Market watch: Stocks fall sharply on fears of foreign outflows

Benchmark KSE 100-share index loses 350.31 points.

KARACHI: Pakistan equities traded volatile on Monday and lost another 1% on Brexit aftershocks, however, turnover was thin and less than half of Friday’s session due to cautious trading by retail investors.

A positive open was swiftly followed by losses in the wake of reports of institutional selling and the benchmark KSE 100-share Index tested lows below 37,000 points.

At close, the Pakistan Stock Exchange’s benchmark index recorded a fall of 0.94% or 350.31 points to end at 37,039.57.



Elixir Securities, in its report, said financial stocks did most of the damage with Habib Bank Limited (-2.9%), United Bank Limited (-2.3%) and MCB Bank Limited (-2.8%) all losing ground and clipping roughly 163 points off the KSE-100 index.

“Nishat Mills Limited (-5%) hit the lower price limit on concerns that the company’s exports to the EU will be hurt given uncertainty in the region while weaker British pound makes its products less attractive.”

K-Electric (+3%) was the volume leader and gained after unconfirmed media reports of Shanghai Electric’s interest in the company while few suggested a local consortium was joining hands to buy a strategic stake and management control.

“We see support to kick in at lows on Tuesday while investors are expected to continue to monitor where smart money is headed in global markets and/or commodities,” commented Elixir Securities analyst Faisal Bilwani.

“Having said this, we expect a pullback in the wider market ahead of fiscal year close and long Eid holidays starting July 5, 2016,” he added.

JS Global analyst Arhum Ghous said the KSE-100 index extended its losses as it shed around 350 points to close at 37,039 following the global sell-off post-Britain’s decision to leave the European Union. MCB, UBL and Lucky Cement (-2.26%) were the major index movers.

“Oil and Gas Development Company (-1.79%), Pakistan Petroleum Limited (-0.92%) and Pakistan Oilfields Limited (-0.65%) in the exploration and production sector remained under pressure and closed in the red zone, as crude oil prices lost value to close around $45 per barrel (WTI).”

K-Electric gained on the back of news reports saying that Shanghai Electric had decided to go ahead with acquisition of the company.

“Moving forward, we expect the market to remain under pressure and advise accumulation on dips,” said Ghous.

Trade volumes decreased to 163.7 million shares compared with Friday’s tally of 236.8 million.



Shares of 323 companies were traded. At the end of the day, 121 stocks closed higher, 181 declined while 21 remained unchanged. The value of shares traded during the day was Rs7.8 billion.

K-Electric was the volume leader with 55.2 million shares, gaining Rs0.24 to finish at Rs8. It was followed by WorldCall Telecom with 9.8 million shares, losing Rs0.05 to close at Rs1.91 and Nishat Mills Limited with 7.5 million shares, losing Rs5.27 to close at Rs105.09.

Foreign institutional investors were net sellers of Rs421.9 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, June 28^th, 2016.

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