Pakistan's Karachi Stock Exchange to Perform Well in 2011

[Mike2011]

You are escaping all the facts about per capita aid being given to you . Your denial may help you sleep better but others have eyes and brains to see and think .

Don't expose him with facts. Otherwise he will divert the thread with his favorite topic. TOILETS in India

 

[RiazHaq]

stock price of consumer giant ‘Nestle Pakistan’ had climbed by 228 per cent during the year, which made it the second largest share in KSE-100 basket. The stock is owned by only 760 investors, but it has contributed as much as 26 per cent to the index gain.

thats scary.... And also 2/3 of listed companies are military owned. No accountability.

It's not unusual for a few companies and sectors to account for most the index gain in any market, including major markets in the developed world.

Last year, the highest performing sectors were food and beverage (65%), oil and gas (40%), chemicals (30%) and personal goods(20%). These were followed by smaller gains in electricity, fixed-line telecom, automobiles, and construction materials, according to JS Global research. Oil and gas shares now make up 36% of KSE's total marke cap, a major shift from 2007 when financial services made up 31% of the Karachi Stock Exchange market cap of about $40 billion.

Haq's Musings: Will Karachi Stock Index Continue its Advance in 2011?

As to military owning 2/3rds of listed companies, it's just a lie.

The bottom line is that investors have made a lot higher returns at Karachi than all of the BRICS put together over a ten year period.

 

[Mike2011]

It's not unusual for a few companies and sectors to account for most the index gain in any market, including major markets in the developed world.

Last year, the highest performing sectors were food and beverage (65%), oil and gas (40%), chemicals (30%) and personal goods(20%). These were followed by smaller gains in electricity, fixed-line telecom, automobiles, and construction materials, according to JS Global research. Oil and gas shares now make up 36% of KSE's total marke cap, a major shift from 2007 when financial services made up 31% of the Karachi Stock Exchange market cap of about $40 billion.

Haq's Musings: Will Karachi Stock Index Continue its Advance in 2011?

As to military owning 3/3rds of listed companies, it's just a lie.

The bottom line is that investors have made a lot higher returns at Karachi than all of the BRICS put together over a ten year period.

What about this
Second largest share in KSE 100 and owned by only 760 investors...

Pakistan rupee devalued more than 100% in last 10yrs. Whoever invested would have lost not only shirt but underwear also.

 

[AmberDutt]

It's not unusual for a few companies and sectors to account for most the index gain in any market, including major markets in the developed world.

Last year, the highest performing sectors were food and beverage (65%), oil and gas (40%), chemicals (30%) and personal goods(20%). These were followed by smaller gains in electricity, fixed-line telecom, automobiles, and construction materials, according to JS Global research. Oil and gas shares now make up 36% of KSE's total marke cap, a major shift from 2007 when financial services made up 31% of the Karachi Stock Exchange market cap of about $40 billion.

Haq's Musings: Will Karachi Stock Index Continue its Advance in 2011?

As to military owning 2/3rds of listed companies, it's just a lie.

The bottom line is that investors have made a lot higher returns at Karachi than all of the BRICS put together over a ten year period.

Companies which have just 760 stockholders but contribute 26% to the index are nothing but a recipe for disaster since they post a wrong picture of the index

 

[AmberDutt]

And guys.. Now wait for it.. The topic to discussion is gonna go on tangent now...

 

[RiazHaq]

Companies which have just 760 stockholders but contribute 26% to the index are nothing but a recipe for disaster since they post a wrong picture of the index

Nonsense! Buffet's Berkshire Hathaway has relatively few shareholders but it has huge impact on US markets.

The float on many high cap US companies is very small.

 

[RiazHaq]

What about this
Second largest share in KSE 100 and owned by only 760 investors...

Pakistan rupee devalued more than 100% in last 10yrs. Whoever invested would have lost not only shirt but underwear also.

More BS won't help you!

Dollar went from about Rs 55 to Rs 85 in 10 years....not even close to the 100% you claim!

And the KSE-100 returns are high regardless of PKR or USD basis.

For example, Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms, in a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. This is the kind of performance that has got the attention of some of the top investors and investment firms around the world.

Haq's Musings: Karachi Tops Mumbai in Stock Performance

And in 2010, PKR was very stable relative to USD. Pakistan's main stock market ended 2010 with a 28 percent annual gain, driven by foreign buying mainly in the energy sector, despite concerns about the country's macroeconomic indicators after summer floods, according to Reuters. Although it was less than half of the 63% gain recorded in 2009, it is still an impressive rise in KSE-100 index when compared favorably with the performance of Mumbai(+17%) and Shanghai(-14.3%) key indexes.

South Asia Investor Review: Karachi Stock Index Beat BRICs in 2010

 

[Mike2011]

Nonsense! Buffet's Berkshire Hathaway has relatively few shareholders but it has huge impact on US markets.

The float on many high cap US companies is very small.

Which USA company has 26% of nyse and 760 investor. and 223% return.

 

[AmberDutt]

Nonsense! Buffet's Berkshire Hathaway has relatively few shareholders but it has huge impact on US markets.

The float on many high cap US companies is very small.

Do you have data on this buddy.. Last I saw, Hathway had in excess of half a million shareholders..

 

[RiazHaq]

Do you have data on this buddy.. Last I saw, Hathway had in excess of half a million shareholders..

Half a million shareholders is small for a company with a market cap $188 billion, about the size of Pakistan's GDP.

 

[AmberDutt]

Half a million shareholders is small for a company with a market cap $188 billion, about the size of Pakistan's GDP.

stil large enough to be liquid.unlike 746 shareholders.. but then we are nitpicking .. the issue is the continuous decline of liquidity of karachi exchange and any technical analyst will tell you what that means

 

[Mike2011]

AmberDutt , I want to know what is daily volume of that stock with 760 investors.

 

[AmberDutt]

AmberDutt , I want to know what is daily volume of that stock with 760 investors.

Riaz should be able to provide those numbers since i do not deal in Pakistani stocks much, but here is a news article talking about what I was trying to say

Heavy lifter: Nestle contributes 26% to total KSE-100 gain – The Express Tribune


Consumer giant Nestle Pakistan, which is owned by a select group of investors, contributed 26 per cent to the total gain of the benchmark KSE-100 share index in the outgoing fiscal year.

The benchmark KSE-100 Index gained 28.5 per cent including dividends as the overall capital market environment was depressed.

In spite of this news, there must be only a few investors who have made money on this as volumes declined by 40 per cent to nine-year low in fiscal 2011 and the gains were led by illiquid stocks like Nestle and Unilever, said Topline Securities CEO Mohammad Sohail in a research note.
An illiquid stock is a scrip that does not trade actively, making it hard to sell for cash.

Nestle’s stock price jumped 228 per cent to Rs5,475.1 in fiscal 2011 alone.

Foreign fund managers have accumulated large chunk of the free float, hence shooting the price as the supply is less now, said Sohail.
Second largest stock now Surprisingly, Nestle has the second largest share in the KSE-100 basket after Oil and Gas Development Company. “Unfortunately, its not traditionally a stock traded by small investors and no brokerage firm covers this stock,” adds the note.

Interestingly, in terms of volumes Nestle is not even among the top 50 stocks.

Aggressive buying by few foreign funds ballooned the stock price by 67 per cent in last 18 trading sessions and 228 per cent in fiscal 2011. The inflated stock price has increased Nestle’s weight to 8.2 per cent from 3.2 per cent a year back in the KSE-100 companies’ basket.

Index gained only 21 per cent excluding Nestle
The Index gained only 21 per cent without Nestle, and for a common investor this is the gain, says the note.
This should be classified as normal return which is in line with the previous 20-year average annual return of 20 per cent, says the note.
Published in The Express Tribune, July 1st, 2011.

 

[Mike2011]

Only 21% up, excluding Nestle?

Well the 21% still beats the performance of Mumbai(+17%) and Shanghai(-14.3%) key indexes. Among other BRICs, Brazil is up just 1% for the year, and the dollar-traded Russian RTS index rose 22% in the year, reaching a 16-month closing high of 1,769.57 on Tuesday, while the rouble-based MICEX is also up 22%.

just 760 investor on a company which is part of KSE 100 and constitute 26%........
I see manipulation.....Anyone see's the figure will run away.

 

[Mike2011]

Clearly, FDI is preferable to FII.

The problem in India last year was that FDI dropped precipitously two years in a row, and FII shot up by 66%....and two-thirds of India's reserves are made up of FII during the last two years.

But this FII is now dropping and it poses a problem of how India is going to fund its huge current account deficit.

In 2010-11, inbound FDI into India fell by as much as 28%, the second consecutive year of decline and the first such large decline since the opening up of the economy in 1991-92. As a result of this decline, the present level of $27 billion of FDI inflows is the lowest in four years.

A large part of the progress made in FDI inflows over the boom years has now been reversed, with flows down by almost 29% from their high in 2007-08. This trend, more than just being odd, is also worrying when seen in the context of the fact that the past four years cover the recessionary period as well.
----

The Reserve Bank of India (RBI) has been flagging the fall in FDI as a serious issue in a situation of rising current account deficits (the country’s net foreign exchange earnings from trade and services) and sees policy changes as the only way out of the current situation, though this view is divided.

Hot money is flowing, but rest of India story has gone cold | Firstpost

BTW AmberDutt is banned. What is percent of pakistani invest in KSE. looking at only 760 investor for 26% KSE company, I think it will be 5000 investors out of 180 millions.
Looks like almost no domestic investors, once whatever FII goes out from pakistan, market will have no support and fall like house of cards.