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Thursday, 23 February 2012

DAILY STOCK MARKET UPDATE: 24.02.2012



Stock

Karachi Stocks Up 115.85 Points:
KARACHI, Feb 24: The KSE-100 index was at 12631.77, up 115.85 points.(today 12 Pm)

February 23, 2012






TOP  5  SCRIPTS GAINERS AND LOOSERS:

Unilever Pakistan
Rs 76.23
Siemens Pakistan
Rs (46.20)
Colgate Pakistan
Rs 34.80
Sheezan International
Rs (4.86)
Nestle Pakistan
Rs 34.64
MCB Bank
Rs (4.46)
Wyeth Pakistan
Rs 31.97
OGDC
Rs (3.53)
Millat Tractors
Rs 16.43
Attock Petroleum
Rs (3.08)



KSE 100-index sheds 87 points
KARACHI, Feb 23: The highly overbought share market on Thursday took a technical breather after last five weeks sustained run-up as investors made an excuse the below analyst predictions interim OGDC payout.
“An interim earning of Rs9.67 per share and dividend of 15 per cent by the OGDC may not be that bad,” said a leading analyst “but a section of bears was in search of excuses to take profit and made the index-heavy OGDC as a scapegoat”.
But analysts were also expecting bonus shares, which were omitted by the management and the consequent sell-off.
The rise and fall of Re1 in its share value contributes either way 17 points and the Thursday’s decline of about Rs4 just at the heels of an identical overnight rise alone chipped away 70 points from the index, they said.
However, the sell-off appears to be technical rather than real as some of the positive basic fundamentals still point to a bull market in the coming weeks, some others said.
The benchmark KSE 100-index, in which OGDC holds a weightage of 17 per cent, was marked down by 87.75 points at 12,515.92 after early having risen to 12,623.88 points on pre-result buying flurry.
The sustained rise during the last five weeks has made the market ripe for a technical correction and bears strike back after the
OGDC announced its interim working results, floor brokers said.

They said interim payouts from the auto sector, notably cash dividend of 80 per cent by Indus Motors and 20 per cent by the Kohinoor Energy and final of 100 per cent by Sanofi-Aventis were well received in the market and hoped for further good news
in the coming sessions.

Although losers were led by Unilever Pakistan and Shezan International, off Rs46.20 and Rs4.86, the gainers were topped by Unilever Foods and Colgate Pakistan up by Rs76.23 and Rs34.80 respectively.Traded volume fell to 178.045m shares from the previous 272m shares as losers held a fair lead over the gainers at 160 to 112, with 75 shares holding onto the previous levels.
The active list was led by JS & Co, up 62 paisa at Rs10.37 on 41m shares followed by Azgard Nine, firm 34 paisa at Rs7.45 on 18m shares, Fatima Fertiliser, easy by 16 paisa at Rs23.84 on 10m shares, Pace Pakistan, steady by 11 paisa at Rs2.27 also on 10m shares, Bank of Punjab, lower 12 paisa at Rs8.28 on 7m shares, Bank Alfalah, easy by four paisa at Rs13.84 on 6m shares and Soneri Bank, easy eight paisa at Rs5.80 also on 6m shares.
They were followed by D.G. Khan Cement, lower nine paisa at Rs25.93 on 6m shares, Nishat Power, off 99 paisa at Rs14.83 on 5m shares and TRG Pakistan, easy by two paisa at Rs2.46 on 4m shares.
FUTURE CONTRACTS: D.G. Khan Cement led the list of actives on this counter, steady by 13 paisa at Rs26.23 on 1.471m shares followed by its ruling contract, easy by six paisa at Rs25.95 on 1.388m shares and National Bank, off 70 paisa at Rs49.50 on 0.842m shares.
Engro Corporation followed them, firm by 11 paisa at Rs101.19 on 0.742m shares and Arif Habib Corporation, up 23 paisa at 30.35 on 0.739m shares.
DEFAULTER COMPANIES: Dost Steels came in for profit-selling at the higher levels and ended lower by seven paisa at Rs2.13 on 52,568 shares followed by Brothers Textiles, steady by one paisa at Rs0.70 on 22,505 shares, Genertech Power, unchanged at Rs0.55 on 19,689 shares and Kohinoor Industries, higher by 26 paisa at Rs2.26 on 26,143 shares.
Sardar Chemicals and Ansari Sugar were traded unchanged for the former and Re1 lower for the latter.

Small investors flock back to stock market
KARACHI: Riding on the wave of rallies in regional markets, the Pakistan equities have also gained 11.1 per cent since the start of the current calendar year.
A big contribution has come from a quick rise of five per cent in equity values in the last few trading sessions.
The price spurt is supported by the return of small investors, represented by a surge in daily traded volumes.
Compared to last quarter average daily volumes of 59.7 million shares, valued at Rs2.8 billion or $32.2 million, the average daily volumes at the KSE in the current quarter has mounted to 119 million shares, worth Rs3.7 billion or $41 million.
The volumes though far lower than average daily trading in 300 million shares of the value of Rs24.8 billion or $417.5 million, witnessed in the golden era of 2003-07, they nonetheless signify a return of the small investor to the market. The confidence
appears also to be souring in purchasing shares on borrowed money. The curse of the ‘badla’ is buried in memory.

Mohammad Sohail, CEO at brokerage Topline Securities, points out that leveraged positions in Margin Trading System (MTS) — the replacement of the ‘badla’ — and ‘futures’ have also increased.
He affirms that “those are not at alarming levels so far and far lower than what they used to be in the past.”
A booming stock market and recent margin relaxation and allowing individuals to lend in MTS by the regulators, have all helped ‘open interest’ in the MTS to climb.
On Tuesday, Feb 22, the amount stood tall at Rs877 million. “This level of around Rs900 million is seen for the first time since the new leveraged product was introduced by the regulators in March 2011,” says Sohail.
He asserts that the MTS rate, however, is not on the rise and the average gross rate settled at 16.7 per cent on Tuesday.
“This gives comfort that the market is not over leveraged and there is enough supply of funds in the MTS market,” says Sohail and recalls that years ago when the Karachi bourse was considered to be one of the most actively traded market in Asia, the ‘badla’ financing (sometime called CFS and COT) averaged Rs33 billion with average rate of 15 per cent between 2005-07.
Compared to that, open interest in the current month (Feb) contracts amounted to Rs1.4billion.
Furqan Punjani at BMA capital attributed the share price rise since January this year to much needed announcement of amending Capital Gains Tax (CGT) filings rules addressing source of funding clause.
The share in trading activity of the ‘individual’ class of investors, post the above announcement (on Jan 15, 2012) climbed to 60 per cent from low of 40 per cent in June 2011. “This has also put to rest the speculation that government may not be able to honour its commitment,” says Punjani.
He also mentions that the participation by ‘individuals’ has generated massive activity in low priced stocks.
The analyst pointed out that though the activity seemed to be driven by speculation, the turnaround stories primarily in cement companies and investment gains in holding companies were the fundamental factors behind current rally.
According to the analyst, the small individual investor was the worst hit from imposition of CGT, which was why his participation in daily trading activity had sunk to 40 per cent before the former Finance Minister announced the needed changes in CGT.
Earlier in Jan of 2010, the individual share in trading was 57 per cent, which set a spell of the driest season at local bourse with volumes dipping to their lowest in 12 years; average daily turnover fell to 95 million shares ($44 million) in FY11, even lower than 106 million shares ($57 million) witnessed in FY09, when trading activity had been brought to a halt for over three months, by closing the exit door, through the infamous ‘floor’.
Many market participants said that though the investors were returning in droves to trade in shares since the announcement by the former finance minister, the market still anxiously awaited the SRO by the Federal Board of Revenue.
“It is being considered of vital importance in the settlement of the CGT issue for good,” said one.

ANNOUCEMENTS:
Ø      OGDC posts profit at Rs41.6bn

Mohammed Saleem Mansoori

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