Market watch: Stocks dip as profit-taking comes into play

Benchmark KSE-100 index falls 141 points

KARACHI: Pakistan equities snapped their seven-day positive streak as the benchmark KSE-100 index dipped close to the 36,500 level amid profit-taking and lack of interest in financial stocks.

At close on Tuesday, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share index fell 0.38% or 141 points to end at 36,582.35.



Elixir Securities, in its report, said stocks opened sideways and drifted lower as institutions became sellers in index names in absence of major flows and any concrete news apart from the proposal to increase tax on dividends.

“Exploration and Production (E&Ps) and financials remained out of favour and led Tuesday’s declines with former tracking marginal losses in global crude and later on recent 25bps rate hike.”

“Index heavy Hub Power Company (HUBC PA -2.5%) that had gained over 6.5% in previous four sessions topped the sell list with stock seeing most daily volumes in the last nine months,” said the report.

“Overall, small and mid-caps saw most activity with K-Electric (KEL PA +3%) churning highest volumes and contributing most points to KSE-100 index over rumours of a possible stake-sale deal at a premium to market.

“Moreover, recently-listed lubes distributor Hi-Tech Lubricants (HTL PA +4.3%) closed higher after hitting upper price limit intra-day as investors bets on company securing oil marketing licence from the regulator,” it added.

“We expect volatile trading to continue with benchmark index hovering in the range of 500 to 800 points on lack of near-term positive triggers,” remarked Elixir Securities analyst Ali Raza.

Meanwhile, JS Global analyst Ahmed Saeed Khan said bears came into play as the index lost 141 points.



“Heavy weight oil sector remained under pressure on the back of global crude oil prices continuing its negative trajectory to trade near $48/barrel (Brent).”

“Major laggards of the aforementioned sector were Pakistan Oilfields Limited (POL -2.37%) and Oil and Gas Development Company (OGDC -1.77%).”

“The banking sector continued to remain under pressure after SBP cut the Policy Rate to 5.75% to boost growth, where HBL (-0.76%) and MCB (-1.73%) were the major laggards of the sector.

“Marginal positivity was witnessed in the automobile sector on the back of depreciating yen, as top performers of the sector were Indus Motors Limited (INDU +0.25%) and Pak-Suzuki Motor Company Limited (PSMC +1.75%).”

“Moving forward, we remain bullish on the market and recommend accumulation in dips, ahead of MSCI Emerging Market reclassification,” said Khan.

Trade volumes rose to 298 million shares compared with Monday’s tally of 265 million.

Shares of 385 companies were traded. At the end of the day, 156 stocks closed higher, 199 declined while 30 remained unchanged. The value of shares traded during the day was Rs11.4 billion.

K-Electric Limited was the volume leader with 65.3 million shares, gaining Rs0.24 to finish at Rs8.17. It was followed by Lotte Chemical with 20.8 million shares gaining, Rs0.30 to close at Rs6.72 and Sui Northern Gas Pipelines with 15.7 million shares, gaining Rs0.21 to close at Rs37.93.

Foreign institutional investors were net buyers of Rs237 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, May 25^th, 2016.

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