STOCK MARKET UPDATE: 04.02.2013

STOCKS

Karachi Stocks Up 23.49 Points:
KARACHI, Feb 01: At the close of trading, the KSE-100 index was at 17,266.23, up 23.49 points.

(Today Market is 38.81 Up@ 11.07 am)

February 01, 2013

5 TOP GAINERS  &  LOOSERS:

Exide Pak	Rs 16.02	Indus Dyeing	Rs (33.10)
Millat Tractors	Rs 13.24	Siemens Pak	Rs (14.44)
Atlas Battery	Rs 11.69	Salfi Textile	Rs (7.39)
Philip Morris	Rs 7.47	PICT	Rs (2.94)
JDW Sugar	Rs 4.50	Thal Ltd	Rs (2.26)

Equity prices rise on corporate profits

KARACHI, Feb 1: Stocks ended higher on Friday as local investors indulged in aggressive buying amid hopes of strong corporate profits for the December-end quarter, but the market closed below its intraday high owing to foreign selling, dealers said.
The KSE 100-share index ended 0.14 per cent, or 23.49 points, higher at 17,266.23 points. It traded in a very narrow range as it made an all-time high at 17,280.94 and low at 17.215.99.
Turnover decreased by almost half to 142.38 million shares, compared with 272.74m shares traded on Thursday and trading value also fell to Rs3.92 billion from Rs6.05bn in the previous trading session.
However, market capitalisation was marginally higher at Rs4.33 trillion, from Thursday’s Rs4.32tr.
“Engulfed with uncertain external factors, the local equities traded in a narrow band, result sensation and attractive valuations however did succeed in keeping the panic away.
Despite mixed views on the monetary stance in the upcoming review low price cement stocks, those have been the beneficiaries of the declining interest rates as has been reflective in the financial results, led the turnover, while frontline stocks from financial and textile sector kept the gains intact on renewed flows, thus allowing the benchmark to maintain the attained levels, after initial negativity,” said Hasnain Asghar Ali from Escorts Capital Ltd.
Dealers said investors were also cautious ahead of the monetary policy announcement which is due on Feb 8. Foreign selling was witnessed as foreigners sold shares worth $4.01 million on Friday after buying a net $3.78m on Thursday. The total for January stood at net $15.42m.
On a week-on-week basis, the market closed one per cent higher, with a fresh all-time high and a record closing.
“Banking, cement and telecom sectors remained in the limelight in anticipation of healthy earnings for December results. While Attock group and Lucky Cement failed to entice investors after their result announcement.
Key highlights of the week remained gas load management plan by Economic Coordination Committee and CPI for January. Going forward, result announcement from PPL and MCB Bank and monetary policy will remain key driver of the market for a shorter week,” said Samar Iqbal, a dealer at Topline Securities Ltd.
The biggest gainer was Exide Pakistan which ended Rs16.02 higher at Rs336.61, followed by Millat Tractors which closed Rs13.24 higher at Rs639.69. Indus Dyeing witnessed the biggest loss as it shed Rs33.10 to Rs628.90, followed by Siemens Pakistan, which ended Rs14.44 lower at Rs605.56. The KSE-30 index ended 0.15pc, or 21.81 points, higher at 14,106.66.
Out of the 325 companies traded, the value of 142 increased, 168 decreased while 15 remained unchanged.
The second and third tier companies dominated the 10 most active traded stocks: Maple Leaf Cement topped the list as it ended 85 paisa higher at Rs17.90 on turnover of 22.7 million shares, Fauji Cement fell marginally 2 paisa to Rs7.99 on 10.32m shares and Byco Petroleum rose 19 paisa to Rs14.13 on 8.17m shares.
Sui North Gas shed 49 paisa to Rs22.85 on 7.06m shares, Lotte Pakpta ended 12 paisa lower at Rs7.34 on 5.62m shares and Bank Alfalah increased by 23 paisa to close at Rs18.72 on 4.9m shares.
Telecard Ltd ended one paisa lower at Rs3.65 on 4.87m shares, Pace (Pakistan) shed 4 paisa to Rs3.11 on 4.77m shares but KESC gained 3 paisa to Rs6.10 on 3.61m shares. Engro Corp shed Rs1.20 to Rs92.90 on 3.68m shares.
KSE banks on cements to scale a new peak: KARACHI: Mainly supported by banks the local stocks took to a new high on Thursday.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.22 percent, or 37.47 points, higher at 17,242.74.
Expectations of imminent results kept cement on the radar.
The cement sector drew strong interest with some investors buying on results and some taking profits, dealers said Thursday.
Maple Leaf Cement closed 4 percent down after announcing its
December results. Fauji Cement was up 2.43 percent at 8.01 rupees.
Karachi Electric rose 3.23 percent to 6.07 rupees.
Pakistan Telecommunication Corporation Ltd fell 0.96 percent to 18.54 rupees.
In the currency market, the rupee ended weaker at 97.70/97.76 against the dollar, compared to Wednesday's close of 97.64/97.69.
Overnight rates in the money market fell to 6.50 percent compared to Wednesday's close of 9.40 percent. (Reuters)

Difficult to foretell stock market peak

KARACHI, Feb 2: Adding gain of two per cent in January, the Pakistani stocks have provided 51 per cent return or more than 50 paisa to a rupee to investors in the last 13 months.
But of greater interest is the fact that the bulls have continued the charge for the eight month in a row; the highest number of uninterrupted months of stock rise since the previous thrilling rally of an equally long period between Aug 2005 and March 2006 the only two such stock movements in over two decades, since 1991.
During January, the benchmark KSE-100 created two spectacular, but oppositive market movements. In one instance, the index nosedived by 525 points, the biggest single trading day decline in four-and-half years as the Supreme Court orders for arrest of sitting prime minister coincided with the fiery speech by new but controversial political phenomenon, Tahirul Qadri to a crowd of his loyal protesters.
And in the second, the index quickly bounced back by a huge 310 points on Jan 17, when the government managed to placate and disburse the protestors. The volatility during the month was at its peak, the index oscillating between 16,108 and 17.243 points. And understandably so.
On the last trading day, Friday, the KSE-100 index had settled at the height of 17,266 points. The index rise for each trading day in the past week, was mostly in two digits, the slowdown representing the difficult and exhausting climb.
Evidently, whatever goes up must come down. But no one can tell with absolute certainty how high the market peak is. Just as a corporate expert says: “There is no yardstick known to man which could gauge, when the market has become over-heated”.
But if one were to ponder on the several reasons for the unstinted run up in share prices, since January 2012, it may be possible to hazard a guess.
Following the negative return provided by the KSE in 2011, the brokers and investors had started to be increasingly restless and noisy. The chief regulator drew up proposals that could put the market back on the track.
The change of methodology in collection of Capital Gains Tax (CGT) centralised through the National Clearing Company of Pakistan (NCCPL) was undoubtedly a big sentiment booster. Together with it, the government incorporated in the Finance Bill, 2013 a provision that exempts investors from disclosing the source of money invested in stock market till June 2014.
Many market participants admit that the law could have channelled flood of liquidity into the market.
The second and equally significant reason for stock upswing, since the index touched the 12,000 points is the passing over the stick in the relay race, to the second and third tier (penny) stocks.
For months everyone is watching more than 80 per cent of the daily traded volume generated by low-priced shares in the cement and predominately the textile sectors.
The herd mentality is quite evident in the process, where investors with small means are pouring money into cheaper stocks, only because there is significant volatility and not necessarily because the company fundamentals warrant a ‘buy’.
In a free market it perhaps is not the job of the regulators to recommend a ‘buy’ or a ‘sell’ and the decision is entirely left to the investor under the guiding principle of ‘Caveat emptor’ buyer beware.Yet, as the scope of scrips in ‘penny stocks’ widen and trading in more and more companies is undertaken by larger number of unsuspecting buyers, it perhaps comes within the ambit of the regulatory framework to caution investors. There are reports of several penny-priced stocks of companies, which have long since disappeared lock, stock and barrel.
If the reason for the rally is the second, namely that undocumented wealth is being funneled through the stock exchange to change the colour from black to white, investors could rest assured that liquidity will drive the prices higher for as many more months as 17, till June 2014. But that is just a random thought.
According to market experts, politics, caretaker Government, elections, law and order situation, the Rupee parity, the Macros, corporate earnings and the IMF programme would determine the market direction going forward.

NCCPL to function as CKO

ISLAMABAD, Feb 2: The Securities and Exchange Commission of Pakistan (SECP) has designated the National Clearing Company of Pakistan Limited (NCCPL) to function as Centralised KYC Organisation (CKO) to facilitate investors and bring more transparency to the KYC (Know Your Client) process.
“The CKO shall develop a centralised web-based system named KYC Information System and maintain separate and exclusive database for the storage of KYC information entered by the market intermediaries”, said a statement issued by the SECP here on Friday.
At present, all entities in the capital market are performing registration/account opening process for their clients separately, which leads to duplication of effort and waste of resources.
All authorised intermediaries will be given access to it through a dedicated user ID and password.
Afterwards an investor who fulfils the KYC requirements through an authorised market intermediary shall be able to open accounts with other intermediaries without repeating the process of submitting KYC documents and the CKO shall provide the relevant information on demand to other intermediaries.
In the first phase the NCCPL will provide centralised KYC services to the brokerage and mutual fund industry and in the second phase the same will be extended to the investors of commodity market and insurance sector.
The CKO concept was introduced in India in 2011, where it has gained widespread appreciation and support among investors and market intermediaries.

MOHAMMED SALEEM MANSOORI