Market watch: KSE-100 closes in the green amid volatile activity

Benchmark index edges up 54.22 points to settle at 42,841.41

KARACHI: The stock market endured volatile activity on Monday as the KSE-100 index plunged in the first half, but managed to recover later, sending the bourse back in the green before close.

The KSE-100 traded in a narrow range in early hours, but later it succumbed to profit-taking and lost 297 points in intra-day trading. Following this, the index shot up, but closed little changed compared to the previous day.

Owing to an increase in global urea prices, the fertiliser sector performed well, which emerged as a positive trigger for the index.

At close, the benchmark KSE 100-share Index recorded a rise of 54.22 points or 0.13% to stand at 42,841.41.

Elixir Securities, in its report, stated Pakistan equities closed little changed after a lacklustre and volatile trading session on declining activity.

"The market after a sideways open traded in a narrow range before succumbing to profit-taking at midday and later witnessed recovery on selective buying reportedly by foreign institutional investors," stated Elixir.



More specifically, fertiliser stocks came under the investors' radar likely on expectations of early clearance of subsidy claims by the government while reports of aggressive foreign institutional buying in the sector also did rounds.

Fauji Fertilizer Company (FFC, +5%), Fauji Fertilizer Bin Qasim (FFBL, +4.9%) and Engro Fertilizers (+4.7%) closed significantly higher.

However, other major sectors including financials showed limited interest and closed lower barring MCB Bank (+4.2%) that stood strong and weathered the general trend on reported foreign interest following FTSE index's rebalancing last Friday.

On the earnings front, Kohat Cement (-5%) failed to impress market players after poor final-quarter results and finished at its lower price limit.

"The KSE-100 index is expected to find resistance at 43,000 and flows primarily from institutional investors are expected to guide market direction in the days ahead," the report added.



JS Global analyst Maaz Mulla said the KSE-100 index experienced a volatile session throughout the day, hitting an intra-day high of +138 points and intra-day low of -297 points.

Market volumes remained low as total volume for the All-Share Index touched 114 million shares, 43% down from the last trading day.

Major gainers were MCB Bank (+4.15%), FFC (+5%), Engro Fertilizers (+4.65%) and Engro Corp (+1.69%). On the flipside, Habib Bank (-1.40%), Lucky Cement (-2.25%), Hubco (-1.64%) and DG Khan Cement (-1.88%) were major negative contributors to the index.

Kohat Cement (-5%) closed at its lower circuit as its results for FY17 stood below investors' expectations. The company announced FY17 earnings per share of Rs22.94 and final dividend of Rs2 per share.

"Overall, the cement sector closed -1.5% lower on the back of Rs10-15 per bag price cut rumours. Pioneer Cement (-2.67%), DG Khan Cement (-1.88%) and Lucky Cement (-2.25%) were  major losers of the sector," Mulla said.



Fertiliser stocks recorded a rally as inventory stockpiles showed some improvement. Current inventory stands at 0.695 million tons as compared to 1 million tons at the beginning of the year, while increasing international urea prices was another catalyst for Monday's performance.

Owing to these factors, FFC (+5%), FFBL (+4.91%) and Engro Fertilizers (+4.65%) hit their respective upper circuits.

"We do not expect recovery in the market to continue for long. We recommend investors to stay cautious and utilise every possible opportunity to sell," the analyst added.

Overall, trading volumes fell to 113 million shares compared with Friday's tally of 200 million.

Shares of 367 companies were traded. At the end of the day, 138 stocks closed higher, 213 declined while 16 remained unchanged. The value of shares traded during the day was Rs7.4 billion.

Dost Steels was the volume leader with 10.8 million shares, gaining Rs0.48 to close at Rs12.59. It was followed by TRG Pakistan with 8.4 million shares, gaining Rs1.04 to close at Rs39.67 and Engro Fertilizers (ex-dividend) with 6.4 million shares, gaining Rs2.71 to close at Rs61.01.

Foreign institutional investors were net sellers of Rs5.5 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.