Market watch: Stocks continue negative ride

Benchmark KSE-100 index falls 82.92 points

KARACHI: Pakistan stocks endured another day in the red, as the benchmark-100 index slipped below the 36,500-point mark.

Morning gains proved short-lived amid thin and selected participation with interest limited to small and mid-cap stocks. Pre-budget uncertainty and profit-taking meant equities remained under pressure in a volatile day of trading.

At close on Wednesday, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share index fell 0.23% or 82.92 points to end at 36,499.43.



According to Elixir Securities, stocks opened positive with oils leading the way as investors tracked higher global crude, while index heavy Habib Bank Limited (HBL PA +0.3%) and MCB Bank (MCB PA -1.7%) that underperformed recently also lent in early support; pushing benchmark KSE-100 index higher over 36,750.

“However, other major sectors, especially cements and fertilisers failed to follow and skidded lower in absence of triggers and lack of investors’ interest, while oils also pared gains during the day on profit-taking reportedly by local institutions; leading benchmark index to shed all its morning gains and enter the red zone,” said analyst Ali Raza.

“Meanwhile, Hub Power (HUBC PA +1.6%) resumed its northbound ride after yesterday’s correction and contributed most points to KSE-100 index.

“Overall, most action was seen in small and mid-cap plays with K-Electric (KEL PA -1.7%) topping the volumes chart,” Raza added.

Meanwhile, JS Global analyst Arhum Ghous said volatility prevailed in the market as the index traded between an intraday high of 185 points and intraday low of -99.

“PSMC (3.15%) and HCAR (0.83%) in the automobile sector continued their upward trajectory on the back of depreciating yen,” said Ghous.

“OGDC (+0.90%), POL (+0.73%) and PPL (+0.26%) in the E&P sector gained to close in the green zone, as crude oil prices recovered to trade above $49/bbl level.



“Banking sector continued to remain under pressure on the back of 25 basis point cut in the discount rate in the latest MPS announced by SBP on Saturday,” he said.

“MCB (-1.71%) was one of the major laggards of the aforementioned sector. Investor interest was seen in DSL (+2.88%) as the company, in its notice disseminated to the market, announced approval of Board of Directors for issuance of right shares and zero coupon convertible Term Finance Certificate to establish rebar and re-rolling plant in the north region,” Ghous added.

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

Trade volumes fell to 269 million shares compared with Tuesday’s tally of 298 million.

Shares of 374 companies were traded. At the end of the day, 168 stocks closed higher, 181 declined while 25 remained unchanged. The value of shares traded during the day was Rs9 billion.

K-Electric Limited was the volume leader with 50.1 million shares, losing Rs0.14 to finish at Rs8.03. It was followed by Pace (Pak) Limited with 22.6 million shares, gaining Rs0.33 to close at Rs7.41 and Power Cement Limited with 18.3 million shares, gaining Rs0.43 to close at Rs11.35.

Foreign institutional investors were net sellers of Rs142 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

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

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