market watch: Stocks bleed fourth day in a row

Benchmark KSE-100 index falls 274.02 points

KARACHI: Pakistan equities continued to present a bearish outlook with the benchmark-100 index dropping below the 39,500-point level to end the week on a negative note.

The bearish finish was the fourth successive day in the red for the KSE-100 Index with cement and oil sectors causing the most damage on Friday.



At close on Friday, the Pakistan Stock Exchange’s benchmark KSE-100 index fell 0.69% or 274.02 points to end at 39,464.65.

Rumours that Lucky’s expansion in the north might mean an end to the existing price arrangement further prodded the bearish streak.

Elixir Securities analyst Ali Raza said equities continued their losing streak as the market plunged soon after the opening bell as oil stocks edged lower on thin volumes following over 3% declines in global crude.

“Thereafter, cements pulled the wider market deeper into the red on rumours that pricing arrangement between cement makers has collapsed amid expansion announcements by most players,” said Raza. “Almost all major cement plays including Lucky Cement (-2.8%), DG Khan (DGKC -2.9%) and Maple Leaf (MLCF -5%) traded lower and failed to recover from their intra-day lows on aggressive selling by institutional investors.

“However, the retail favourite Dewan Cement (DCL +4.8%) bucked the sector’s bearish trend as it hit the upper price limit and churned most volumes on KSE-100 index with participants betting on the probable sale of company’s northern plant.

“Volumes were led by small and mid caps with major sectors barring cements seeing muted activity.



“With chartists seeing strong support at 39,300 levels, we expect market to consolidate with benchmark KSE-100 index hovering in a range of 400-500 points.”

Meanwhile, JS Global analyst Ahmed Saeed Khan said the negativity was led by the oil sector that remained under pressure. “Top laggards of the sector today were POL (-2.10%) and MARI (-2.08%).

“Concerns over the possibility of oversupply situation in the cement industry post expansions by cement manufacturers continued to hamper the cement sector’s sentiments as more than half of the listed cement companies have already announced expansions.

“Lower than expected CPI for the month of August kept the mood dull in the banking sector. Going forward, we expect volatility to persist in the upcoming week, where cautious approach is advised.”

Trade volumes fell to 329 million shares compared with Thursday’s tally of 366 million shares.

Shares of 428 companies were traded on Friday. At the end of the day, 157 stocks closed higher, 251 declined while 20 remained unchanged. The value of shares traded during the day was Rs12.6 billion.

Dewan Cement was the volume leader with 38.7 million shares, gaining Rs1.01 to finish at Rs21.94. It was followed by Byco Petroleum with 28.2 million shares, gaining Rs0.41 to close at Rs26.46 and K-Electric with 19.2 million shares, losing Rs0.14 to close at Rs8.98.

Foreign institutional investors were net sellers of Rs40 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 3^rd, 2016.

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