Daily Stock Market update: 20 Dec,2011

Stock

Karachi Stocks Down 12.86 Points:
KARACHI, Dec 20: The KSE-100 index was at  11070.17, down 12.86 points. 

December 19, 2011

TOP  5  SCRIPTS GAINERS AND LOOSERS:

Nestle Pakistan	Rs 101.02	Engro Corporation	Rs  (4.76)
UniLever Pak Ltd	Rs 59.65	Ferozsons (lab.)	Rs  (3.02)
Rafhan Maize	Rs 36.11	Tri-Pack Films	Rs  (2.85)
Wyeth Pak Limited	Rs 31.88	Mirpurkhas Sugar	Rs  (2.16)
P.S.O.	Rs 5.89	Pakistan Oilfields	Rs  (1.31)

KSE 30 – Shares Index	Previous 10.154.14, Monday’s 10.161.18. plus 7.04 points.
KSE 100 – Shares Index	Previous 11,028.14, Monday’s 11,083.03, plus 54.89 points.
MARKET CAPITALIZATION	Previous Rs.2,862.753bn, Monday’s 2,876.230bn, plus 13.477bn.
VOLUME LEADERS	Lotte Pakistan 4.913m, J.S.& Co 4.317m, Engro Corporation 3.493m,D.G.K.Cement 2.764m, Fauji Fertiliser Bin Qasim2.384m shares.
TOTAL VOLUME	36.453m shares
TOTAL	TONE;Steady,total listed 638,actives s301,inactives 337,plus 116,minus 95,unchanged 90

KSE-100 Index recovers 55 points on president`s return

KARACHI: The shares market resumed trading on a steady note as investors covered positions on selected counters on the perception that the present setup may be well in place after the return of the President from Dubai.

The bulk of the support originated from institutional investors, which some analysts presume could be `inspired` as was reflected by mostly fractional price changes and light volumes.
The KSE 100-share index recovered 54.89 points at 11,083.03 as compared to last week`s 11,028.14 as some of the leading base shares managed to close partially recovered under the lead of oil shares.
But on the other hand, leading fertiliser shares, which are known market trend-setters remained under the pressure and ended further lower under the lead of Engro Corporation and Fauji Fertiliser.
“Rumours may have died for the moment but only paving the way for others,” some leading analysts believe.
“The next couple of sessions will unfold whether or not the prevailing political uncertainty will end.”
But cautious buying reflects that investors may like to know some more details about the sudden exit and return of the President, notably after talk with the army chief, they said.
Floor brokers said the fall in turnover figures showed that investors just filled in gaps here and there but did not opt for fresh covering at the attractively lower levels.
Investors will await fresh developments on the local political front in the backdrop of a galore of public meetings by various parties, although they have no relevance to the ground situation as the national elections are still far way, they added.
But active covering purchases on the forward counters at the current lower level, notably in National Bank, Fatima Fertiliser and some low-priced issues reflects that investors hopes about the return of normalcy in the current political mess and active year-end portfolio adjustments on the corporate sector.
Leading gainers were led by Nestle Pakistan and Unilever Pakistan, up by Rs101.02 and 59.65, while losers were led by Engro Corporation and Ferozsons Lab, off by Rs4.76 and 3.02.
Traded volume fell to 36.453m shares from the previous 48m shares but gainers held a strong lead over the losers at 116 to 95, with 90 shares holding on to the last levels.
The active list was topped by Lotte Pakistan, up 39 paisa at Rs9.07 on 5m shares followed by JS & Co, lower by 25 paisa at 4.27 on 4m shares, Engro Corporation, off Rs4.76 at 91.97 on 4m shares, DG Khan Cement, easy 59 paisa at 18.10 on 3m shares, Fauji Fertiliser Bin Qasim, up 72 paisa at 45.87 on 2.364m shares, Azgard Nine, steady by five paisa at 3.10 on 2.191m shares, and Fatima Fertiliser, firm by 16 paisa at 21.42 on 2m shares.
They were followed by Fauji Fertiliser, off Rs1.26 at 149.98 on 1.239m shares, National Bank, up 64 paisa at 39.77 on 1.035m shares and TRG Pakistan, easy two paisa at 1.17 on 0.916m shares.
FUTURE CONTRACTS: Engro Corporation remained under pressure and shed another Rs4.76 at 92.41 on 1.295m shares followed by DG Khan Cement, off 56 paisa at 18.17 on 0.823m shares, and Fauji Fertiliser, lower by Rs1.02 at 150.71 on 0.686m shares.
They were followed by Fauji Fertiliser Bin Qasim, up by 61 paisa at 45.9 on 0.535m shares and National Bank, steady by 68 paisa at 39.98 on 0.308m shares.
DEFAULTER COs: Modest activity was witnessed on this counter amid slow demand. Brother Textiles led the list of actives, lower seven paisa at 0.45 on 32,000 shares followed by Kohinoor Industries 27,406 shares and Shakarganj Foods, up six paisa at 6.53 on 14,000 shares.
DIVIDEND: On the corporate front, another good payout was announced by Mirpurkhas Sugar Mills, which came out with a cash of 7.5 per cent plus bonus shares of 10 per cent for the year ended Sept 30.

Modest stock recovery forecast for 2012

KARACHI, Dec 19: Disenchanted by the performance in the current year–nine sessions now remaining to the end of the year– stock strategists have already started to plan for the year ahead.
Topline Securities Research believes that investors in Pakistan equities would keenly follow the foreign flows and political developments in 2012. “These two factors will remain major market movers next year while volumes are likely to remain dull,” say the analysts.
In the year 2011 to date, the Pakistan equities have yielded a negative return of 8 per cent (12 per cent in dollar terms).
Currently Pakistani stocks are trading at close to 3-year low valuation with price-to-earning (P/E) ratio of 5.1 times (5.8 times including OGDC). The dividend yield materialised at 11 per cent (9 per cent with OGDC) which was close to T-Bill yield. But for 2012, analysts expect the stock market to post a modest recovery with KSE-100 index to close at 13,000.
If that be true, the equity market would be giving out estimated gains (inclusive of dividend yield) of 18 per cent (12 per cent in dollar terms).
“We expect energy and fertiliser stocks to continue to perform in 2012 due to strong fundamentals while few banks may do well once the process of economic recovery begins,” say analysts. Yet it would be the foreigner who would have the major say in determining the direction of the market.
Analysts state that in spite of Pakistan being relatively resilient from fragile condition of the West, it cannot remain completely immune. With volumes plummeting to 10-year low at Rs3.6 billion ($42million) a day, the net selling of $118 million by foreigners, could be pointed out as major reason for stocks decline as local investors remained shy, shaken also by the various political issues being faced by the government. Foreign funds still hold Pakistani equity worth $2.4 billion (29 per cent of free float), which could be the major mover and shaker for the equity market in 2012.
“Thus we believe that prolonged global economic crisis, economic slowdown in Pakistan and strained Pakistan-US relations will force risk-averse foreign fund managers to trim their exposure at least in first half of 2012, thus keeping Pakistan market to trade at discount to its historical average price-to-earnings ratio of 8.0 times,” analyst said, adding that as Pakistan equity had shown relatively better performance compared to the regional peers in 2011 and its discount over other markets had shrunk, offshore fund managers may also be compelled to offload their position to rebalance their portfolio.
On the positive side, analysts peer to see the local political scene ahead. Could there be an early election? That and any sign of improvement in relationship with US, biggest foreign investor in Pakistan, might bring cheer to the market, analysts say, posting a possible hasty recovery.
Some analysts at other brokerages, however, do not see a political upheaval in the country as a stimulant for investors to accumulate stocks. But most stock pundits do admit that foreigner fund managers have their hands on the rudder and they could steer the market in either direction until the local investor sentiments starts to improve

Mohammed Saleem Mansoori