AUTOMOBILE SECTOR AT KSE

S.M. ABBAS ZAIDI,
Research Analyst
, PAGE
July 14 - 20, 2008

Automobile sector is one of the worst hit sectors in Karachi stock exchange. The listed automobiles companies lost almost double of prices of share. The worst hit company is pak Suzuki which has so far lost almost 200% in both stock prices as well as market capitalization. Indus Motors, Honda Atlas, Ghandhara Nissan, Dewan Farooque and other automobile companies are also severely affected because of political instability, poor economic situation, high inflation, depreciation of Pak rupees, less facility of banks in terms of car financing along with high interest rates are the main factors behind these crisis.

COMPANIES

KSE 100 INDEX

% CHANGE

JAN-08

JULY-08

Indus Motor

319.20

196.07

-62.8

Pat Suzuki Motor

329.65

116.25

-183.56

Honda Atlas Cars

54.10

36.17

-50.00

Dewan Farooque

13.00

6.84

-90.00

Ghandhara Nissan

47.50

23.81

-100

The chart shows that Indus motor started the year with an open rate of 319.20 but decreased by 62.8% at 196.07 in July 2008. Pak Suzuki is the worst hit company which started with an open rate of 329.65 and decreased to 183.56% to 116.25 in month of July 2008. Atlas Honda car started the rate with 54.10 and in July its recorded rate is 36.17, the rate of this company is decreased by 50.00% during these sixth months. The Dewan Farooque motor's rate decreased by 90% and in Jan 08 it was recorded at 13 and now in July, it is recorded 6.84. In Jan 2008 Ghandhara Nissan's rate was recorded 47.50 and recently the company rate is recorded 23.81 as it has declined by 100%.

INDUS MOTOR

INDUS MOTOR

MONTHS

OPENING AND CLOSING RATE

MARKET CAPITALIZATION

1-Jan

319.20

23,835,450,000

31-Jan

291.00

22,471,740,000

1-Feb

285.90

21,941,190,000

29-Feb

302.00

23,580,000,000

3-Mar

300.00

23,580,000,000

31-Mar

286.00

22,401,000,000

1-Apr

285.00

22,558,200,000

30-Apr

352.50

26,323,140,000

2-May

334.90

25,938,000,000

30-May

252.70

18,869,502,000

2-Jun

240.07

18,864,000,000

30-Jun

200.05

15,723,930,000

1-Jul

200.05

15,566,730,000

7-Jul

196.07

15,411,102,000

The Performance of Indus Motor is badly affected in this year. Indus motor lost 62.8% in stock rates and 54.7% of market capitalization during this year. There was a consistent decline except Feb and April but the major decline came in the last two months. During the month of Jan-08 Indus motor's stock rates went down 9.7% to close at 291.00 and market capitalization also decreased by 6%. In Feb there was an increase of 5.3% as the points increased from 285.9 to 302.00 and market capitalization increased by 7%. In March the points decreased by 5% to close at 286.00, the market capitalization of this month also decreased by 5.26%. In April the stock points increased from 285.00 to 352.50 by 19% and the market capitalization increased by 14.3%. The month of May was a disaster as Indus Motor lost 82 points to close at 252.70 and the market capitalization also decreased by 37.5%. In Jun Indus motor lost 40 more points to close the month at 200.05, the market capitalization was also declined by 20%.

PAK SUZUKI MOTOR

PAK SUZUKI MOTOR

MONTHS

OPENING AND CLOSING RATE

MARKET CAPITALIZATION

1-Jan

329.65

26,056,148,340

31-Jan

282.00

23,093,351,940

1-Feb

280.60

22,817,647,275

29-Feb

279.00

22,797,072,300

3-Mar

277.00

22,381,457,805

31-Mar

258.00

20,986,474,500

1-Apr

255.00

20,904,174,600

30-Apr

221.12

17,858,255,301

2-May

216.99

18,027,793,095

30-May

162.06

12,834,669,405

2-Jun

155.95

12,838,784,400

30-Jun

121.00

9,858,705,021

1-Jul

119.79

9,760,768,140

7-Jul

116.25

9,567,363,375

The Pak Suzuki Motor is one of the worst hit companies in the Karachi stock exchange. Pak Suzuki motor has so far lost 183.5% in stock price and 167% in market capitalization. During the month of Jan-08 Pak Suzuki motor's stock rates went down 17% to close at 282.00 and market capitalization also decreased by 13%. In Feb there was a decrease of 0.6% and market capitalization decreased slightly. In March the points decreased by 7.36% to close at 258.00, the market capitalization of this month also decreased by 6.64%. In April the stock rates decreased from 255.00 to 221.12 by 15.3% and the market capitalization decreased by 17%. The month of May was the worst hit as it lost 55 points to close at 162.06 and by 34%, the market capitalization also decreased by 40.46%. Pak Suzuki lost 35 more points to close the month at 121.00 and by 29%, the market capitalization was also declined by 30%.

CONCLUSION

The Automobile industry without any doubt has been the worst affected sector. According to All Pakistan Automobile Association (APAMA) the sales of Cars has gone down to more than 8% in the current financial year. The main reason has been the rising inflation due to which the demand of cars have gone down, the other reasons include devaluation of Pak Rupees and uncertain political and economic environment. The Automobile industry without doubt has been the most affected sector in Karachi Stock Exchange.