Saturday, June 16, 2012

Investors taking a cautious approach amid domestic & foreign uncertainty


 
June 15, 2012 (JS Research)
 
The week started off with extremely dull investor sentiment amid the turbulence in domestic political environment and US-Pak relationship. However, the approval of Finance Bill by National Assembly cleared ambiguities pertaining to the revised CGT regime and helped in regaining investor interest. Other major highlights during the week included: 1) cement offtake for May rising by 5%YoY, 2) Punjab govt. announcing to continue with the Yellow Cab and Green Tractor scheme for FY13 and 3) notification of HUBC’s revised Narowal tariff. Consequently, the KSE-100 index closed at 13,666, up 0.8%WoW with average daily volumes of 86mn shares, down 9.3%WoW. Foreigners were net sellers of US$13.5mn.
 
Cement sales of 2.9mn tons in May
Cement sales in 11MFY12 stood at 29.5mn tons, up by 3%YoY. The growth was largely driven by improved local sales, up 8%YoY. In May alone, cement sales were recorded at 2.9mn tons (up 5%YoY) in which local dispatches surged by 10%YoY while exports were down 6%YoY. However, during the week construction and material sector underperformed the market by 1.3%.
 
Cab and tractor scheme to continue
Punjab govt. in its provincial budget has announced to continue with the Yellow Cab and Green Tractor schemes for FY13. PSMC, the major beneficiary of the Yellow Cab scheme outperformed the market by 4.6%.
 
HUBC: Post COD Narowal tariff notified
HUBC remained in the limelight because of the NEPRA’s notification regarding the post Commercial Operation Date (COD) Narowal tariff. It is expected to positively impact the earnings of the company. During the week, HUBC outperformed the market by 3.6%.

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