Thursday, June 19, 2008
Sunday, November 4, 2007
I would like to suggest that to close the Karachi Stock Exchange for a week till the political crises calms down, so to minimize the loss of Individual & Small Investors. The investors should wait until the International community again supports Musharraf's regime and continuous there trade & investment in Pakistan.
On the other hand U.S. fears hit world markets & markets in Asia and Europe slump Friday, tracking losses on Wall Street overnight as investors worry about a possible end to U.S. interest rate cuts and a slowing American economy. Oil prices reached a new record high of $96.24 a barrel in electronic trading earlier Thursday. But light, sweet crude for December settled 42 cents lower to $93.07 a barrel in afternoon trade on the New York Mercantile Exchange.
Citi shares tumbled after analysts downgraded the company's stock and added that Citigroup may have to cut its dividend in order to raise $30 billion in capital. News of the downgrade hit Citi stock and sparked fears that other major financial players were harder hit by this summer's subprime crisis than originally anticipated. Some investors worry that because the value of many of these mortgage-backed securities has not been determined, firms like Citi may have to take additional losses.
|DOW JONES INDUS. AVG||13,595.10||27.23||0.20%|
|S&P 500 INDEX||1,509.65||1.21||0.08%|
|NASDAQ COMPOSITE INDEX||2,810.38||15.55||0.56%|
|FTSE 100 INDEX||6,530.60||55.50||-0.84%|
|CAC 40 INDEX||5,720.42||10.50||-0.18%|
|HANG SENG INDEX||30,468.34||1,024.54||-3.25%|
|BSE SENSEX 30 INDEX||19,976.23||251.88||1.28%|
|GOLD 100 OZ FUT (USD/t oz.)||808.500||14.800||1.86%|
|SILVER FUTURE (USD/t oz.)||14.599||0.274||1.91%|
|U.S. DOLLAR vs EURO||1.4498||0.0092||0.64%|
|NYMEX CRUDE FUTURE||95.93||2.44||2.61%|
Thursday, November 1, 2007
The KSE-100 index that made its life high at 14,908.91 points on Oct 22nd has come down 6.549 percent since then as bears finally came out of hibernation and took charge from bulls. Investors should wait but not waste the upcoming buying opportunity mostly in oil & petroleum sector.
Recommendation: Precautious buying.
International markets are up surging on record highs & Nymex crude oil touched $96/barrel during intraday trading & closed at $95.49 up $0.96 cents on 31 Oct 07. The up surge was mainly due to failing U.S crude oil inventories with indication of crude oil crossing $100/ barrel pretty soon. The Federal Reserve's move to cut interest rates by a quarter points to 4.5 % also supported prices.
Bombay Sensex also couldn’t sustain intraday high of almost 20,200 points and index failed to register 20000 and closed at 19,724.35 below 113.64 points.
Monday, August 27, 2007
The demutualization draft as well as sell of 10% stack of Karachi Stock Exchange to foreign stock exchange and to make them become an active partner and play an active role in management is under review. The KSE board, in its meeting held on Friday 24th Aug 07 under Chairman Shaukat Tarin, recommended the name of Adnan Afridi to the Securities and Exchange Commission of Pakistan (SECP) for its approval.
The market seems to be very volatile in the coming week and I would recommend to start investing in valuation stock and build positions little by little and wait for market rebound (mainly after elections).
Sell on Strength: PSO, PICIC,
Buy on Weakness: PTC, OGDC, IGIIL, UBL, PPL, HUBCO, PGF, PIF
The collapse in securities backed by subprime mortgages has caused losses at lenders around the world, helping send Asian banking stocks lower in the past month. Industrial & Commercial Bank of China Ltd., the world's largest bank by market value, said yesterday it had $1.2 billion of subprime-related securities.
Defaults on home loans to people with poor credit have prompted a sell-off of debt-backed securities that spread to wider credit markets and wiped more than $5.5 trillion off the value of equities worldwide.
Losses related to subprime loans damped enthusiasm for Bank of China even after it reported a 51 percent increase in first- half profit. The shares have fallen 10 percent in Hong Kong this year, the fourth-worst performance among companies on the benchmark Hang Seng index.
World Indices closing on Friday 24th Aug 07
Thursday, August 9, 2007
- KSE 100 Index stood at 13181.94 down by -382.48 points.
- KSE 30 Index stood at 15848.71 down by -432.60 points.
- Market Capitalization fall by Rs. 98.275 billion.
- BSE Sensex closed at 15100.15 down by -207.83 points
- FTSE 100 Index stood at 6271.20 down by -122.70 points
- DJIA stood at 13270.68 down by -387.18 points
- NASDAQ stood at 2556.49 down by -56.49 points
- S & P 500 stood at 1453.09 down by -44.40
- NIKKEI stood at 17170.60 up by +141.32
If you have already taken position,
- you should wait or try to average your positions.
- you should sell out positions as prices go up and regain your positions as market further corrects itself.
Recommendations: for coming week
Sell on Strength: PSO, PPL, POL, APL, , OGDC, MCB, NBP, ABL
Buy on Weakness: LUCK, PTC, UBL, IGIIL, NRL
Major central banks stepped in to calm the financial markets as banks scrambled for cash, with the European Central Bank injecting a record amount of liquidity to prevent the financial system from seizing up. The ECB pumped 94.8 billion euros ($130 billion) of emergency liquidity into Europe's money markets, while the Bank of Canada said it injected C$1.455 billion ($1.37 billion) into the markets to help with liquidity shortfalls. The U.S. Treasury said it was monitoring financial markets and remains vigilant.
Friday, August 3, 2007
Benefits of Studying Finance:
- To manage your personal resources.
- To deal with the world of business.
- To pursue interesting & rewarding career opportunities.
- To make informed public choices as a citizen (how financial system works)
- To expand your mind (how the real world works)
- Consumption & Saving decisions
- Investing decisions
- Financing decisions
- Risk-Management decisions (how to reduce financial uncertainties)
- Capital Budgeting (deciding on acquiring long lived assets to operate business function)
- Capital Structure (feasible financing plan for the firm)
- Working Capital management (managing firms operating cash flows)
| || |
Money Market: Money market instruments are mostly interest earning securities issued by Government (T-bills, Repo) & large Corporations
Capital Market: In capital markets the total capital (bond & equity) are sold & purchased
Types: a) Stock Market ...b) Bond Market
Derivatives: Derivatives are financial instruments that drive their value from the prices of one or more other assets such as quity securities, foreign currencies or commodities. Their function is to serve as tools for managing exposures to the risk associated with the underlying assets.
Types: a) Forward Contracts ...b) Futures ...c) Options
Rate of Return in Other Currency:
£ 109 x ¥140 - ¥15000
= .017333 or 1.733%
Rate of Return in Stock Equity:
Data: Time Period = 1 year, Price of Share $ 100/-, One day later $ 101/-.
= .01 or 1.0%
Suppose you hold the stock for a year & at the end stock pays a dividend of $ 5/- and the price is $ 105/-
= .10 or 10.0%
To correct the effects of inflation, economists distinguish between
- Nominal Price: Prices in terms of some currency
- Real Prices: Prices in terms of purchasing power over goods & services
.................1 + Rate of Inflation
= 0.02857 or 2.857%
Stock Market Index:
- It is not diversified enough to accurately reflect the wide spectrum in the U.S.
- It corresponds to a portfolio strategy that is not suitable as a performance benchmark
|Company||Base Year||Now||No. of Shares||Market Value|
| IBM |
| $ 100 |
| $ 50 |
| 200 million |
| $ 20 billion |
$ 5 billion
| $ 10 billion |
$ 11 billion
|Total||$ 25 billion||$21 billion|
|Weight|| 20 / 25 = 0.8 |
5 / 25 = 0.2
| Decline of |
= 0.16 or 16%
........................($ 50 + $ 100) / 2 x 100
................($ 100 + $ 50) / 2
= 106.67 or increase of 6.67%
.......+.....Weight of IBM x Current Price of DEC
..................................................Avg. of Base year Stock Prices) x100
(0.8 x 0.5 + 0.2 x 2.2) x 100
= 0.84 or 84%, a decrease of 16%