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CURRENCY BUYING

SELLING

US Dollar 59.9 60
Bahrain Dinar 158 158.1
Canadian $ 50.85 50.95
Euro 70.75 70.85
Hong Kong $ 7.65 7.7
Japanese Yen 0.508 0.51
Kuwaiti Dinar 204 204.1
UK Pound 103.7 103.8
Last updated: Friday 23 Dec, 2005-12.30 P.M (PST)

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3 DAYS FORECAST
In oC

CITIES MIN MAX

HUM%

FOR.

KARACHI
Today 12 26 38 Sunny
Tomorrow 11 27 38 Sunny
Day after 11 28 38 Sunny
LAHORE
Today 1 20 87 Sunny
Tomorrow 2 20 87 Sunny
Day after 2 21 87 Sunny
ISLAMABAD
Today 0 18 59 Sunny
Tomorrow 0 18 59 Sunny
Day after 0 21 59 Sunny
HUM%: Humidity In %
FOR.: Weather Forecast
updated: Fri - Sun 23-25 Dec, 2005

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.

 

KARACHI         - 021 LAHORE          - 042 ISLAMABAD    - 051 FAISALABAD   - 041 MULTAN          - 061 PESHAWAR    - 0521 CANADA          - 1 KUWAIT           - 965 INDIA               - 91 IRAN                - 98 U.K                   - 44 U.A.E                - 971 U.S.A                - 1

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  CAPITAL MARKETS
 
 

 

 

 

 
 PAKISTAN WEEKLY REVIEW

AlFalah Securities (Pvt) Ltd.
Monday, Nov 21, 2005-Friday, Nov 25, 2005

 

BOARD MEETINGS

COMPANY

DATE

DAY

TO CONSIDER

PICIC Commercial Bank Limited

26-11-05

Sat

Recommendation of Steering Committee and Merger Committee of both PICIC and PCBL and to formally approve the SWAP ratio.

P.I.C.I.C.

26-11-05

Sat

Recommendation of steering committee and merger committee of both PICIC and PCBL and to formally approve the SWAP ratio.

Automotive Battery Company Limited

28-11-05

Mon

Half Yearly Accounts duly reviewed by the statutory auditors for the period ended September 30, 2005.

Exide Pakistan Limited

28-11-05

Mon

Half Yearly Accounts for the period ended September 30, 2005.

Prudential Stocks Fund Limited

29-11-05

Tue

KSE-100 WEEKLY MARKET PERFORMANCE

WEEKLY COMPARISON

 

CURRENT
25-NOVT-05

PREVIOUS
18-NOV-05

CHANGE %

KSE-100

Index

8,964

8,934

0.35%

Volume (mn sh)

446

352

26.70%

Investment (PkR mn)

47,624

28,043

69.82%

MAJOR STOCKS

BOP

98.80

97.00

1.86%

DGKC

104.50

102.90

1.55%

FFBL

37.40

35.50

5.35%

MCB

147.60

151.25

-2.41%

NBP

167.80

167.20

0.36%

OGDC

109.60

110.20

-0.54%

POL

399.50

404.90

-1.33%

PPL

206.05

209.00

-1.41%

PSO

413.00

414.80

-0.43%

PTCL

64.35

63.65

1.10%

Source: Alfalah Securities Research

ECON FOCUS

ASSET PRICES CONUNDRUM IRKS GREENSPAN, WILL BEN BERNANKE FOLLOW THE LEAD?

"History cautions that long periods of relative stability often engender unrealistic expectations of its permanence and, at times, may lead to financial excess and economic stress."

Thus spoke Alan Greenspan during one of his keynote addresses. Throwing caution to the wind amidst the rising house prices in the U.S has become the Fed's chairman most consistent theme in his past few addresses to the economic managers. He has been sounding alarm bells, in his quintessential unassuming manner, regarding an unusually long period of economic stability that might have encouraged investors to price the risk premium incorrectly and thus inflate the prices of assets, such as the real estate market.

"MY HOUSE IS MY CREDIT CARD"

The American consumers have gone on a spending spree fuelled by inflated housing prices and the state of rabid consumerism shows no signs of respite. The primary reason for the frenzy is the wealth effect which shields the consumers from any downside for instance the rising oil prices. This spending binge has led to large trade and current account deficits, leaving the American economy dependent on cheap imports from China.

All the fanfare has led Greenspan to believe that the property boom has created an imbalance and that prices of homes could fall.

WHO IS GOING TO TAME THE INFLATION HAWKS?

The Fed has allowed the interest rates to inch up for the last eight quarters with the fed rate reaching 4.0%. All this made sense two months ago at the back of strong economic growth data, surging energy prices and core inflation keen on raising its head.

Now with the energy prices falling, employment growth softening and the housing market beginning to look uncertain, the conditions look sufficient for the Fed to stop the tightening cycle.

But what looks problematic is the fact that the market is rife with rumors that the tightening cycle will not end till Greenspan is in charge, that means a possibility of a further 50 basis point. In addition to that the new Fed Chairman (Ben Bernanke in all probability) will have to prove his credentials as an inflation hawk. In other words the story does not end with Greenspan moving to other pastures.

MATTER OF WHEN AND NOT IF...

Talking of a definitive monetary policy stance, the SBP has not been all that clear as to where it sees the interest rates. The T-bill auctions in the last couple of months have not thrown any caution to the wind, leaving the pundits guessing as to what is in the offing.

All the economic data suggests that the rates should move up, on the contrary some quarters believe that they actually might come down in the next six months or so but for purely political reasons rather than economic ones. Yes! It's the pro-growth mantra at stake. But then who gives a hoot about what the economic fundamentals suggest.

MARKET THIS WEEK

ASMP: 4.03% WOW, KSE-100: 1.47% WOW:

The KSE-100, this week after a static last week, crossed the psychological barrier of 9000 this week, closing at 9064.39 this week, an increase of 1.47% from last week. The Alfalah Securities model portfolio, in turn rose by 4.03%, beating the market by 2.56%.

This good run of the portfolio is largely due to the upward drive of portfolio heavy weight, National Bank of Pakistan (NBP), which rose on a WoW basis by 8.9%. The upward drive by NBP this week, after a stagnant last week can be attributed largely to the privatization news of NIT, of which NBP has a fairly large holding. As NBP continues its upward speculative squeeze, we advise you to remain cautious as this scrip has been rising continuously session after session. The Banking sector still remains good, with rising interest rates and jump in consumer finance serving as a backbone.

The other large gainer this week was Maple Leaf Cement (MLCF), rising by 7.5%. The cement sector is still riding high on anticipated increase in demand as well as high earnings. Fauji Fertilizer (FFC) followed with an increase of 4.7%. Rising fertilizer demand and the jump in product prices are the main reasons for this positive performance.

The other portfolio scrips, Sui Southern Gas Company (SSGC) and Pakistan Oil Fields rose by 3.1% and 1.1% respectively, while Pak Suzuki Motor Company (PSMC) which has risen by 21% since inducted in the portfolio fell by 4.7%.

OUTLOOK: The banking and Cement sector still look good, but with the market at this high level, we advise caution.

Pakistan Economics Snapshot

WEEKLY

W-3

W-2

W-1

W

 

Forex Reserves (USD mn)

12,419

12,447

12,406

12,627

EXCH RATE:

Exch Rate: PkR/USD

59.70

59.78

59.760

60.760

PkR/Euro

72.98

72.47

73.39

72.34

MONTHLY

APR-05

MAY-05

JUN-05

JUL-05

INTEREST RATES

3m T-bill

7.2%

7.60%

7.48%

7.69%

6m T-bill

7.8%

7.95%

7.94%

7.97%

12m T-bill

8.3%

8.45%

8.40%

8.69%

INFLATION

CPI (YoY)

11.1%

9.8%

8.74%

8.99%

MONEY

Currency in Circulation (YoY)

15.1%

Na

Na

Na

Deposits (PkR bn)

2290

2320

2355

Na

(YoY)

20.49%

19.4%

18.2%

Na

Loans (PkR bn)

1720

1752

1759

Na

(YoY)

37.5%

36.7%

32.8%

Na

M2 (YoY)

14.1%

Na

Na

Na

EXTERNAL BALANCE

Exports (USD mn)

1301

1384

1541

1272

(YoY)

Na

Na

23.4%

-17.4%

Imports (USD mn)

1903

2033

2241

1996

YoY

Na

Na

20%

-10.9%

Trade Balance (USD mn)

-601.5

-648.7

-699.5

-724

YEARLY

2001

2002

2003

2004

2005

GDP (USD bn)

58.51

63.50

67.70

69.07

75.29

GDP growth

1.84%

3.10%

5.11%

6.40%

8.4%

Agricultural Growth

-2.2%

0.1%

4.1%

2.6%

7.6%

Services Growth

4.76%

5.30%

5.24%

5.49%

7.9%

Manufacturing Growth

9.3%

4.5%

6.9%

13.4%

12.5%

Population (mn)

143

146

148

149

152.5

GDP per capita (USD)

408.6

433.9

457.4

463.6

503

TRADE BALANCE

Imports (USD bn)

10.202

9.434

11.333

15.47

20.6

YoY

6.2%

-7.5%

20.1%

36.5%

32%

Exports (USD bn)

8.933

9.14

10.889

12.27

14.4

YoY

9.1%

2.3%

19.1%

12.7%

17.1%

Trade Balance (USD bn)

-1.269

-0.294

-0.444

-3.2

-6.2

Current Account (USD bn)

-0.513

1.33

3.16

1.73

-1.9

Remittances (USD mn)

1087

2389

4236.85

3800

4168

 
 

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