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THE KASB REVIEW
STOCK MARKET AT A GLANCE

  1. FINEX WEEK
  2. STOCK WATCH
  3. STOCK MARKET AT A GLANCE

An exclusive weekly Stock Market report bt Khadim Ali Shah Bukhari & Co.

Updated on Jan 06, 2001

The stock market, in our opinion, is entering into a correction-consolidation phase, which could last for a few weeks. After the year end euphoria, the market started the new year on a positive note. Between Dec 26th and Jan 5th, the KSE-Index rose by 38 points from 1507.6 (the last trading day in CY00) to 1545.9 about 1% up. The market closed at its major support of 1546 on a high volume of 196.9mn shares on Friday. High badla (COT) rates, ranging between 22-25% in key scrips suggest market may be in the over-bought zone in the intermediate term. This might lead to some further correction early in the coming week.

An element of bearishness has been injected by a large sell order in PTCL on Friday just before market close. If the weak-holders are not able to absorb this selling, the market could become susceptible to a short term bout of switch correction with risk extended to 1510 levels.

On the other hand, if institutional buying comes in at current levels and the market bounces back from the 1546 levels next week, we could see it testing 1570 levels. However, we continue to hold the view that the market is becoming overdue for a correction. As such, we would recommend the value investors do not rush into the buy side in general. There are specific opportunities in the telecom, textiles, gas and to some extent fertilizer sectors, where investors should accumulate on technical weakness as fundamentally these sectors are on a relatively stronger footing than others.

In terms of specific scrips, PTCL was the star of the new year's first week, rising 4.7% on a huge volume of 299.49 million shares. The performance would have been even better as the scrip touched a high of PkR23.40 on Friday. But late session selling by a foreign fund (reported to the tune of 12 million shares) took the wind out of PTCL's bull run. We believe that the sell-off may be linked to the rally on the NASDAQ and in India. The latter rose 14% after the surprise 50 bps cut in interest rates by the Federal Reserve (US). The rally in technology stocks obviously led the turnaround in India. We believe, however, that the markets may have over-reacted. Looking at fundamentals, our economist believes that it will take a much more aggressive easing by the Fed to arrest the slowdown in the US economy. In any case, the impact of the Fed action on the real economy will likely take 8 months in manifesting itself. Thus the underlying weakness of the technology sector is not ending in a hurry.

We, therefore, feel that foreign funds jumping aggressively back into technology sectors in Asia may be acting prematurely. If anything, our view is that selective major blue chip stocks in Pakistan will continue to offer a better risk-return trade-off over the coming six months.

Our intermediate term stance on the key stocks is as under:

Scrip

Recommendation

PTCL

Strong Buy

Hub Power Co

Buy

Kohinoor Energy

Buy

Fauji Fertilizer

Strong Buy

Engro Chemicals

Buy

Nishat Mills

Trading Buy

Ibrahim Fibres

Buy on Weakness

Shell Pakistan

Long Term Buy

MCB

Buy on Weakness

ICI Pakistan

Buy below PkR10

World Call

Buy on weakness

Telecard

Long Term Buy

Packages Limited

Long Term Buy

Tri-Pack Films

Long Term Buy

 


MARKET ROUNDUP

..

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

6.56

6.64

1.22

KSE 100 Index

1507.60

1545.90

2.54

Total Turnover (mn shares)

314.89

1028.16

226.51

Value Traded (US$ mn.)

142.45

526.73

269.76

No. of Trading Sessions

2

5

 

Avg. Dly T/O (mn. shares)

157.45

205.63

30.61

Avg. Dly T/O (US$ mn)

71.23

105.35

47.91

MSCI Pakistan Index:

     

Pak Rs.

99.07

102.88

3.85

US $

44.31

45.00

1.55

.Source: KSE, MSCI, KASB


 
ASIA PACIFIC & AUSTRALIA
EXCHANGE INDEX LEVEL CHANGE EXCHANGE

Bombay

BSE

4183.73

+68.36

1.66%

Hong Kong

Hang Seng

15447.61

+212.58

1.40%

Singapore

Straits Times

1974.82

+54.07

2.82%

Sydney

S&P ASX 200

3300.4

+6.60

0.20%

Tokyo

Nikkei

13867.61

+176.12

1.29%

.


 
EUROPE & UNITED STATE OF AMERICA
EXCHANGE INDEX LEVEL CHANGE EXCHANGE

Frankfurt

DAX

6382.31

+5.77

0.09%

London

FTSE

6198.1

+12.50

0.20%

Paris

CAC

5758.02

-57.97

-1.00%

Dow Jones

Industrial

10662.01

-250.40

 

NASDAQ

Composite

2407.65

-159.18