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Sunday, 20 January 2013

STOCK MARKET UPDATE: 21.01.203



STOCKS
Karachi Stocks Up 310.68 Points:
KARACHI, Jan 18: At the close of trading, the KSE-100 index was at 16,601.77, up 310.68 points.
 (Today Market is 66.39 Up@ 11.34 am)


January 18, 2013

5 TOP GAINERS  &  LOOSERS:

Indus Dyeing
Rs 19.49
Rafhan Maize
Rs (98.46)
National Foods
Rs 12.20
Bata Pak
Rs (30.00)
Wyeth Pak
Rs 10.00
Sanofi Aventis
Rs (10.00)
Pak Oilfields
Rs 9.90
Khyber Tobacco
Rs (5.59)
Clariant Pak
Rs 8.63
Blessed Textile
Rs (5.50)
Politics overshadows economics in stock trade
KARACHI, Jan 19: The Karachi stock market took a roller coaster ride in the outgoing week, witnessing the single day heaviest plunge in four years, of 525 points on Tuesday, when nervous investors rushed to the exit door, expecting uncertain times ahead.
The fear was triggered after the Supreme Court ordered arrest of the prime minister in a corruption case. The order came along as Dr Tahirul Qadri was delivering a fiery speech to the mesmerized crowd of followers, protesting precariously close to important buildings in Islamabad. But an agreement led to an amicable solution to the Qadri demands, which brought an end to the ‘long march’.
Confidence returned almost instantaneously and the stocks jumped by 311 points the following day (Friday). All in all, the KSE-100 index lost just 32 points during the week.
Yet, though politics overshadowed economics, institutional and individual long term investors kept one eye on the incoming macro figures. They were encouraged by the country’s current account (C/A) which posted surplus of $250 million for the first half of FY13.
Healthy inflow of Coalition Support Fund (CSF) of $688m enabled a positive balance. But that being a one time item, the current account was thought to be at the mercy of remittances.
“The inflow of workers’ remittances offered considerable support to the current account as it posted a growth of 13pc YoY during 1HFY13 reaching $7.1.1bn, compared to $6.3bn recorded in the same time last year”, stated analyst Abdul Azeem at brokerage InvestCap.

Remittances during Dec 2012 stood at $1.13bn compared to $1.09bn during Dec 2011, showing surge of 5pc YoY. Supported by the $7.1bn inflow of workers’ home remittances, the current account came in the surplus of $250m during 1HFY13 (July-Dec) compared to a huge deficit of $2.5bn last year.
But the question that boggles many minds is whether the C/A would remain at the mercy of remittances. The healthy inflow of remittances could provide support to the current account (C/A) in 2HFY13. Analysts expect remittances to touch $16bn-mark during FY13.
On the other hand, chances of any auction of 3G licenses and payment from Etisalat materialising during the current fiscal year were expected to be slim, while payment of installment to the IMF amounting to $1.7bn was likely to be another challenge for foreign exchange reserves.
Going forward, InvestCap thought that the shortage of gas could have a two-pronged negative impact on C/A balance. Firstly textile being the major sector contributing 54pc to total exports, analyst saw such shortage to injure textile exports in 2HFY13. Also shortage of gas was thought to push up the oil import as reliance on the fossil fuel increases.
Analysts at Arif Habib Limited commented that the country’s larger-than-expected C/A surplus alongside improvement in country’s foreign exchange reserves should add to investor confidence.
“Reserves have lately improved by $244m while few other positives, including restoration of the 80mmcfd gas from Zamzama and Makori fields (next week) and upward revision in
wellhead gas prices should all help equities recover sharply along with better overall volumes”, analysts said.

They noted that strong growth in remittances along with lower import bill remained underlying factors for current account deficit shrinkage. Analysts stated that the country’s current account surplus provided much relief with sustained growth in workers’ remittances and lower imports (down 10pc MoM) outweighed decline in exports (down 9pc MoM) in Dec’12.
The decline in exports was attributed to prolonged transportation strike during Dec 2012. Analysts said that they believed that the descending-to-stable oil prices could have major implications on the country’s imports, going forward, as 38% of the total Imports relate to petroleum products.
“As per our estimates, if oil sustains at $110 per barrel for FY13, we expect C/A deficit to be contained at around $2.0bn or 1% of the GDP”, analysts concluded.
Company News:
Pak Suzuki raises prices by Rs20,000: KARACHI, Jan 19: Pak Suzuki Motor Company Limited (PSMCL) has increased prices of cars by Rs20,000.
Official spokesperson of PSMCL Shafiq Ahmed Shaikh said that the company had passed on very minimum prices to the end users and was still taking a big hit of various cost push factors on itself.
He said the sales and profitability of the company had been declining for the past few months and one of the reasons of low sales volume was suspension of Alto model for the last six months.
Another cause of price hike, he cited, was rupee depreciation against the dollar, which pushed up cost of imported parts.
He added that prices of Jimny and APV vehicles were not increased.
The new revised prices of Suzuki MehranVX and VXR are Rs595,000 and Rs652,000, while the price of Cultus VXRi is Rs1,005,000.
Swift DX, DLX and automatic transmission carry new price of Rs1,171,000, Rs1,251,000 an Rs1,386,000.
The new price of Bolan VX and cargo van is fixed at Rs674,000 and Rs650,000, while Ravi VX is now priced at Rs622,000. Liana RXI carries price of Rs1,452,000.
Chairman All Pakistan Motor Dealers Association (APMDA) H.M. Shahzad the government, while negotiating on used car age limit in November 2012, had urged the assemblers to reduce prices by Rs50,000 and Rs100,000 in small and big cars respectively.
On the contrary the Pak Suzuki, having more than 50 per cent market share, came out with a price increase, while the rest will follow suit.
He did not agree that the losing value of the rupee against the dollar was making a big impact on all assemblers’ cost as they were importing parts and accessories from Thailand and China.
He urged the government to seek assemblers’ view over price hike on various reasons.

MOHAMMED SALEEM MANSOORI

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