to be drying up, the Rupee-dollar parity hovered at its all time lows of Rs89.6 per dollar.
Furqan Ayub, analyst at JS Global, noted that import growth of 20.2 per cent in the five months of current financial year (FY12) over the same time earlier year, outmatched growth in exports by 7.6 per cent owing to the rise in oil prices and fall in cotton prices.
Overall, imports stood at $18.45 billion while exports were recorded at $9.38 billion.
Resultantly, trade deficit widened by 36.7 per cent to $9.0 billion during five months of FY12.
Furthermore, remittances in November dropped by 9.1 over the earlier month to $924.9million.
Stocks in Al-Ghazi Tractors, Shifa International Hospitals, Colgate Palmolive and Pak Cables were the major gainers during the outgoing week while Pace (Pak) Ltd, TRG Pakistan, Fauji
Fertilizer Bin Qasim, Engro Corporation and Silkbank Limited were major losers.

Regarding the outlook on the market, KASB Research stated that fundamentals and valuations were expected to be temporarily pushed to the sidelines as the surge in foreign portfolio outflows was likely to take on added importance with investors questioning its persistent recurrence.
The local political landscape also remained choppy and noise factor was thought to build up when the Supreme Court resumed its hearing of the Memogate scandal.
Analysts stated that the possibility of stock specific rallies could take place, in anticipation of corporate results, but lack of volumes would continue to hamper price discovery mechanism and add to stock price volatility.
Topline analysts observed that the upcoming result season was expected to pull back investors to the market especially to invest in the high dividend yielding stocks.
However, heightened political noise, global equity sell-off and uncertain domestic economic environment could dampen sentiments.
Draft of futures trading act held up in ministry
ISLAMABAD, Dec 17: The draft of the Futures Trading Act forwarded by the Securities and Exchange Commission of Pakistan to the finance ministry for presentation in parliament is still held up in the ministry as a result investments related to the futures trade in financial markets and commodity exchange are not being made in the country.
Currently the futures trading in Pakistan, either in the commodities or financial products, are regulated under the Securities and Exchange Ordinance 1969 and the Securities and
Exchange Commission of Pakistan Act 1997. Both the ordinance and the act were amended by the Finance Act 2003 to allow for the regulation of a futures market.

The SECP in its covering letter has said that the draft Futures Trading Act provides the legal infrastructure to properly regulate the trading of futures contracts and serves to protect the public interest through a system of effective self-regulation of futures markets, clearing systems, market participants and professionals under the oversight of the SECP.
“The Futures Trading Act will define clearly the role and responsibility of the regulator and also give powers to the regulator to take action against the violators,” said Muhammad Ali, chairman of the SECP. “This way the investors will feel safe to enter the futures market in country when the investments will be secure.”
The futures are primarily used for hedging against price fluctuation risk and for taking advantage of price movements.
The SECP has said that the futures market provides platform to the public for managing and assuming price risks and it enables price discovery and information dissemination under
proper legislative control which serves to ensure trading in liquid, fair and financially secure trading facilities.

An official of the SECP said that like the financial markets the commodity markets are also operating without formal supervision and regulator as the SECP and the commodity exchange has limited powers of intervention and to penalise manipulators.
“Practically the conditions at Jodia bazaar or Akbari mandi and the Karachi Stock Exchange are same — the whole pricing mechanism is being handled by a few individuals,” said an official of the SECP.
The Futures Trading Act offers protection to investors and strives to deter and prevent manipulation or other disruptions to market integrity and to protect all market participants from fraudulent practices.
The act contains provisions to keep check on practices that are unfair to consumers and to decent competition.
The official said that if the futures trading is made the law, it would help the farm sector and provide a marketplace to growers and buyers, decreasing the expanded role of broker agents.
“The market forces will determine the price of commodities in future based on demand, supply and other market forces through transactions in futures contracts,” the official said.
Mohammed Saleem Mansoori

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