On Tuesday, 3rd Dec, 2013. The market witnessed another bullish day, which accumulatedly post gains of approx. +800 points rally. Market, no doubt is now on (P/E 9x, which is still below as compare to world average of 13x,), but as the Internal and External strength of Pakistan economy is not as sustainable, this comparison with world turned to be volatile. In fact, on Monday, Robert Shiller (noble award winner in stock market research) warns the US economy is on a verge of Real Estate and Stock price bubble.
Market, just after getting maximum level of +217 points, had later on closed at 24,588 (+187) points, with average volume of 185 million shares.
IMPORTANT NEWS and their IMPACTS ::::::
- The Privatisation Commission on Monday said that one financial advisor has been hired and two more would be hired before end-March 2014 to undertake the privatisation of 31 identified entities (Public Sector Enterprises). (Economy – Positive, as these industries are still underperforming during government ownership. None of the government tenure to be blamed solely. Now better to hand it over some private entity.)
- International Finance Corporation (IFC) here on Monday agreed to assist the Ministry of Finance in issuing Global Rupee Bond and Euro Dollar Bond. (Economy – Neutral till any specific schedule shall be announced.)
- Chairman All Pakistan Textile Mills Association (APTMA) Punjab S M Tanveer led a 20-member delegation to the Chief Minister Punjab Shahbaz Sharif and Federal Minster for Petroleum and Natural Resources Shahid Khaqan Abbasi on Monday. The Chief Minister and Federal Minister for Petroleum and Natural Resources extended a patient hearing to the problems of textile industry in Punjab. The Chief Minister Punjab graciously supported the Punjab based textile industry before the Federal Minister who reciprocated positively assured of providing gas supply to textile industry despite constraints on availability during winter. (Economy, Textile – Neutral, as supply of gas is a biggest issue, especially in winter.)
- Rates of cotton stabilised on the local market on Monday in process of modest trading, dealers said. The official spot rate remained unchanged at Rs 6,400, they added. (Textile – Neutral.)
- The government on Tuesday approved Pakistan International Airlines request to acquire five aircraft of European make on lease, aimed at cutting the financial losses of the state-run entity whose accumulative losses increased to Rs267.8 billion till September this year. (Company News, PIA – Neutral, as company is in huge loss, and it takes time to come out from losses and then recover these lease amount.)
- The price of oil rose more than 1 percent Monday on encouraging manufacturing data from the U.S. and China. Oil prices in Pakistan (PMEX), has been trading at $95.86 ($+1.94) per barrel till last update. (Crude Oil – Neutral)
- Pakistan’s main stock exchange closed higher on Tuesday, with the benchmark 100 share index of the Karachi Stock Exchange rising 0.77 per cent, or 186.90 points, to 24,588.47. The rupee ended weaker at 108.57/108.63 against the dollar, compared with Monday’s close of 108.48/108.54. (Economy – Pressure.)
FORECAST FOR TODAY and COMING WEEK:::::
TODAY, on 4th Dec. Market is now moving towards its all time highest levels, and making new records in last 4 days.
Market, has still some blue chip companies, which are still lot to deliver to its stake holders, but the Rupee depreciation, variation in oil price, Interest rates, turned the market under extreme pressure, unless getting correction of -475 to -590 in coming days.
As per my analysis, market initially to get some slightly positive movement, but will get some selling later on. The market is expected to be on mixed or negative trend and move between -285 points to +70 points.
BYCO, NCL, PPL, DOL, FFBL, FFC, LOTCHEM, AHCL, KESC etc. (long term hold, at least till Feb 2014).
DFSM, NIB, KOIL, JPGL, etc (some rally expected in upcoming weeks. These all are solely my predictions, so consider your dealers too.)