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Thursday, 24 November 2011

DAILY STOCK MARKET UPDATE: 25.11.2011


Stock

Karachi Stocks Minus 4.99 Points:
KARACHI, Nov 24: At close of trading, the KSE-100 index was at 11724.42, minus 4.99 points..(today 10.22 a.m.)

November 24, 2011

TOP  5  SCRIPTS GAINERS AND LOOSERS:
Rafhan Maize
Rs 84.59
Nestle Pakistan
Rs (51.04)
Bata Pakistan
Rs 24.93
Hinopak Motor
Rs (4.32)
Pakistan Oilfields
Rs 7.30
Shahtaj Sugar
Rs (4.00)
Fauji Fertiliser
Rs 7.22
Packages
Rs (2.97)
Attock Petroleum
Rs 6.25
Habib Bank
Rs (2.81)

KSE 30 – Shares Index
Previous 10,916.87, Thursday’s 11,058.59, plus 141.72.
KSE 100 – Shares Index
Previous 11,633.97, Thursday’s 11,729.41, plus 95.44 points.
MARKET CAPITALIZATION
Previous Rs.3,028.621bn, Thrusday’s 3,052.340bn, plus 23.719bn.
VOLUME LEADERS
Bank AlFalah 8.073m, Fauji Fertiliser Bin Qasim 5.891m, J.s.& Co 3.405m, Agard Nine 3.344m, Fauji Fertiliser 3.317m shares.
TOTAL VOLUME
50.796m shares
TOTAL
TONE:steady,total listed 638,actives 321,inactives 317,plus 129,minus 103,unchanged 89
Karachi Stocks stage snap rally of 95 points
KARACHI, Nov 24: The stock market on Thursday staged a snap rally boosted by active short-covering in the feriliser and oil sectors at the lower levels amid relatively improved turnover.
The entire market seemed to have been carried out by heavy short-covering in the index heavy-weight OGDC followed by reports of fresh oil and gas discovery and by the fertiliser sector under the lead of Fauji Fertiliser, Engro Corporation and Fauji Fertiliser Bin Qasim, which virtually raced towards their pre-reaction levels, analysts said.
The KSE 100-share index recovered 95.44 points at 11,729.41 as compared to 11,633.97 a day earlier, more than a half of which was contributed by the OGDC. Each rise of one rupee in OGDC adds 16 points to the index. It rose by Rs2.50.
Floor brokers said apart from positive news from the oil sector, there was nothing special to which the snap rally could be attributed except an attractively lower level reached by most of the current favourites.
“The market was in a highly oversold position owing to last couple of sessions’ persistent fall and needed correction and that came in the form of covering purhchase,” some others said.
They said most of the lading shares, which ensure quick gains were in the firing range and only fools could miss them and leading among them acted in a bit haste, pushing the market again into the plus column.
But they doubted the snap rally could be sustained as news from the political front were not that friendly which could trigger fresh profit-taking at the current rise.
Leading gainers dominated the list under the lead of Rafhan Maize and Bata Pakistan, up Rs84.59 and 24.93, while top losers included Nestle Pakistan and Hinopak Motors, off Rs51.04 and 4.32, respectively.
Turnover figure rose to 50.796m shares from the previous 34m shares as gainers held a comfortable lead over the losers at 129 to 103, with 89 shares holding on to the last levels.
The active list was again topped by Bank AL Falah, steady by four paisa at 11.99 on 8m shares followed by Fauji Fertiliser Bin Qasim, up Rs1.34 at 58.49 on 6m shares, JS & Co, firm 14 paisa at 5.54 on 4m shares, Azgard Nine, steady by 11 paisa at 3.45 on 3m shares, Fauji Fertiliser, sharply higher by Rs7.22 at 175.52 also on 3m shares, Fatima Fertiliser, firm by 46 paisa at 23.03 on 3m shares, and Engro Corporation, higher by Rs2.66 at 131.27 on 2m shares.
They were followed by Lotte Pakistan, firm by seven paisa at 10.17 on 2m shares, OGDC, higher by Rs2.50 at 154.55 also on 2m shares and Arif Habib Corporation, up 50 paisa at 29.19 on 1.389m shares.
FUTURES CONTRACTS: Both the settlements of Fauji Fertiliser Bin Qasim recovered Rs1.32 and 1.30 at 58.58 and 56.50 on 1.022m and 0.985m shares respectively, while Fauji Fertiliser rose by Rs6.71 at 177 on 0.694m shares and its November B contract rose by Rs6.79 at 175.28 on 0.536m shares.
Azgard Nine rose by five paisa at 3.49 on 0.577m shares.
KSE immune to global market downturn
KARACHI, Nov 24: The Pakistan equity market is insulated to a large extent from the free fall in stocks in the world markets.
All participants may not agree with that assertion as the KSE has taken a big dip in the last week and first few sessions of the current trading week. But optimists, such as Faisal Shaji at Standard Capital Securities, are strong proponent of the immunity from other markets, based on low price-to-earnings (p/e) multiple of local stocks; a mouth-watering high yield and no exposure to the western markets.
The free-float based KSE-30 index yields p/e of 7.7 times, whereas the widely followed KSE-100 index trades at p/e of 8.6 times.
“This is the reason that the local market has not seen the kind of freefall, which the Indian bourses have experienced on the issue of European debt crisis,” says the analyst.
Pakistan has virtually no exposure in western markets whereas Indian businesses and financial sectors are strongly linked with outside world, which was why the Reserve Bank of India (RBI) had shown its inability to grapple with its own freefalling rupee against US$ (the Indian currency depreciated by more than 15pc; Indian Rupee reached 52 against US$). Despite being 3rd largest Asian economy and growing at a much faster pace for nearly a decade, Indian economy is pretty vulnerable to international crisis as opposed to this country. “Pakistan is an effervescent economy which can ‘unexpectedly’ rise just in case there is some improvement in ‘certain’ variables,” says Shaji.
Many of the local stocks, particularly in the oil & gas exploration sector could show ‘double digit’ earnings growth of as high as 30 per cent in FY12, but are ‘underperformers’.
A particular big private bank showed 9-10 per cent earnings growth in CY11 alone and provided cumulative annual dividend of 10 per cent, yet its stock is under pressure due to hasty selling by foreign investors.
Brokerage Standard Capital said it believed Pakistan provided immense opportunity to forward looking ‘smart’ investors who may want to make 3-5 months gain based on some of the cheapest valuations of big ticket local stocks in Oil & gas production and exploration; fertiliser, banking, cement, selected refineries and others.
The analyst sets aside the political upheaval, domestic issues and low volumes, as issues that could only be fearful to nervous investors.
Pakistani stock prices were already low and very much ‘factored’ into low p/e trajectory as against regional markets where risks were supposed to be lower.
On the basis of expected earnings the current low prices were thought to provide opportunity to buy.
Some other oddities born out of investor nervousness were identified as the only DAP producer trading at just 4.5 times earnings and its parent fertiliser giant at a hugely discounted 7 times forward earnings.
In cement, the biggest cement company was venturing into the African markets, which currently was regarded as one of the highest growth and investment destinations, but was trading at a paltry p/e of 5 times earnings. Shaji’s report ends.
It is difficult to sift investors for and against the above arguments. Brokers and analysts would obviously sell optimism, for their livelihood depends on it, but even the ardent detractors have been silenced for a moment by the KSE-100 pull back by 95 points on Thursday, in spite of continuous and slow foreign sell. On Thursday, the foreign net sell was witnessed at $1.48 million.

Mohammed Saleem Mansoori

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