PERFORMANCE OF MAJOR BANKS IN KSE

S.KAMAL HAYDER KAMI.
Research Analyst
, PAGE
July 14 - 20, 2008

The year 2008 was a difficult year for Karachi stock exchange. The year started with political instability as a sequal to the tragic death of Benazir Bhutto the co-chairperson of PPP. Besides the political chaos the global shocks like high oil and food prices also severally affecedt the bourses. The banking sector that was performing extremely well also affected due to bad conditions. However, the performance of major banks bounced back during general elections, as everyone was expecting political stability as a result of new democratic government as a result of the election. In the first four months the rates and market capitalization looked consistent. But in May the performance of major banks collapsed because of uncertain environment, political instability and high inflation due to which the foreign investment saw a sharp decline, which had a major effect on the performance of the banks.

MAJOR BANKS

KSE 100 INDEX

% CHANGE

JAN-08

JULY-08

NBP

232.15

143.13

-62.15

HBL

239.9

202.45

-18.5

MCB

399.95

313.54

-27.5

ST. CHART BANK

48.00

22.65

-112

ABL

130.15

83.58

-55.72

UBL

172.9

81.75

-111.6

The above chart shows that national bank of Pakistan (NBP) started the year with an open rate of 232.15 but decreased by 62.15% to 143.13 in July 2008. Similarly the Habib Bank Limited (HBL) started with open rate of 239.9 and also decreased to 18.5% to 202.45 in month of July 2008. MCB starting rate was 399.95 and in July it was recorded at 313.54, the rate of this bank is decreased by 27.5% during these sixth months. The standard chartered bank rate decreased by 112% and in Jan 08 it was recorded at 48 and now in July, it is recorded 22.65. In Jan 2008 Allied Bank Limited rate was recorded 130.15 and recently the bank rate was recorded 83.58 and it has declined by 55.72%. The united bank rate is also decreased by 111.6% from 172.9 to 81.75 during six months of 2008.

NATIONAL BANK OF PAKISTAN

NATIONAL BANK OF PAKISTAN

MONTHS

RATE DURING 2008

MARKET CAP

1-Jan

232.15

180,291,993,090

31-Jan

225.80

184,858,411,730

1-Feb

226.70

184,573,010,565

29-Feb

272.90

216,537,941,045

3-Mar

265.55

214,458,589,700

31-Mar

235.90

189,995,632,700

1-Apr

233.00

210,295,812,195

30-Apr

229.90

201,864,246,255

2-May

225.05

199,576,959,750

30-May

153.21

141,632,368,290

2-Jun

157.90

148,709,501,829

30-Jun

148.98

132,303,827,250

1-Jul

147.50

130,985,273,853

7-Jul

143.13

127,101,371,670

The overall Performance of National bank was badly affected in the month of May. In the first two months, there was an increase in stock rates and market capitalization and it also remained consistent in the next two months as well. But in the month of May the Karachi stock exchange went down sharply as it started from the month above 14,000 but at the end of the month it settled at just above 12,000 which had a strong affect on national bank's performance in stock exchange. During the month of Jan-08 NBP's stock rates went down 2.81% to close at 225.80. However, there was an increase in market capitalization by 2.5%. In Feb there was an increase of 17.2% and the rates increased from 226.7 to 272.90 and market capitalization increased by 14.76%. In March the rates decreased by 12.5% to close at 235.9, the market capitalization of this month also decreased by almost 13%. In April the stock rates slightly decreased from 233.00 to 229.90 by 1.34% and the market capitalization decreased by 4.2%. The month of May was a disaster as it lost 72 points to close at 153.21 and the market capitalization also decreased by 41% due to collapse of stock exchange and the investors didn't invest in stock exchange. In Jun NBP lost six more rates to close the month at 148.98, the market capitalization was also declined to 12.4%.

HABIB BANK LIMITED

HABIB BANK LIMITED

MONTHS

RATE DURING 2008

MARKET CAP

1-Jan

239.90

157,285,500,000

31-Jan

254.30

174,915,000,000

1-Feb

253.50

174,915,000,000

29-Feb

304.85

218,316,000,000

3-Mar

316.40

213,900,000,000

31-Mar

277.25

189,750,000,000

1-Apr

275.00

210,432,750,000

30-Apr

271.00

204,175,000,000

2-May

269.00

197,332,410,000

30-May

200.00

151,716,510,000

2-Jun

199.89

153,310,410,000

30-Jun

210.73

158,350,170,000

1-Jul

208.63

156,771,450,000

7-Jul

202.45

153,659,550,000

Habib Bank Limited was the best among the worst during the year 2008. However, there rates also declined during sixth months. In the first two months there was an increase in stock points and market capitalization as it also remained consistent in the next two months as well. But in the month of May the Karachi stock exchange went down sharply as it started from the month just under 15,000 but at the end of the month it settled at just above 12,000 which had an affect on Habib bank performance in stock exchange. During the month of Jan HBL's stock rates increased by 5.7% to close at 254.3. There was also an increase in market capitalization by 10%. In Feb there was an increase of 17% and the rates increased from 253.5 to 304.84 and market capitalization increased by 20%. In March the rates decreased by 14% to close at 277.25, the market capitalization of this month also decreased by almost 13%. In April the stock rates decreased from 275.00 to 271.00 by 1.5% and the market capitalization decreased by 3%. The month of May was very poor as HBL lost 69 rates to close at 200.00 and the market capitalization also decreased by 30% due to collapse of stock exchange and investment was very less in stock exchange. However, in Jun HBL recovered 5% to close the month at 210.73. The market capitalization was also increased by 3.2%. Today HBL is just above 200.

CONCLUSION

The overall performance of Banks in KSE has been very poor. Pak Rupee has consistently devalued itself because of uncertain political environment; most of the foreign investors have also taken their money out of the country which has resulted in the bad performance of Banks in the Karachi Stock Exchange.