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Fundamentals
based market review
By
Asfa Naz
The KSE100
index gained 2.74 per cent last week, settling at 10425 points that was
higher by 3.83 per cent on cumulative basis in January so far. As shown in
Table-1, except for POL, all top heavyweights of KSE100 basket gained
handsome values, with 7 of them beating the index. For the two weeks of
January, 5 of the index heavy weights have beaten the KSE100 index
movement. OGDCL and PPL would have added more values to any portfolio
containing these two, if the international crude prices had not continued
falling. FFC’s recovery last week shows how naÔve were the people who
sold this share down to about Rs104 that is so unjust. The month of
January was, till end of last week, very good for both NBP and MCB, but
once again both banks are coming close to their fair values.
After gaining a handsome
16.1 per cent during December, Nestle seems to be settling down to its
fair value once again. (see table-1)
Coming to the top
gainers within the KSE100 basket, shown in Table 2, the presence of Dewan
Salman right at the top and Pak PTA at number 3 spot, does not impress us,
but for Attock Cement at number 2, yes. Attock Cement is often an
underperformer for some odd reason. This company declared an EPS of Rs4.41
for the first quarter of FY07 (September closing), but its December
closing quarter results might come down to Rs3.50, but for the whole year
FY07, we expect this company to earn over Rs13 and at the last Friday’s
closing price of Rs77.5, the share looks attractive even at its own
typical PE ratio that is usually far less than that of DGK, LUCK, etc. It
has been mentioned in this column before that each major share has its own
typical PE multiples and in some cases these are not comparable with
sector peers.
Attock Cement has gained
17.62 per cent in the last 2 weeks, and it seems that finally the market
is coming to terms with the value in this share.
Like DSFL and PPTA,
there are other shares also in Table-2, which are highly speculative in
nature, like Soneri, PIA, PNSC, Kohinoor Mills, etc. For the half year
ending in June 2006, Rafhan Maize announced an EPS of Rs42.05 that was
14.05 per cent higher on year over year basis, but for the first nine
months (till September 2006), the company’s EPS was Rs63.98, 25 per cent
higher year on year. For the whole year FY06, ending in December 2006, the
company’s EPS is likely to be in excess of Rs85, and at last Friday’s
closing price of Rs992, the share is about 11.6, which is not bad at all
for value buying at this time of the year (see table-2).
Table-3 is about the top
losers in the KSE100 basket. For Abbot Lab, the month of December 2006 was
good as the share rose over 7 per cent but the market seems to be
adjusting that gain in January, especially last week, as shown in the
Table. The presence of once great-going Honda Atlas Cars in this Table is
an ugly sight, but the market is factoring in the price the auto sales
numbers of December that were announced late last week (see table-3).
Coming to major
sectors’ performances in the KSE100 basket, on aggregate basis, banks
with 16 representations in the index gained 4.02 per cent last week,
taking their total January rise to 7.65 per cent. The best performing
banks were (in this order) NBP, Soneri and Askari Banks. Small wonder,
considering the annual results’ announcements. The 10 cement sector
companies gained 3.9 per cent last week, more than reversing the fall in
the first January week. The best performance came from Attock, Cherat, DGK
and Lucky Cement, in this order. Regular readers of this column will
recall that we mentioned a few weeks ago that Cement sector has lost most
that it could possibly.
TABLE-1: KSE100 INDEX
TOP HEAVY WEIGHTS
Rank
Company
Per cent rise Per cent rise
last week in January so far
1
OGDC
2.92
1.57
2
National Bank
10.25
16.28
3
P.T.C.L.A
3.33
8.47
4
Pak Petroleum
3.59
4.48
5
MCB Bank 2.00
7.88
6
United Bank Ltd.
0.93 2.35
7
Pak Oilfields
-1.12
-2.53
8
Fauji Fertilizer
3.06
2.04
9
P.S.O.
3.07
4.42
10
Nestle Pakistan
1.35
0.48
KSE100
2.74
3.83
TABLE-2: KSE100 BASKET
TOP VALUE GAINERS
Rank
Company
Per cent rise Per cent rise
last week in January so far
1
Dewan Salman
14.47
13.73
2
Attock Cement
12.60
17.62
3
Pak.PTA Ltd. 12.37
11.22
4
National Bank
10.25
16.28
5
Rafhan Maize 10.25
10.25
6
Kohinoor Mills 9.98
9.98
7
P.N.S.C.
7.53
4.69
8
P.I.A.C.(A) 7.33
14.18
9
Soneri Bank 7.01
5.77
10
Dawood Hercules
6.65
1.32
TABLE-3: KSE100 BASKET
TOP VALUE LOSERS
Rank
Company
Per cent rise Per cent rise
last week in January so far
1
Bata (Pak) -7.92
-11.33
2
New Jub. Insurance
-4.65
-4.55
3
Prime Bank -3.75
2.99
4
Packages Ltd. -2.86
-2.86
5
J.D.W.Sugar -2.81
-6.15
6
Gatron Ind. -2.63
-2.63
7
Abbott (Lab) -2.52
-0.23
8
Ibrahim Fibres -2.27
-2.27
9
EFU General Insurance
-2.18
0.90
10
Honda Atlas Cars
-2.15
-4.22
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