Market watch: PSX ends week on lacklustre note

Benchmark KSE-100 index slips 0.14% to settle at 32,806.38

KARACHI: The stock market failed to sustain its bullish momentum on Friday as the benchmark KSE-100 index closed on a negative note despite an upward march in initial hours of trading.

Market participants remained cautious over economic uncertainty caused by a Moody’s report which projected that Pakistan’s fiscal deficit would reach 9.5-10% in fiscal year 2020 and growth would contract 0.1-0.5%.

Announcement of quarterly corporate results in cement, automobile and fertiliser sectors prevented investors from accumulating stocks with selling pressure weighing on sentiment.

At close, the benchmark KSE-100 index recorded a decrease of 44.45 points, or 0.14%, to settle at 32,806.38.

Arif Habib Limited, in its report, stated that the market traded in a narrow range on the last day of the rollover week. The benchmark index oscillated between -111 points and +218 points and closed the session down by 44 points.

The pre-open session saw announcement of financial results of Oil and Gas Development Company (OGDC), Lucky Cement and Maple Leaf Cement as key triggers for the cement, and exploration and production sectors.

“OGDC skipped dividend payment, which disappointed some investors, but high oil prices still kept interest alive,” it said.

“Similarly, Maple Leaf Cement and Lucky Cement posted poorer-than-expected results, which reflected on prices of both the stocks earlier in the session, however, they recovered to some extent.”

The report added that by the close of session, cement-sector stocks remained in the red as well as engineering, oil and gas marketing, refinery and fertiliser stocks.

Meanwhile, HBL and UBL in the banking sector managed to post some price gains and the exploration and production sector also remained in the green.

Stocks that contributed positively to the index included Fauji Fertiliser Company (+26 points), Hubco (+19 points), Systems Limited (+16 points), UBL (+11 points) and Mari Petroleum (+11 points).

Meanwhile, stocks that contributed negatively were Engro Fertilisers (-16 points), Pakistan Tobacco (-16 points), PSO (-15 points), Dawood Hercules (-14 points) and Philip Morris (-11 points).

JS Global analyst Danish Ladhani said the benchmark KSE-100 index closed on a flat note at 32,806. “The market remained slack with thin volumes and participation ahead of Ramazan,” he commented.

Moreover, OGDC (+0.1%) in the exploration and production sector announced 9MFY20 earnings per share (EPS) of Rs19.45 versus Rs19.84 in the same period of last year with no dividend.

“Profit-taking was seen in the cement sector where Lucky Cement (-0.5%) announced EPS of Rs4.45 for 3QFY20 whereas Maple Leaf Cement (+0.6%) announced 9MFY20 EPS of Rs3.20 versus Rs2.75 last year with no cash payout,” Ladhani added.

Furthermore, Lucky Cement (-0.5%), MCB (-0.1%), DG Khan Cement (-0.4%) and Engro (-0.5%) were amongst major losers during the session.

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

Overall, trading volumes decreased to 120.6 million shares compared with Thursday’s tally of 204.4 million. The value of shares traded during the day was Rs4.9 billion.

Shares of 332 companies were traded. At the end of the day, 101 stocks closed higher, 209 declined and 22 remained unchanged.

Hascol Petroleum was the volume leader with 14.3 million shares, losing Rs0.33 to close at Rs14.60. It was followed by Maple Leaf Cement with 14.17 million shares, gaining Rs0.15 to close at Rs26.87 and Kot Addu Power Company with 11.98 million shares, losing Rs0.01 to close at Rs23.21.

Foreign institutional investors were net sellers of Rs152 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.