Market watch: Uncertainty takes shine off equities’ bull ride

Benchmark KSE 100-share Index falls 254.52 points

KARACHI: Lower crude oil prices and an uncertain situation on the political front were enough triggers for investors to adopt a cautious stance as the benchmark-100 index fell over 250 points to end the week on a bearish note.

The 622-point gain on Thursday meant that investors were eager to book profits, with most notable blue-chips denting the KSE-100 index that retreated from its record high.

At close, the Pakistan Stock Exchange’s benchmark KSE 100-share Index recorded a decline of 0.61% or 254.52 points to end at 41,291.43.

Elixir Securities analyst Ali Raza said equities hit the brakes after sharp gains on Thursday and closed Friday in the red. “The benchmark KSE-100 index dropped as participants, keeping political concerns in mind, traded cautiously ahead of the weekend.



“Friday’s trading activity was largely concentrated in second- and third-tier stocks that dominated volumes chart while activity in blue chip sectors remained subpar on limited institutional interest.

“Notable index names such as United Bank (UBL -0.95%), Pakistan Petroleum (PPL -1.19%), MCB Bank (-0.93%), Hub Power (HUBC -0.88%), DG Khan Cement (DGKC -1.53%), Engro Corp (-0.86%) and Lucky (-0.74%) all closed in the red and cumulatively dented KSE-100 index by over 100 points.

“We expect market to consolidate and trade in the range of 300-400 points at current levels. Politics in our view will remain a dampener in near-term, however, earnings and pay-out related excitement will keep investors’ interest in select stocks alive as on-going quarterly results season comes into full swing from next week.”

Meanwhile, JS Global analyst Nabeel Haroon said negativity prevailed in the market on Friday on the back of political uncertainty.



“Allied Bank (ABL -1.65%) lost value to close in the red zone, as the bank declared its result for 9MCY2016. In its result, the company posted earnings per share (EPS) of Rs10.68 along with cash dividend of Rs2 per share for the quarter taking the 9M2016 pay-out to Rs5.5 per share. Earnings declared by the bank was lower than the street estimates on the back of decline in Net Interest Income (NII) and Non-Core income during the 3Q2016.

“Pakistan Oilfields (POL -1.18%) and Pak Petroleum (PPL -1.19%) in the exploration and production (E&P) sector declined as the crude oil prices declined to trade below $51 per barrel level after statements from Nigeria showing unwillingness to cut production of every variant of crude that they sell in order to increase their share in global oil market. Moving forward, we advise investors to adopt a cautious approach in the market.”

Trade volumes fell to 530 million shares compared with Thursday’s tally of 562 million.

Shares of 438 companies were traded. At the end of the day, 169 stocks closed higher, 258 declined while 11 remained unchanged. The value of shares traded during the day was Rs16.4 billion.

TRG Pakistan was the volume leader with 58.3 million shares, losing Rs0.03 to finish at Rs45.48. It was followed by Bank of Punjab with 54.5 million shares, losing Rs0.14 to close at Rs18.16 and Dost Steel (R) with 37.9 million shares, losing Rs0.14 to close at Rs3.74.

Foreign institutional investors were net buyers of Rs310 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, October 22^nd, 2016.

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