Market watch: Index fails to sustain momentum, ends week negative

Benchmark KSE 100-share Index falls 0.43%

February 17, 2017

KARACHI: Security concerns kept investors on edge during Friday’s session with lower-than-expected corporate results denting whatever positive sentiment investors gathered in the morning.

The index lost ground after the opening bell, with the recent attack on a Sufi shrine taking its toll on market sentiment. However, stocks soon gained to help the index end 286 points higher by the close of the morning session. It nosedived right after resumption and remained in the red zone to fall below the 49,400 level.

Market watch: Stocks bounce back, KSE-100 climbs 374 points

At close on Friday, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index finished with a fall of 0.43% or 212.59 points to end at 49,375.71.

Elixir Securities analyst Ali Raza said equities failed to build on Thursday’s momentum and closed negative with Engro Corp ENGRO PA -4.6% primarily spoiling market mood.

“Listless activity and sideways trading was witnessed in the early hours due to the tragic terror attack on a Sufi shrine that kept most investors cautious and at bay,” said Raza.

“However, the wider market soon inched upwards, helped by buying interest in MSCI EM stocks and select sideboards that pushed the KSE-100 Index higher by 286 points at the close of the morning session.

“But the tide quickly turned from the outset of the second session as investors sentiments were hit hard after Engro Corp declared a significantly lower payout despite its recent stake sale of Engro Foods EFOODS PA -1.1%; resulting in stock not only hitting the lower price limit but also dragging the market in the negative zone.

“Meanwhile, key earnings announcements by Oil & Gas Dev OGDC PA -1.2% and United Bank UBL PA -1.5% also failed to excite investors.”

Market watch: KSE-100 loses over 550 points as panic continues

Topline Securities analyst Hammad Aman said that PSX witnessed a volatile session, mainly led by lower than expected dividend announced by Engro Corp which contributed 88 points to the fall. Dawood Hercules Corporation also fell by 5% and contributed 52 points to the index decline.

Sui Southern Gas Company and Sui Northern Gas Pipelines Limited rose by 5% and 1.6%, respectively, following the KPMG study which proposes relaxation in UFG allowance.

Engro announced it earnings per share (EPS) of Rs131.86/share which was above market consensus. The stock price declined by 4.5% as a below expected dividend was announced of Rs4/share.

UBL announced its 4Q2016 EPS of Rs5.1/share along with Rs 4/share cash dividend which was above expectations. However, the stock price declined by 0.6%.

Market watch: Index inches up, but shies away from 50,000

Trading volumes rose to 373 million shares compared with Thursday’s tally of 263 million.

Shares of 416 companies were traded. At the end of the day, 225 stocks closed higher, 178 declined while 13 remained unchanged. The value of shares traded during the day was Rs20.3 billion.

K-Electric Limited was the volume leader with 28.4 million shares, gaining Rs0.09 to close at Rs9.99. It was followed by Power Cement Limited with 25 million shares, gaining Rs1.08 to close at Rs22.83 and Dost Steel Limited with 24.2 million shares, gaining Rs0.12 to close at Rs16.06.

Foreign institutional investors were net sellers of Rs367 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited