Blue-chips at Karachi Stock Exchange - by Noor-us-Sabbah
Update on KSE-100 Index
Karachi Stock Exchange has been under selling pressure for the past two weeks. Investors faced liquidity problems and tended to square their future contracts on equities. KSE-100 index closed at all time high level of 15,676 points on April 18, 2008. Since then, it has started shedding points and closed at 15,435 on April 25, 2008 and later 1st time sank below 15000 points since March 20, 2008 by closing at 14,956 on Friday, May 2, 2008. Most of the stocks including many blue-chips ended up in the red zone. Analysts explained that the market was in an overbought state after closing at all time high level on April 18. Already the outstanding amount to be settled was recorded to be Rs29.3 billion. So due to these two factors, the investors decided to square off their positions on available profit margin.
Blue chips trading at Karachi Stock Exchange
If we pick up blue-chips from the KSE 100-index, we hardly have a list of 15 stocks which qualify for this category. Following is the overview of a few companies, considered as blue-chip or reliable investment opportunity for those who are interested in investing their money in the Karachi Stock exchange. I’ll suggest them to add these stocks to their portfolio once the selling pressure on the market fades away.
1. MCB Bank
Ticker symbol: MCB Sector: Banking
Current Share Price: Rs 421.88
MCB is one of the most successful commercial bank in Pakistan. MCB was established in 1947, the year Pakistan came into being. The bank was initially managed by foreign executives, and later nationalized under the nationalization process of the entire banking sector. In 1991, MCB was again privatized in 1991. Its total assets are Rs.300 billion and the total deposits are around Rs. 280 billion. The bank has an extensive branch network and very stable deposit base (Rs. 208 billion). Another important factor behind its success is its remarkable risk management practices. MCB has effectively managed its non-performing loans (NPLs) through efficient risk management. MCB recorded capital gain of around 100% per share within a year.
2. Pakistan Oilfields Limited
Ticker symbol: OGDC Sector: Oil& Gas exploration
Current Share Price: Rs 414.2
Pakistan Oilfields Limited (POL) with the highest proven hydrocarbon reserves is a subsidiary of The Attock Oil Company Limited (AOC). AOC pioneered oil and gas exploration & production (E&P) in the region a century ago. POL was established on November 25, 1950. Since 1978, POL has been undertaking oil exploration and investing independently in different projects and joint ventures with other E&P companies for oil and gas exploration within and outside Pakistan. POL produces LPG, solvent oil and sulphur. LPG is marketed with the brand name of POLGAS. POL owns a subsidiary CAPGAS (Private) Limited, producing LPG. Moreover the company also holds 25 per cent shareholding in National Refinery Limited (NRL).
Although POL is highly volatile, a strong bullish trend is predicted for the company in the long-run.
3. D.G.Khan Cement Company Limited
Ticker symbol: DGKC Sector: Cement
Current Share Price: Rs 107.47
Pakistan. D.G. Khan Cement Company is owned by one of the most successful business groups of Pakistan, i.e. Nishat group of industries. D.G.Khan Cement Company is a part of a diversified business portfolio of Nishat group of companies including Cement Company, commercial bank, and textile companies. D.G. Khan Cement Company Limited was established in 1978 in Lahore, Pakistan. The company manufactures cement and also deal in its sale and marketing in Pakistan. Its important products are as follows:
1. DG cement ( also known as ordinary portland cement)
2. Elephant cement ( or highly Sulphate resistant cement)
Keeping high demand for cement within and outside the country, DGKC is a good stock to be added in the portfolio for the current year 2008.
4. Lucky Cement Company Limited
Ticker symbol: LUCK Sector: Cement
Current Share Price: Rs 138.85
Lucky Cement Limited manufactures and distributes cements in Pakistan, and exports it to the countries like India, Afghanistan and UAE. Lucky Cement has the biggest market share in the country. Its market its products for instance, ordinary portland cement, sulphate resistant cement, and slag cement under the brand names of Lucky Cement, Lucky Star Cement, Lucky Gold Cement, Chairman Cement, and Lucky Sulphate Resistant Cement. Lucky cement recently got the license to export cement to South Africa by the South African Authorities. Lucky Cement has also issued GDRs on London Stock Exchange recently.
LUCK has all good reasons to enjoy a bullish trend in the coming months due to the fact that it’s a market leader locally and the biggest and the most successful cement exporter in Pakistan.
5. Oil & Gas Development Company Limited
Ticker symbol: OGDC Sector: Oil & Gas exploration
Current Share Price: Rs 132.5
The Government of Pakistan established Oil and Gas Development Corporation (OGDC) in 1961 in order to take on the process of exploration and development of oil and gas resources within the country. In 1997, it was converted to a public limited company, renamed as Oil & Gas Development Company Limited. OGDCL is the largest company dealing in petroleum exploration and production in Pakistan, contributing more than 31% of gas and 65% of oil production in the country. It owns the largest exploration acreage of 25% in Pakistan and 29 oil producing plants.
OGDC, usually the market leader at KSE in term of volume, is one of the most reliable stocks available in Pakistan. With oil prices shooting up like anything, even a small discovery is enough to boost its share price.
6. Pakistan Telecommunication Company Limited
Ticker symbol: PTCL Sector: Telecommunication
Current Share Price: Rs 45.45
Pakistani Telecommunication Company Limited was established as Pakistan Telecommunication Corporation (PTC) in December 1990. The company enjoyed monopoly in the field of telecommunication and telecom development in Pakistan for almost a decade. It was privatized by the Pakistan Government in 1994. PTC was eventually transformed in to Pakistan Telecommunication Company Limited (PTCL) in 1996, and got listed on all three Stock Exchanges of Pakistan. In 2006, 1.326 billion shares of PTCL (26% shareholding) along with management control were sold out to the Etisalat International Pakistan in open bidding process. Etisalat Int is a wholly owned subsidiary of Emirates Telecommunications Corporation.
With lots of new products (including internet service) and attractive packages for the consumers, PTCL is all set to beat the competition offered by the cellular companies this year. PTCL is a real blue-chip at KSE.