Market watch: Stocks fall amid foreign outflows, speculation over super tax

Benchmark KSE-100 index loses 54.98 points

KARACHI: Pakistan’s equities closed negative on trimmed losses on Monday as midday recovery, primarily in oil stocks, helped reduce early declines that had pulled the benchmark index to test 33,500 points.

The Pakistan Stock Exchange’s benchmark KSE 100-share index fell 0.16% or 54.98 points to end at 33,684.56.



Elixir Securities, in its report, said stocks had a lower start as participants accepted the weekend news of a possible extension in super tax of up to 4% - imposed last year on corporates - for one more year.

“Financial shares led the decline and settled 0.75% lower as the development (extension in super tax) is expected to have the most negative impact on the sector’s earnings while shrinking spreads also remain a cause for concern,” said Elixir Securities analyst Faisal Bilwani.

“Cement and fertiliser stocks followed suit and contributed to the day’s losses with the former dragged down after Lucky Cement (-0.8%) announced lower-than-expected quarterly earnings.”

Engro Fertilizers (+0.2%) managed to achieve a marginally positive close as its Q1 results beat estimates.

“Despite an overall bearish trend, oil shares posted a recovery near midday following a surge in global crude and settled 0.94% higher with Pakistan Petroleum Limited (+3.5%) leading the institutional buying,” said Bilwani.

The analyst expected to see a volatile market as earnings were overshadowed by politics and macros and institutions continued to remain on the sidelines. “Small and mid-caps will possibly lead and stage a recovery as the week progresses on retail interest.”

Meanwhile, JS Global analyst Ahmad Saeed Khan said the market opened on a negative note with the index hitting an intraday low of 247 points, however, it recovered to close just 55 points down.

“Banking sector was a major laggard due to depressed banking spreads for March 2016 as United Bank Limited (-1.84%), Habib Bank Limited (-0.78%) and MCB Bank (-0.55%) all closed in the red zone.”

Also profit-taking continued in the cement sector, where Lucky Cement announced lower-than-expected 9MFY16 EPS of Rs29.73.

“On the other hand, Engro Fertilizers rallied after announcing its 1Q2016 results, where EPS stood at Rs1.55, which was above market expectations,” Khan said.



Mixed sentiments prevailed in the oil and gas sector as global crude oil prices retreated by about 1.5% from its high over the weekend.

Trade volumes fell to 171 million shares compared with Friday’s tally of 209 million.

Shares of 347 companies were traded. At the end of the day, 171 stocks closed higher, 157 declined while 19 remained unchanged. The value of shares traded during the day was Rs6.4 billion.

Telecard Limited was the volume leader with 14.6 million shares gaining Rs0.51 to finish at Rs3.57. It was followed by Dewan Motors with 14.5 million shares gaining Rs0.36 to close at Rs13.04 and Sui Northern Gas Pipelines Limited with 13.4 million shares gaining Rs0.62 to close at Rs31.80.

Foreign institutional investors were net sellers of Rs60 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, April 26^th,  2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.