Market watch: Bearish spell continues at stock market

Benchmark KSE-100 index drops 366.17 points to settle at 45,362.58

KARACHI:

Pakistan’s stock market continued to lose ground for the third consecutive day on Wednesday as the benchmark KSE-100 index shed over 350 points.

The bearish momentum prevailed in the absence of major positive triggers which could provide direction to the market.

Uncertainty surrounding the Financial Action Task Force (FATF) meeting and falling global equity markets were the key drivers of bearish trend in Pakistan’s market.

A host of financial results were released during the trading session, but they failed to turn direction of the market. The index, following a brief open in the positive, crawled downwards. Despite some short spikes, it continued its march towards south.

At close, the benchmark KSE-100 index recorded a decrease of 366.17 points, or 0.80%, to settle at 45,362.58 points.

Arif Habib Limited, in its report, stated that the market witnessed the continuation of selling pressure on the conventional top-tier stocks and also saw pressure on the rollover heavy stocks (TRG Pakistan and NetSol).

Similarly, National Refinery endured significant selling, which brought the stock to its lower circuit several times, followed by its recovery, the report said.

During the session, the KSE-100 index registered initial gains of 159 points, after which it went down by 523 points, eroding all the gains.

The banking sector saw an uptick in HBL, MCB Bank and The Bank of Punjab. On the other hand, cement sector stocks recorded nominal price gains.

Sectors contributing to the performance included exploration and production (-48 points), fertiliser (-46 points), textile (-41 points), power (-38 points) and oil and gas marketing (-35 points).

Individually, stocks that contributed positively to the index included HBL (+30 points), Meezan Bank (+27 points), Lucky Cement (+24 points), MCB (+14 points) and Mari Petroleum (+11 points).

Stocks that contributed negatively were Oil and Gas Development Company (-32 points), Engro Corporation (-26 points), Pakistan State Oil (-24 points), National Bank of Pakistan (-23 points) and Hubco (-22 points).

JS Global analyst Maaz Mulla said the market slid to an intra-day low of -523 points after touching intra-day high of +159 points in the initial hours of trading. It closed the trading session at 45,363, down 366 points.

The sell-off was attributed to the ongoing futures rollover week and the FATF meeting, he added.

Byco Petroleum (-3.6%), TRG Pakistan (-0.7%), WorldCall Telecom (-6.1%), Hum Network (-5.1%) and Media Times (-9.6%) were the volume leaders, contributing 202 million shares to the aggregate volume.

From the power sector, Pakgen Power (-0.2%) declared its CY20 result, where it put earnings per share (EPS) at Rs11.86 while Lalpir Power (-0.2%) reported EPS of Rs9.35 for 2020. Both companies declared final cash dividend of Re1 per share.

In the exploration and production sector, Oil and Gas Development Company (-2%) declared its 1HFY21 result, posting EPS of Rs9.82 and cash payout of Rs1.60 per share.

Pakistan Petroleum (-1.3%) and Pakistan Oilfields (-0.7%) from the same sector faced selling pressure and both closed in the red.

Mixed investor sentiment kept the banking sector volatile as HBL (+1.5%) and Meezan Bank (+3.2%) closed in the green whereas UBL (-0.4%) remained in the red.

NBP (-5.1%) lost value as it declared its CY20 result, where the bank posted EPS of Rs14.36 with no cash payout.

“Going forward, we expect the market to maintain a similar trend,” the analyst said. “We recommend investors to avail any downside as a buying opportunity in steel, cement and refinery sectors.”

Overall trading volumes plunged to 557.5 million shares compared with Tuesday’s tally of 718.2 million. The value of shares traded during the day was Rs26.2 billion.

Shares of 420 companies were traded. At the end of the day, 80 stocks closed higher, 322 declined and 18 remained unchanged.

Byco Petroleum was the volume leader with 84.4 million shares, losing Rs0.38 to close at Rs10.04. It was followed by TRG Pakistan with 47.5 million shares, losing Rs0.94 to close at Rs137.3 and WorldCall Telecom with 27.3 million shares, losing Rs0.1 to close at Rs1.54.

Foreign institutional investors were net buyers of Rs588.5 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.