Portfolio Analysis and Management

Assignment

Syed Umair Javed MBA-4G

Crude Oil Prices Going Down

Oil prices dropped to new lows for the year Monday on speculation that Greece could abandon the euro currency. Benchmark West Texas Intermediate crude lost $1.35 to end the day at $94.78 per barrel on the New York Mercantile Exchange. That's the lowest level since Dec. 19. In London, Brent crude was down $1.61 at $110.65 per barrel on the ICE Futures exchange. In other energy trading, heating oil was down 3.46 cents to $2.9290 per gallon and gasoline futures lost 2.87 cents to $2.9721 per gallon. Natural gas fell 0.8 cent to $2.501 per 1,000 cubic feet. Gasoline prices at the pump in the USA have come down almost 21 cents a gallon since April, when they hit a year high of $3.939 cents. The latest drop in crude prices should help keep them down. Oil traders were also concerned about China's slowing growth hurting demand. The government said Friday that industrial production growth in April weakened and electricity output was little changed. But traders brushed off China's announcement Saturday that it plans to cut its bank reserve requirement by 0.5 percentage points. The third reserve ratio cut since November is designed to boost lending and spark economic growth. Speculation that Greece will abandon the eurozone helped boost the dollar, and that pushes down crude oil prices by making commodities like oil more expensive for investors trading in other currencies. Oil is traded in dollars. The euro was down to $1.2866 from $1.2925 late Friday in New York. "The euro/dollar (exchange rate) is starting the week under pressure and the global markets should continue to suffer from some risk-off positioning until we can have a better idea of what happens next in Greece. Some analysts say the recent oil price slump crude is down more than 10% from earlier this month isn't being driven by global supply and demand fundamentals, but rather seasonal factors, which see traders, sell assets at the beginning of the summer months. "There's little to the latest price action than the increasingly self-fulfilling prophecy of 'sell it in May and go away', with broader macroeconomic concerns used as a lightening rod," Barclays said in a report. "U.S. oil demand is improving while Asian demand remains robust."

Why KSE Prices Going to fall in Near Future

The Karachi Stock Exchange (KSE) is likely to witness bearish activities during trading session on Tuesday. It is expected that investors will opt for profit taking activities as implementation of reformed CGT regime is not expected in near future. k downward momentum The Karachi Stock Exchange-KSE benchmark 100-share index fell by 28.73 points on Monday and ended the session at 13,770.70 points. The Karachi Stocks Exchange Halal Index gained 216.55 points as market closed at the level of 23,917.37 points as against 23,700.82 points, the closing figure of the previous session.

The trading session remained dull as the Halal Index witnessed volumes of 45.542 million shares as compared to 96.885 million shares traded in the previous session. However, some healthy activities witnessed on first trading day of the weak mainly dominated by cement and oil sector. Cement sector remained the star performer as sentiments of investors remained higher over the news of export dispatches to India. Oil sector is also enjoying renewed buying interest shown by foreign and institutional investors ahead of quarterly corporate result announcement. National Clearing Company of Pakistan Limited (NCCPL) data revealed that foreign institutional investors were net buyers of Rs 293.001 million worth of shares. DG Khan Cement (DGKC) the volume leader among Halal stocks as its scrip recorded trading of 16.738 million shares; the scrip gained Rs 1.88 to end the day at Rs 40.30 after opening at Rs 38.42. It was followed by Pakistan Telecommunication Limited (PTCL) with 10.680 million shares traded, and lost the value by Rs. 0.12 to close at Rs. 12.96 per share where it opened at Rs. 13.08. It was followed by Fauji Fertilizer company limited (FCCL) witnessing 3.591 million shares traded, and gained by Rs. 3.36 from the opening price of Rs. 115.60 to finish at Rs. 118.96..KSE,