STOCK MARKET UPDATE: 03.01.2013

STOCKS

Karachi Stocks Down 304.88 Points:
KARACHI, Jan 02: At the close of trading, the KSE-100 index was at 16489.99, down 304.88 points.

(Today Market is Up 7.08 @ 10.57 am)

January 02, 2013

 5 TOP GAINERS  &  LOOSERS:

Unilever Food	Rs 100.00	Nestle Pak	Rs (133.33)
Uniliver Pak	Rs 69.38	Bata Pak	Rs (59.50)
Khyber Tobacco	Rs 7.06	Shezan Int’l	Rs (19.62)
Millat Tractors	Rs 2.78	Sanofi Aventis	Rs (18.50)
Blessed Textile	Rs 2.10	Mitchells Fruit	Rs (18.15)

KSE index tumbles by 304 points

KARACHI, Jan 2: A massive sell-off was witnessed the Karachi Stock Exchange on Wednesday amid deteriorating law and order situation in the country’s financial capital, rising political uncertainty and also due to a technical correction, dealers said.
“The stock market witnessed panic-selling across the board on rising political noise amid a call for long march on Jan 14 for a powerful caretaker setup ahead of elections,” said Ahsan Mehanti from Arif Habib Ltd.
The KSE 100-share index ended 1.82 per cent, or 304.88 points, lower at 16,489.99 points. It traded in a broad range as it made an intra-day high at 16,808.13 points and an intra-day low at 16,379.52 points.
Turnover increased to 241.22 million shares compared with 119.68m shares on Tuesday. Trading value rose by almost Rs3.5 billion to Rs5.56bn from Rs2.14bn in the previous trading session, but the market capitalisation fell to Rs4.13 trillion from Rs4.22tr on Tuesday.
The market came under heavy selling pressure with political noise, poor law and order conditions and weak macros combining to override attractive valuations and recent positives such as soft CPI and release of Coalition Support Funds.
That said, after the stellar rally in 2012, market participants were anticipating a correction in early 2013 where post near-term weakness, the market’s valuations and strong corporate profitability should drive another rally across the year,” said Raza Jafri, head of research at AKD Securities Ltd.
The current security situation of Karachi is also a grave concern for investors, brokers said.
The energy sector, the heaviest weighted sector, once again witnessed selling pressure as Oil and Gas Development Co Ltd ended Rs4.52 lower at Rs187.40, Pakistan Oilfields shed Rs3.42 to close at Rs432.70 and Pakistan State Oil closed Rs3.77 lower at Rs227.12.
Foreign investors remained net sellers as they sold shares worth a net $2.39 million on Wednesday, compared with buying a net of $134,125 the previous trading session. In December there total net selling to $7.61m. For 2012, foreign investors bought shares worth a net $122.76m.
Banks were the major buyers in the market as they bought equities worth $5.75m. However companies sold shares worth a net $3.06m while individuals sold a net $3.82m.
The biggest gainer was Unilever Food which ended Rs100 higher at Rs4,400, followed by Unilever Pakistan which closed Rs69.38 higher at Rs10,069.38.
Nestle Pakistan witnessed the biggest loss as it shed Rs133.33 to Rs4,600 followed by Bata Pakistan, which fell Rs50.50 to close at Rs1241.50.
The KSE-30 index ended 1.60pc, or 219.20 points, lower at 13,475.74.
Out of the 364 companies traded, the value of just 31 increased, 326 decreased while 7 remained unchanged.
The second and third tier companies dominated the 10 most active traded stocks: Jahangir Siddiqui Company Ltd ended 81 paisa lower at Rs14.77 on turnover of 15.31 million shares, Byco Petroleum closed at its lower limit, after decreasing by Re1 to 13.10 on 13.9m shares and Pakistan International Airlines ended 60 paisa lower at Rs3.82 on 13.78m shares.
Fauji Cement decreased by 21 paisa to Rs6.21 on 12.77m shares, Bank of Punjab ended 79 paisa lower at Rs8.92 on turnover of 8.96m shares and Maple Leaf Cement shed 54 paisa to Rs14.05 on 7.115m shares.
KESC fell 33 paisa to Rs5.44 on 7.09m shares, Azgard Nine ended 53 paisa lower at Rs7.27 on 6.15m shares and NIb Bank shed 9 paisa to close at Rs2.43 on 6.10m shares. Nishat Chunian POwer ended 44 paisa lower at Rs20.46 on 5.57m shares.

Selling at KSE takes away 304 points

KARACHI: The prices of local equities closed lower at Karachi Stock Exchange (KSE) on Wednesday amid concerns over political stability and weaker interest in energy stocks, dealers said.
The Karachi Stock Exchange's (KSE) benchmark100-share index ended 1.82 percent, or 304.88 points, lower at 16,489.99.
Despite a rally in regional markets and oil prices, heavyweight energy companies Oil & Gas Development Corporation, Byco Petroleum and Pakistan Petroleum Ltd. all fell in value, said dealer Samar Iqbal at Topline Securities Byco Petroleum fell 7.09 percent to 13.10 per share. Financial services firm Jahangir Siddiqui was down 5.01 percent to 14.80 per share.
In the currency market, the Pakistani rupee ended weaker at 97.34/97.39 against the dollar, compared to Monday's close of 97.18/97.23.
Overnight rates in the money market ended at 6.50 percent compared to Monday's close of 8 percent.
On Tuesday the currency market and money markets were closed due to a bank holiday. (Reuters)

Foreigners hold $3.1bn worth KSE equities

KARACHI, Jan 2: Foreign investors hold $3.1 billion worth Pakistan equities, which represents 30 per cent of the stock market’s free-float. It also accounts for 7 per cent of KSE’s aggregate market capitalisation of Rs4.2 trillion.
During the outgoing year, foreign portfolio inflow amounted to $125 million, with the market recovering almost the entire net outflow of $127 million in 2011.
But analysts at brokerage Topline Securities pointed out that the overseas investment in Pakistani equities was nowhere near the net purchase of shares by foreigners in certain other Asian emerging and frontier markets. Notable among them were India which saw an inflow of a whopping $24bn; Korea $15 billion and Taiwan $5 billion.
Investment Advisory firm, Magnus Investment Advisors, which tracks investment in Pakistani securities from the perspective of institutional investors both local and foreign calculated returns on equities of nine emerging markets: Brazil, China, India, Indonesia, Malaysia, Pakistan, Philippines, Thailand and Turkey. The period of study was from Nov 1997 to Oct 2012.
It showed that during the 15 year period, the KSE-100 index provided an annual return in terms of US dollars at 9.51 per cent, which was actually the median of the group of the above 10 countries under study. Philippines, Turkey, Brazil ad China had lower returns.
The annual real return in local currency for KSE-100 stood at 6.45pc, which was higher than the median. “The returns are better than expected given the multiple challenges Pakistan has faced during this time period”, the Magnus stated.
The evaluation of risk of KSE-100 on six measures showed that the average dollar loss in the four years was the most revealing risk measure for foreign investors, as it captured historical meltdown risk.
“We found that KSE-100′s average dollar loss in the four worst years was 36.12pc against the median dollar loss of 35.80pc, with Indonesia, Brazil and Turkey posting higher average loss,” the report stated. Thus, the anecdotally held view that KSE-100 has higher risks than other markets was not borne out by facts, it said. The conclusion drawn was that Pakistani stocks did not represent any unusual risk in the universe of emerging countries.
But the important insight gained by Magnus was regarding allocation to KSE-100 for US investors under a mean variance analyses framework. Two constraints were applied, i.e. no shot sales and minimum allocation of 50pc to Standards & Poors’ 500.
Accordingly, Minimum Variance Portfolio of US investors stood at 55.75 per cent; followed by UK 15.59 per cent and China 15.17 per cent. “Investment in Pakistan stocks makes sense for US investors, given the low correlation of 0.14 between S&P-500 and KSE-100″, the analysts say. Magnus admitted that the size and liquidity issues would rule out investment in KSE-100 as a credible option for many large funds, yet the insight could prove useful for a few small to mid-sized institutional investors.

MOHAMMED SALEEM MANSOORI