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Wednesday, 20 June 2012

STOCK MARKET UPDATE: 21.06.2012

STOCK:


Karachi Stocks Down 59.73 Points:
KARACHI, June 21: The KSE-100 index was at 13607.43, down 59.73 points.(today 11.18 am)
June 20, 2012
5 TOP GAINERS  &  LOOSERS:

UniLever Pak
Rs 39.09
Mithchells Fruit
Rs (13.29)
Nestle Pak
Rs 25.14
Island Textiles
Rs (9.43)
Bata Pak
Rs 14.95
Pak Services
Rs (5.06)
Siemens Pak
Rs 13.06
Ismail Industries
Rs (4.93)
Philip Morris
Rs 8.61
Sheezan Int’l
Rs (3.80)

Karachi Stocks shed 15.81 points
KARACHI, June 20: The Karachi Stock market saw the KSE-100 drop by 15.81 points on Wednesday. It settled at 13,667.18 points.
The turnover was low at 47 million shares, 38 per cent down from 76 million shares traded on Tuesday.
Analyst Ahsan Mehanti at Arif Habib Corp stated that the Pakistan stocks closed lower amid record low trades on cautious activity in blue chip stocks after the Supreme Court decision on PM.
Investors awaited announcements regarding nomination of new PM and KSE-100 index traded in narrow range despite recovery in global stocks and commodities.
Gas shortage for fertiliser sector, power crisis for industrial sector and circular debt issues in energy sector played a catalyst role in bearish sentiments at KSE.
Hasnain Asghar Ali, a market expert, observed that the political suspense and the approval of the budget that came after April 26 — the date from which Prime Minister ceases to hold office — were among those which certainly forced the market participants on the back foot.
Gloomy economic and financial issues, accompanied by the recent change in the political setup had, increased nervousness as depicted by substantial decline in turnover.
He suggested caution while carrying out selective accumulation.
“Low volume price erosion is likely to be witnessed in case winds of uncertainty continue to blow,” the analyst said. Abdul Azeem at brokerage InvestCap observed that the KSE-100 index had moved in range-bound trend during the session with relatively low turnover.
However activity with volumes suggested that the index was still in consolidation phase. The trend suggested that the index was continuing to attract selling pressure above 13,750 points level.
Apart from the major event of disqualification of the Prime Minister, the news flow was mixed.
Some included Pakistan’s public debt to GDP ratio, reaching a `crisis level’ at 59.3 per cent by the end of June 2012.
The Large Taxpayers Unit (LTU) Karachi faced with an uphill task of collecting a huge amount of Rs110 billion during the next 10 days to meet its revenue target fixed by the Federal Board of Revenue (FBR) at Rs714 billion for the current fiscal year.
Eight Independent Power Producers (IPPs), namely Atlas, Halmore, Liberty, Nishat, Nishat Chunian, Orient, Saif, Sapphire, having filed a petition in Supreme Court for recovery of their outstanding dues amounting to around Rs62 billion. Two shipments of 80,000 tons of urea having arrived which would cover any shortage during Kharif-2012.
Agricultural credit disbursement by banks surged by 13.11 per cent on year-on-year basis to Rs255.027 billion in the first 11 months (July-May) of the current fiscal year (2011-12).
KSE-30 index fell by 17.07 points to 11,835.43 points.
In total of 344 actives, 144 stocks ended in the red and 114 stood as gainers.
Volume was down 38 per cent to 47 million shares on Wednesday, from 76 million shares traded the day earlier and trading value dropped 32 per cent to Rs1,735 billion, from Rs2,548 billion.
Market capitalisation slipped by Rs5 billion to Rs3.488 trillion, from Rs3.493 trillion.
Among actives, Jah.Sidd.Co declined by 14 paisa to Rs13.32 on 5m shares; DG Khan Cement was down 31 paisa to Rs40.03 on 3m shares, Hub Power Company lost 19 paisa to Rs41.80 on 3m shares, Lotte Pak PTA gained 22 paisa to Rs7.57 on 3m shares, Fauji Fertilizer Bin Qasim added 18 paisa to Rs41.11 on 2m shares, Engro Foods was up 10 paisa to Rs67.06 on 2m shares.


Usual trading at KSE
KARACHI, June 20: To the surprise of many, the Karachi Stock market took the disqualification of Prime Minister Yousuf Raza Gilani, in stride.
The day after the PM’s fall, the KSE-100 index moved between a narrow band of low and high of 13634 and 13781 points, depicting the maximum intra-day loss of 50 points. The index settled after an insignificant loss of 15.81 points. The market actually began on a positive note climbing 98 points to intra-day high of 13,781 points.
Some market participants who were espousing the idea of an initial fall of 100-150 points as inevitable were seen shaking their heads in disbelief.
They admitted that the panic may have subsided after the early hours, but such positive start was startling.
All of that raises the interesting question: What could have saved the market from going over the cliff in early trade? Sure the disqualified Prime Minister was never known to have had great love for the stock market, such as some people think PM Shaukat Aziz had in his days in office.
A stock broker explained that investors had adopted the ‘wait and see’ attitude, evident in the turnover, which totalled to a recent low of just 47 million shares.
He also pointed out that the government and the Parliament were intact.
No one wants to dampen the spirits of investors, but it has to be recalled that one issue that had kept market under pressure up until the adoption of Finance Bill 2012 was the nagging worry over the question whether the Presidential Ordinance of April 12 would or would not be incorporated in the Finance Bill? The Ordinance granted immunity to the disclosure of source of Funds invested in the stock market for two years until June 2014.
With no immediate answers, that issue had resurfaced, as the date of disqualification backdates to April 26, many weeks before the passage of the Finance Bill.
A senior analyst at a major brokerage house observed that according to legal experts the legislative decisions (including the budget) would likely be given constitutional cover in the detailed judgment of the Supreme Court, but the administrative measures could be annulled.
Also the unsettling fear whether the new PM would write the letter to Swiss authorities or the events leading to the disqualification of PM Gilani would be replayed, should have caused some anxiety among the stock investing public.
Yet another market strategist suggested that one more reason that may have prevented panic selling and the small investors’ dash to the exit door could be that they do not hold significant percent of free-float.
The figures released by the National Clearing Company of Pakistan in the evening on Wednesday offered some insight into day’s trading.
Foreign investors, companies and banks had sold stocks in the aggregate value of $10.31 million that day; foreign outflow being $2.02 million.
Mutual Funds bought $4.50 million worth equity and Individuals were aggressive buyers, mopping up stocks valued at $3.35 million.
A market expert wondered if the ‘individuals’ could be further broken up in: high-net worth individuals (setting some benchmark of maximum sum invested), the small investors and the equity bought by brokers to put the plank under the fall.
A broker who argued against suggestion of market manipulation said that such support, if at all, could not be extended for an indefinite period of time.
All of which leaves the trading pattern in the next few days as interesting to watch.
ANNOUCEMENTS/COMPANY NEWS:
1) PSO, Parco sign accord: KARACHI: Pakistan State Oil (PSO) and Pak Arab Refinery Limited (Parco) have signed an agreement whereby the latter will provide POL products to the former from its mid-country refinery.
Parco is Pakistan’s only refinery capable of producing low sulphur Euro II quality diesel, says a spokesperson of PSO.
He said the refinery’s throughput would increase to 80 per cent from 50 per cent and PSO will get the POL products as per its market share.
He recalled that previously refineries used to allocate POL products as per the respective market shares of various oil marketing companies (OMCs) and PSO’s priority used to be on international payments to save the company and country from default. The financial constraints did not allow the company to make timely payments to the refineries due to which local production suffered, he said.
Now PSO management has embarked upon a strategy of domestic self-reliance by maximising fuel uplift from local refineries.
This will result in multiple benefits including reduced dependency on foreign fuel imports, increased throughput of local refineries and savings of foreign exchange worth an estimated $130 million per annum.
According to the terms of this accord, PSO will open local Letters of Credit (LC) for Parco which will result in confirmed payments to the refinery in a timely manner thereby enabling Parco to increase its production.
The spokesperson said this arrangement promises to be a win-win situation for the country, its people as well as the companies.
According to this agreement, PSO will be able to strengthen its product supply chain and avoid tying up its funds in bulk imports, while Parco would benefit through a more cost effective utilisation of its refinery operations.
Furthermore, savings on inland freight charges for motor gasoline and diesel transportation from port to mid-country region would provide additional benefits to the end consumers.
MOHAMMED SALEEM MANSOORI

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