Market watch: Stock market dips over MSCI review concerns
Benchmark KSE-100 index falls 473.38 points
Benchmark KSE-100 index falls 473.38 points. PHOTO: PPI
KARACHI:
The stock market experienced a slide on Friday with concerns over MSCI review exerting over-whelming influence on the investors.
The Pakistan Stock Exchange’s benchmark KSE 100-share index fell 1.27% or 473.38 points to end at 36,940.88.
According to Elixir Securities analyst Ali Raza, equities tumbled to levels below 37k as concerns over Pakistan not getting an upgrade in the upcoming MSCI review caused the slide.
“The market opened sideways and skidded lower on thin volumes with index-heavy exploration and production sector taking the lead in declines, tracking the downturn in global crude prices.
“Soon after, index names particularly those that are top candidates for the MSCI EM (Emerging Market) index came under selling pressure reportedly from select local institutions as they repositioned themselves fearing a possible delay in Pakistan’s entry into the MSCI EM index.”
Most index names closed in the red seeing no major support at lows, while small and mid-level caps also followed the market direction and closed lower.
“Engro Corp (-2.5%) contributed the most to the index decline (66 points), followed by Hub Power (-2.6%), Oil and Gas Development Company (-2.2%), United Bank (-2.2%), MCB Bank (-1.4%), Habib Bank (-1.1%) and Lucky Cement (-1.5%) as they cumulatively dented the benchmark index by nearly 187 points.”
Elixir’s report foresees choppy and volatile trading at the start of next week with MSCI verdict on Tuesday eventually setting the tone for the market.
Meanwhile, JS Global analyst Ahmed Saeed Khan stated that negativity prevailed during the week with relatively low volumes traded.
“PSX followed its regional and global peers that remained negative on the back of concerns over sluggish global growth and also ahead of MSCI decision to upgrade Pakistan to the Emerging Market index.
“After a week-long rally in cement stocks, profit-taking was witnessed in the sector. Biggest laggard of the sector was Lucky Cement.”
Despite petrol sales hitting their high for May and international crude oil prices standing strong above $51.50 per barrel, the oil sector remained under pressure where the biggest losers were Mari Petroleum (-4.17%) and OGDC (-2.21%).
“At large, investors decided to lower their exposure and maintain some cash position before the MSCI reclassification. Moving forward, we advise a cautious approach.”
Trade volumes fell to 109 million shares compared with Thursday’s tally of 140 million.
Shares of 334 companies were traded. At the end of the day, 49 stocks closed higher, 265 declined while 20 remained unchanged. The value of shares traded during the day was Rs7.02 billion.
K-Electric was the volume leader with 13.9 million shares losing Rs0.03 to finish at Rs7.97. It was followed by Pakistan International Bulk Terminal with 9.2 million shares losing Rs0.73 to close at Rs32.28 and TRG Pakistan with 4.6 million shares losing Rs1.41 to close at Rs34.29.
Foreign institutional investors were net sellers of Rs320 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.
Published in The Express Tribune, June 11th, 2016.
The stock market experienced a slide on Friday with concerns over MSCI review exerting over-whelming influence on the investors.
The Pakistan Stock Exchange’s benchmark KSE 100-share index fell 1.27% or 473.38 points to end at 36,940.88.
According to Elixir Securities analyst Ali Raza, equities tumbled to levels below 37k as concerns over Pakistan not getting an upgrade in the upcoming MSCI review caused the slide.
“The market opened sideways and skidded lower on thin volumes with index-heavy exploration and production sector taking the lead in declines, tracking the downturn in global crude prices.
“Soon after, index names particularly those that are top candidates for the MSCI EM (Emerging Market) index came under selling pressure reportedly from select local institutions as they repositioned themselves fearing a possible delay in Pakistan’s entry into the MSCI EM index.”
Most index names closed in the red seeing no major support at lows, while small and mid-level caps also followed the market direction and closed lower.
“Engro Corp (-2.5%) contributed the most to the index decline (66 points), followed by Hub Power (-2.6%), Oil and Gas Development Company (-2.2%), United Bank (-2.2%), MCB Bank (-1.4%), Habib Bank (-1.1%) and Lucky Cement (-1.5%) as they cumulatively dented the benchmark index by nearly 187 points.”
Elixir’s report foresees choppy and volatile trading at the start of next week with MSCI verdict on Tuesday eventually setting the tone for the market.
Meanwhile, JS Global analyst Ahmed Saeed Khan stated that negativity prevailed during the week with relatively low volumes traded.
“PSX followed its regional and global peers that remained negative on the back of concerns over sluggish global growth and also ahead of MSCI decision to upgrade Pakistan to the Emerging Market index.
“After a week-long rally in cement stocks, profit-taking was witnessed in the sector. Biggest laggard of the sector was Lucky Cement.”
Despite petrol sales hitting their high for May and international crude oil prices standing strong above $51.50 per barrel, the oil sector remained under pressure where the biggest losers were Mari Petroleum (-4.17%) and OGDC (-2.21%).
“At large, investors decided to lower their exposure and maintain some cash position before the MSCI reclassification. Moving forward, we advise a cautious approach.”
Trade volumes fell to 109 million shares compared with Thursday’s tally of 140 million.
Shares of 334 companies were traded. At the end of the day, 49 stocks closed higher, 265 declined while 20 remained unchanged. The value of shares traded during the day was Rs7.02 billion.
K-Electric was the volume leader with 13.9 million shares losing Rs0.03 to finish at Rs7.97. It was followed by Pakistan International Bulk Terminal with 9.2 million shares losing Rs0.73 to close at Rs32.28 and TRG Pakistan with 4.6 million shares losing Rs1.41 to close at Rs34.29.
Foreign institutional investors were net sellers of Rs320 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.
Published in The Express Tribune, June 11th, 2016.