Market watch: Stocks close marginally positive as analyst advises caution

Benchmark KSE-100 index closes up 30 points at 36,265.12

KARACHI: Pakistan equities closed on Tuesday marginally positive as gains in cement and industrial stocks were offset by losses in oil and financial sectors.

At close, the benchmark KSE 100-share index recorded a rise of 0.08% or 30.13 points to 36,265.12.

Elixir Securities, in its report, said stocks opened lower on thin volumes as investors traded cautiously in early trade, primarily due to lower global crude prices and in absence of any clear direction pertaining to institutional flows while political noise also played its role in dampening the excitement.



“As day progressed, the benchmark attempted to retest new highs mainly led by sharp gains in cement and industrial stocks with buying reportedly by local managers,” it said.

“Reports of foreign selling in select bank and fertiliser companies kept the upside in check with the KSE-100 index ending the day little changed.”

Small and mid-caps, on the other hand, kept retail investors busy with top 15 stocks on the volumes chart were below Rs100 per share.

“We see flows-driven market and investors closely tracking global crude as any sharp downside could trigger profit-taking in oil stocks and subsequently pull the benchmark to test support levels of 35,500,” noted Elixir Securities analyst Faisal Bilwani.

JS Global analyst Ahmed Saeed Khan said mixed activity was observed at the bourse, as the market turned positive after opening on a negative note.

“Investor interest was seen in the cement sector with Dewan Cement (+5.7%), Cherat Cement Company (+2.3%) and Lucky Cement (+1.5%) attracting investor interest.”

“Moreover, gas utility companies - Sui Northern Gas Pipelines Limited (+1.1%) and Sui Southern Gas Company (+1%) gained on the back of news that Pakistan and Italy might sign a government-to-government deal for the supply of LNG,” he said.

On the other hand, slight correction was seen in stocks expected to be part of the MSCI Emerging Market Index as United Bank Limited (-1.6%), Oil and Gas Development Company (-0.6%) and Pakistan State Oil (-0.4%) lost ground.

“We recommend investors to stay cautious of any profit-taking in the market,” Khan said.

Trade volumes rose to 281 million shares compared with Monday’s tally of 273 million.

Shares of 371 companies were traded. At the end of the day, 183 stocks closed higher, 165 declined while 23 remained unchanged. The value of shares traded during the day was Rs11.8 billion.

Dewan Cement was the volume leader with 59.5 million shares, gaining Rs0.89 to finish at Rs16.37. It was followed by Dewan Motors with 29 million shares losing Rs0.07 to close at Rs16.48 and Sui Northern Gas Pipelines with 18.5 million shares gaining Rs0.38 to close at Rs36.42.



Foreign institutional investors were net sellers of Rs624 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, May 11^th, 2016.

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