Market watch: KSE-100 falls slightly ahead of monetary policy

Benchmark index decreases 17.27 points to settle at 40,607.12

KARACHI: The stock market remained largely range bound on Wednesday and closed marginally negative following the State Bank of Pakistan's projection of economic growth slowdown to 4-4.5% in FY19, announced in its first-quarter report.

The growth forecast, coupled with market speculation about the upcoming monetary policy, set to be unveiled on Thursday, kept investors at bay. Market participants anticipated that the central bank would keep the key interest rate unchanged.

On the other hand, PM Adviser Abdul Razak Dawood's statement that the trade deficit would go down by $6 billion in the current fiscal year proved to be a driving force at the bourse. However, the trigger was not strong enough that could help the market end trading in the black.



Earlier, the market got off to a positive start and made considerable gains, however, investor participation shrank near midday, wiping out the gains. From that point onwards, the bourse turned bearish and the KSE-100 index closed slightly above the 40,600-point mark.

At the end of trading, the benchmark KSE 100-share Index recorded a decrease of 17.27 points, or 0.04%, to settle at 40,607.12.

Arif Habib Limited, in its report, stated that the market performed in a way similar to what it did on Tuesday, oscillating between +153 points and -94 points with total volumes of 125 million shares.

"Nervousness among investors was quite apparent as the day approaches for the monetary policy, which will be announced tomorrow (Thursday)," it said. "Selling was noted across the food, technology, cement, steel and chemical sectors."

In the banking sector, Habib Bank and United Bank came under selling pressure and traded in the red zone. Fertiliser stocks bore the brunt of negative sentiments and Fauji Fertiliser Bin Qasim, despite posting decent results, failed to garner investor support.

Stocks that contributed positively included Nestle (+19 points), Dawood Hercules (+16 points) and MCB Bank (+10 points). Stocks that contributed negatively included Pakistan Tobacco (-21 points), Fauji Fertiliser (-19 points) and Engro (-18 points).

JS Global analyst Maaz Mulla said the market kicked off on a positive note, hitting an intraday high of +152 points. However, a range-bound session was witnessed later as investors remained cautious, he said.

Trading remained dull with 125 million shares changing hands. Fauji Foods (-0.6%), Pakistan International Airlines (+1.6%) and Siddiqsons Tinplate (+5%) led the volumes with cumulative trading in more than 24 million shares.

Bank AL Habib (-0.7%) from the banking sector declared its CY18 results where the bank posted earnings per share of Rs7.57 and declared cash dividend of Rs2.50 per share.

Fauji Fertiliser (-2.7%) declared its CY18 results, posting earnings per share of Rs1.68 and announcing cash payout of Re1 per share.



"Going forward, we recommend investors to remain cautious and wait for clarity regarding the IMF package, however, one can reduce short-term positions on strength," he added.

Overall, trading volumes decreased to 125 million shares compared with Tuesday's tally of 154.7 million. The value of shares traded during the day was Rs4.97 billion.

Shares of 360 companies were traded. At the end of the day, 143 stocks closed higher, 186 declined and 31 remained unchanged.

Fauji Foods was the volume leader with 10.3 million shares, losing Rs0.19 to close at Rs33.51. It was followed by Pakistan International Airlines with 7.2 million shares, gaining Rs0.12 to close at Rs7.46 and Siddiqsons Tinplate with 6.8 million shares, gaining Rs1.09 to close at Rs23.33.

Foreign institutional investors were net buyers of Rs164 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.