Market watch: Index slips in red as oil prices slide

Benchmark KSE-100 index falls 115.54 points.

KARACHI: Pakistan equities lost ground on Tuesday tracking weaker performance of regional markets and falling prices of global crude.

At close on Tuesday, the Pakistan Stock Exchange’s benchmark KSE-100 index fell 0.35% or 115.54 points to end at 32,623.02.

Elixir Securities analyst Ali Raza said news of Muslim Commercial Bank (MCB PA +0.03%) in talks with NIB Bank (NIB PA +10.7%) over a possible merger provided early support, causing the latter to churn most volumes since March 2012.



“Index heavy Exploration and Production (E&Ps) lost as much as 2.5% on Tuesday on reports of foreign selling with all four E&P plays namely Oil and Gas Development Company (OGDC PA -2.8%), Pakistan Petroleum Limited (PPL PA -1.8%), Pakistan Oilfields Limited (POL PA -4.2%) and Mari Petroleum (MARI PA -0.9%) ending in red and cumulatively contributing over 80 points to day’s losses.

“However, cements bucked the wider market trend and closed mostly positive with reports of foreign buying in Maple Leaf Cement (MLCF PA +1.01%) and Dera Ghazi Khan Cement (DGKC PA +1.3%). Meanwhile, Engro Foods Limited (EFOODS PA +4.56%) continued its northbound ride and closed near its upper price limit on on-going optimism over its stake-sale deal,” said Raza.

“We expect the market to trade volatile and range-bound at current levels and benchmark KSE-100 index to test support at 32,500 in near term. Participants will likely stay cautious and closely monitor regional markets ahead of US Federal Reserve’s meeting due this week,” he added.

Meanwhile, JS Global analyst Arhum Ghous was of the view that the market remained volatile during the early hours of trade but came under selling pressure as the day progressed.

“NIB (+10.70%), which was Tuesday’s volume leader, gained on the back of news that MCB was in preliminary discussion with NIB bank’s major shareholder (Fullerton Financial Holding Private Limited) for a possible merger of NIB bank into MCB bank.

“GLAXO (+1.76%) continued its previous day gains on the back of notice disseminated in the market that Sindh High Court (SHC) had approved the demerger of consumer health care business of ‘Glaxo SmithKline Pakistan Limited’ into a separate entity by the name of ‘Glaxo SmithKline Consumer Health Care Pakistan Limited’.



“Pak Suzuki Motor Company (PSMC -3.05%) lost value to close in the red zone as the automobile assembler declared its result below market expectations. In its result, the company declared an EPS of Rs70.99 against market expectation of around Rs73.77.”

“Moving forward, we expect global equity markets and crude oil prices to set the tone,” Ghous remarked.

Trade volumes rose to 204 million shares compared with Monday’s tally of 132 million.

Shares of 330 companies were traded. At the end of the day, 116 stocks closed higher, 189 declined while 25 remained unchanged. The value of shares traded during the day was Rs7.9 billion.

NIB Bank was the volume leader with 75.4 million shares, gaining Rs0.23 to finish at Rs2.38. It was followed by K-Electric Limited with 35.5 million shares, gaining Rs0.23 to close at Rs7.04 and Engro Foods Limited with 4.9 million shares, gaining Rs7.28 to close at Rs167.09.

Foreign institutional investors were net buyers of Rs21 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, March 16^th, 2016.

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