Tuesday, September 29, 2009
Market Close !
Pakistan equities witnessed a volatile trading session with KSE100 index closing flat at 9,475. Index heavyweight banks and Oil stocks recovered yesterday's losses as market surprised many with a sharp upturn in early trading. Recent laggards, financials (UBL, MCB and NBP) led the gainers today ahead of Monterey Policy Announcement with expectations that State Bank could announce further relief on Forced Sale Value (benefit to smaller banks/banks with rising bad portfolio) and cuts in CRR and SLR. On the flip side, telecom giant PTC remained under pressure the entire day closing at lower lock as it announced last minute FY09 EPS1.79 with investors disappointed on NO payout despite PKR26bn Cash reserves (USD313mn).
Monday, September 28, 2009
Market Close !
Equities remained weak throughout the day after Saturday's gory suicide bombings in Northern region threatening the recent peaceful environment. Besides, market seems to be wary of the recent FoDP meeting that failed to yield anything concrete except for the usual aid/support commitments, clearly indicating some influential friends are not comfortable with our Government. Oil stocks remained weak after international prices eased off sparking a sell off in oil stocks that are heavily weighted on the index, fuelling selling by locals, probably feeling they may buy back at lower prices. Another reason for today's sell off can be attributed to September quarter end profit taking by domestic institutions and probably taking advantage of lack of foreign activity today. Interestingly, the stocks to suffer most were the FII's favorites such as MCB, ENGRO, PSO and of course OGDC. The star performer remained JSCL which traded over USD15.4mn worth shares today indicating market is still very bullish in the holding company ahead of its 1QFY10 earnings.
We feel market will bounce back tomorrow ahead of the Central Bank's Monetary Policy where market is expecting 25-50bps rate cut, in line with the current trend being followed by the State Bank. Moreover, market is also expecting a possible cut in CRR and SLR, which will ease some liquidity in the banking system.
Saturday, September 26, 2009
Market Close !
We believe that Friends of Democratic Pakistan aid and support by USA (Kerry Lugar Bill and Coalition Support Fund) could potentially lead to international ratings agencies further upgrading Pakistan's sovereign credit rating.
Friday, September 25, 2009
Thursday, September 24, 2009
Market Close !
As the index continues its incline, we recommend a cautious approach as market is in the over bought zone and expect a correction in the range of 3-5%. Key event today is FoDP meeting in New York and Monetary Policy Statement on September 29, although we do not expect any changes in the discount rate.
Friday, September 18, 2009
Market Close !
Pakistan equities witnessed massive activity ahead of FoDP meeting gaining 2.31% to close above 9,400. From the onset the tone was set after JSCL announced its FY09 resulting posting loss per share 18.88. The stock took the news very well closing up 5% with over USD10mm traded today (as players believe worst os over for the stock). PSO remained buoyant today as circular debt issue in the energy sector gets govt priority with others undergoing some profit taking (OGDC & PPL opened ex today). To the surprise of many, PTC PA hit upper lock with company set to announce FY09 results (market looking at a PKR1/sh cahs payout). Banking stocks rose with the market with UBL hitting upper price lock in early trading. Sector closed 3.4% as lagging stocks gain.
Market will now shut till Wednesday Sep 23 during which Friends of Democratic Pakistan meeting having taken place in NY. With continued FII interest
Thursday, September 17, 2009
Market Close !
Yesterday's positive momentum continued led by massive activity in oil stocks. PSO remained strong for the 2nd consecutive day on the back of PKR85bn TFC issue to retire circular debt. Banking stocks previously underperforming rising market finally edged up, led by MCB and NBP, incidentally today's volume leader. On the banking side, there is also talk that Arif Habib Bank AHBL PA is set to acquire My Bank MYBL PA, Atlas Bank ATBL PA and RBS Pakistan operations. Despite activity in oil and banks, cement stocks failed to shine as D.G.Khan Cement announced its FY09 result posting an EPS of PKR1.99 which was below the general market expectation.
With Eid break looming ahead (Sep 21, 22 & 23 Mon-Wed), we expect market to stay strong accompanied by consistent foreign inflows. Additionally, major triggers such as FoDP meeting (Sept 23) and a possible rate cut in upcoming monetary policy (Sept 29) are likely to keep market players active.
Market Close !
We expect the market to test 9,500 before Eid holiday break. Market is bracing itself for possible discount rate cut and some good corporate earnings, besides continuous focus of foreign funds which is providing much needed liquidity. Both PPL and OGDC will open ex on Friday and expect further excitement in them. Keep an eye on JSCL, with company set to announce its FY09 results after market tomorrow. Take advantage of weakness.
Market Close !
Market remained sideways owing to lack of triggers and more so lethargic mood from locals as Ramadan draws to a close. Locals were some what disappointed after yesterday’s net out flows from foreign funds, which is incidentally the first time in a month. All day stocks remained weak with jobbers selling who were inclined to buy lower, whereas some key local funds were seen selling oil and textile shares. Banks were down after yesterday’s gains exhibiting a total lack of interest. OGDC late announcement of yet another discovery, although negligible, took the stock into the green, as investors took long positions wanting to take cash dividend. The discovery in the mining lease DAKHNI No.11 is a development well and it’s the 1st time that formation has been successfully tested which means the area is vast and going forward other discoveries could come about.
Monday, September 14, 2009
Market Close !
Market remained dull as investors decided to remain sidelined ahead next week holidays. Equities opened up greeting new oil & gas discoveries made by OGDC in the NASHPA-1 well that will further impact earnings for the company by PKR0.55/share and PPL’s PKR1.31/share. The new discovery failed to excite the market as both E&P giants are trading SPOT (T+1) for cash and bonus payout, and possibly because locals tend to curtail their trading activity during last week Ramadan. Foreign funds activity seemed low as well possibly waiting for locals to exhaust their selling or probably not keen to push the market ahead of long holidays next week (due to Eid holidays). Interestingly financials particular smaller ones were sought after Finance Minister reportedly said that a proposal could be in the offing to exempt tax deducted on all NPL’s that may give some of the banks breathing space.
The market is now looking at two key events that could decide market direction. 1) Friends of Democratic Pakistan meeting in New York on Sep 23 and 2) Monetary Policy on Sep 29 that may see discount rate reduced by 50bps.
Source: Equities go slow
Friday, September 11, 2009
Market Close !
With a shorter next week (Friday holiday due to religious festival), we expect market to remain volatile with index likely to test 9,500 before the weekend close. We recommend financials and fertilizer stocks, FFC being the top pick (highest yield).
Source: Remittances lead market higher!
Market Close !
Equities witnessed a volatile session on reported local funds profit taking closing down 1%. Contrary to expectations market remained under pressure right from the start as major local institutions resorted to profit taking. NIT was rumored to have been major sellers today in order to cater to redemptions. However local selling was sustained by inflows from FII's which have been consistent over the last few weeks, albeit a little lower compared to last week, probably as foreign funds are in no hurry to push aggressively at current levels. Interestingly, August's CPI inflation number of 10.69% was neutral as the figure was somewhat in-line with expectations. OGDC PA was the major culprit as investors opted to sell and take long positions in PPL, POL and FFC, all offering better upside and yield.
Although market is likely to remain volatile at current levels, we expect sentiment to remain positive ahead of monetary policy announcement and consistent FII inflows.
Source: See-saw at 9,000 level
Market Close !
Equities witnessed a volatile session on reported local funds profit taking closing down 1%. Contrary to expectations market remained under pressure right from the start as major local institutions resorted to profit taking. NIT was rumored to have been major sellers today in order to cater to redemptions. However local selling was sustained by inflows from FII's which have been consistent over the last few weeks, albeit a little lower compared to last week, probably as foreign funds are in no hurry to push aggressively at current levels. Interestingly, August's CPI inflation number of 10.69% was neutral as the figure was somewhat in-line with expectations. OGDC PA was the major culprit as investors opted to sell and take long positions in PPL, POL and FFC, all offering better upside and yield.
Although market is likely to remain volatile at current levels, we expect sentiment to remain positive ahead of monetary policy announcement and consistent FII inflows.
Source: See-saw at 9,000 level
Wednesday, September 9, 2009
Market Close !
Equities further shed 1.28% on lower volumes as market players continue to book profits at current levels. Nonetheless support was witnessed below 8,800 level with strong FII interest mainly in Oil stocks. PPL PA traded in the opposite direction to market all day with talk of aggressive FII accumulation that subsided local selling. Interestingly, rumors of Bank of Punjab calling redemptions in the market from its investments in mutual funds could likely have triggered broader market selling. Bank of Punjab Treasury has already announced plans and made preparations to invest in equities from its own desk. Financials also were under pressure with UBLhitting lower price circuit mid day.
We expect volatile trading in the coming days as market consolidates at 8,800 to 9,000levels. FoDP meeting and MPS announcement later this month could spark some interest in lagging stocks.
Source: Market sheds further 1.28%
Tuesday, September 8, 2009
Monday, September 7, 2009
Market Close !
Market came in for profit taking after last week’s gains closing below 9,000. Barring PPL which was strong throughout the day, oil stocks underwent selling at current levels given some stocks were now trading near their fair values. OGDC finally closed in the red after having performed exceptionally well over the past few weeks as was the case for banks despite some positive news with respect to a possible enhancement of forced sale value advantage for financials carrying bad loans. With an overbought market, and probably not so aggressive foreign funds participation, local funds preferred to sell with a view to buy back at lower prices. News reports that World Bank has proposed corporate taxes to stock broking business and Japanese Governments announcement to stop Aid with Pakistan facing the severest was not good news for the market.
We feel the market was ripe for a correction that has been witnessed today. We expect stocks to consolidate at current levels with continued interest in PPL, POL, NML and possibly some other side stocks such as JSCL and ANL. We maintain our positive view on the market and suggest to remain long in banks, PPL, POL, NML, ANL.
Source: Market Fails to Sustain 9,000 levels
Friday, September 4, 2009
Market Close !
With market managing a close above 9k, +5.4% WOW and approx USD80mn FII inflow, we expect volatile trading next week. We continue to advise reducing exposure in Oil barring PPL and PSO and staying long in banks and 2nd tier stocks. A key trigger for the market will now be the Friends of Democratic Pakistan meeting in NY on SEP23 which will be co-charied by President Obama, PM Gordon Brown with expectations of USD1.5 grants.
Source: Closing Bell - Market breaks Year end target
Thursday, September 3, 2009
Market Close !
After index increase of 2.96% during last 4 working days, equities finally took a breather today. Volumes were also lower compared to the hefty turnover earlier this week, which can be attributed mainly to the lack of major activity by FII's today. Moreover market remained under pressure on account of the political situation with a failed assassination attempt on the Minister for religious affairs (very vocal against Taliban). Additionally newspaper reports about National Assembly Standing Committee probing privatization done by previous Government that includes PTC, HBL, KESC and Pak Steels (these deals cannot be undone because of Pakistan Guarantees) prompted profit selling by local institutions.
Given today's correction, which should be viewed very positively, we expect stocks to remain volatile with interest in key stocks on dips. However we believe that inflow by foreign funds will continue to shape the medium term outlook.
Source: Closing Bell - 9,000 remains elusive
Wednesday, September 2, 2009
Market Close !
Market continued to show signs of resilience despite profit selling in Oil stocks. Financials performed exceptionally well on foreign funds interest who are betting on improved macro economic situation and expectations 3QFY09 earnings will be healthier. Oil stocks underwent some pruning as investors booked gains given some oil stocks had risen exceedingly, although a late hour notice from the exchange confirmed NASHPA-1 reserves increasing marginally. Earnings impacts are meager with today's increase but will continue to keep interest in the stocks in the day's to come (notice attached). Barring BAFL, almost all major banks were at upper lock, a sight not witnessed for a long time, indicating strong interest from locals but more so foreign funds. Interestingly, MCB closed flat, finally taking a breather, whereas NBP and UBL were strong, with smaller banks being laggards in the current bull run.
The market continues to show signs of strength, despite increased political noise between the ruling PPP and PML-N, that will probably climax after Ramadan. Locals seems to be confused with the spate of foreign funds buying over the last few days, taking everyone by surprise. If FII buying remains, one can expect the market testing 9000 levels soon.
Souce: Closing Bell - Banks outperform market
Tuesday, September 1, 2009
Market Close !
Equities witnessed extreme volatility with USD240mn worth of shares changing hands closing +1.08%. Volumes were exceptional at 277mn shares with locals booking gains mainly in Oil stocks and talk of continued foreign buying. Mid day dip of over 4.2% from day high, dropped as a bombshell with retailers running for cover. Sustained support pushed the market back in green zone and closed firm above 8750. Reportedly, NIT State Enterprise Fund (support fund) was active today taking advantage of the current rally selling Oil stocks. OGDC remained in the limelight trading over 38mn shares (one year SMAVG Volume 11.9mn shs). Company confirmed Oil discovery in Nashpa Oil Field after close with an EPS PKR0.36 impact on FY10 earnings (notice attached). In line with our expectations, financials continued on yesterday's momentum with major stocks (NBP PA, MCB PA and UBL PA) closing at their respective upper checks (+5%). Cement stocks rebound today after manufacturers succeeded legal stay order against penalties imposed on charges of cartelization.
With foreigners taking keen interest in Oil and now seemingly Financials, one can expect market to test the all so important 9k level in the coming few days. Having said this, we continue to advise switching from Oil to Banking stocks and recommend trading positions in AICL PA, JSCL PA, LUCK PA and DGKC PA at current levels. Expect continued volatility.
Source: Closing Bell - Extreme Volatility at 8900 levels
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