Market watch: KSE-100 edges up despite tumbling oil prices

Benchmark index rises 41.40 points to settle at 32,464.23

KARACHI: The Pakistan Stock Exchange (PSX) got some respite on Wednesday, after a disappointing end to the previous session, and closed slightly positive amid mixed trading.

Earlier, trading began with a steep decline and the KSE-100 index extended losses. However, after midday it started showing signs of recovery. It came on the back of expected relief in debt payments coupled with stability of the rupee against the US dollar.

Furthermore, the State Bank of Pakistan received $1.39 billion under the Rapid Financing Instrument from the International Monetary Fund (IMF), which provided support to the bourse.

At close, the benchmark KSE-100 index recorded an increase of 41.40 points, or 0.13%, to settle at 32,464.23.

Arif Habib Limited, in its report, stated that tumbling international crude prices, especially those of Brent, which traded below $16 per barrel briefly, caused the damage to investor sentiment.

“Pre-open session saw oil and gas (exploration, production and marketing) stocks with heavy volumes on offer. The market opened on a negative note and registered a loss of 529 points during the session,” it said.

Through most of the day, the benchmark index traded in the red zone with sporadic recovery due to investor interest in banking-sector stocks.

“The cement sector continued to rally on expectation of increase in cement prices in coming days in the northern region, which would improve the bottom line of listed cement companies, in addition to the impact of significantly lower coal prices (hovering around $50 per ton),” it added.

Furthermore, financial results of HBL, MCB and ABL brought back some activity. HBL saw selling activity despite announcement of dividend whereas MCB Bank realised some price gains.

Stocks that contributed positively to the index included MCB (+40 points), Lucky Cement (+27 points), Bank AL Habib (+16 points), Fauji Fertiliser Company (+14 points) and Kapco (+13 points).

Meanwhile, stocks that contributed negatively were HBL (-44 points), Dawood Hercules (-36 points), Hubco (-34 points), Pakistan Petroleum (-29 points) and Engro (-22 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed on a flat note at 32,464, up 41 points, after a mixed trading session.

Overall, volumes remained lower as compared to Tuesday’s session. However, activity was observed in financial and cement sectors.

Among financials, ABL (+3.4%) announced 1QCY20 consolidated earnings per share (EPS) of Rs3.40 versus Rs2.70 in the same period of last year with cash payout of Rs2 per share. MCB (+2.8%) announced 1QCY20 consolidated EPS of Rs5.59 versus Rs4.21 in the same period of last year with cash payout of Rs5 per share.

HBL (-2.6%) announced 1QCY20 consolidated EPS of Rs2.79 versus Rs2.08 in the corresponding period of previous year with dividend of Rs1.25 per share.

In the cement sector, Pioneer Cement (+7.5%) and Fecto Cement (+7.5%) closed at their upper limits whereas Maple Leaf Cement (+4.5%) was again the volume leader.

Pakistan Petroleum Limited (-2.5%) and Pakistan Oilfields Limited (-0.8%) in the exploration and production sector remained under pressure on the back of global oil demand crunch.

“Going forward, we expect the market to remain under pressure and recommend investors to sell on strength,” the analyst added.

Overall, trading volumes decreased to 239.9 million shares compared with Tuesday’s tally of 339.2 million. The value of shares traded during the day was Rs10.3 billion.

Shares of 336 companies were traded. At the end of the day, 172 stocks closed higher, 136 declined and 28 remained unchanged.

Maple Leaf Cement was the volume leader with 47.7 million shares, gaining Rs1.20 to close at Rs27.99. It was followed by Hascol Petroleum with 17.4 million shares, gaining Rs0.04 to close at Rs13.89 and DG Khan Cement with 13.8 million shares, gaining Rs1.49 to close at Rs87.70.

Foreign institutional investors were net sellers of Rs199.9 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.