Market watch: Foreigners buy, but index goes south

Benchmark KSE-100 index falls 132.82 points

Our Correspondent September 28, 2015
Benchmark KSE-100 index falls 132.82 points.

KARACHI: Ignoring the Eurobond issue that saw Pakistan raise $500 million, investors continued to tread with caution as the benchmark-100 index declined further on the opening day of the week.

Despite the market re-opening after Eid holidays, reaction remained subdued as turnover remained on the lower side.

Falling crude oil prices did not help matters with the index, despite a positive open, failed to find momentum and further went south in the last hour.

At close on Monday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.40% or 132.82 points to end at 32,690.02.

JS Global analyst Ahmed Saeed Khan said volatility persisted as the market remained devoid of any positive trigger. “The index remained strong during the first half but took a nosedive in the latter half,” said Khan. “Initial interest was seen in the cement sector but cherry picking and profit taking was witnessed, keeping only Maple Leaf Cement Factory (+0.7%) marginally positive.

“Major scripts such as Lucky Cement and DG Khan Cement Company closed 0.2% and 1.3% lower, respectively. On the back of better than anticipated published results, large auto manufacturers remained positive, where top gainers of the sector were Hino Motors (+5.0%) and Ghandhara Nissan Limited (+5.0%).

“As international crude continued to plummet, currently trading close to $48 per barrel, the Exploration & Production (E&P) sector, with a slight initial rally, witnessed pressure, where major laggards were National Refinery Limited (-0.8%), Attock Refinery Limited (-1.0%) and Attock Petroleum Limited (-1.9%).”

“We expect the market to remain under pressure. Investors are recommended to stick to high dividend yield and fundamentally strong scripts.”

Meanwhile, Elixir Securities analyst Faisal Bilwani said turnover on benchmark KSE-100 index set a new 18-week low.

“Stocks opened sideways and traded mixed throughout the day as investors continued to remain cautious, while news flow regarding the launch of Eurobond issue over the holidays failed to cheer participants.

“Activity in the wider market remained dull, however, sector-specific interest was evident in pharmaceutical which continued their ascent and ended higher on earnings excitement. However, late selling in index names pulled the market down to test 32,650 level, with index heavy Fauji Fertilizer Company  (-2.42%) and Oil and Gas Development Authority (-0.62%) doing the most damage with mid-day slide in global crude.

“Anxious investors will continue to monitor institutional flows. Any reports of selling by local capital protected funds or foreign funds can likely trigger panic with index taking support at 32,000 level.”

Trade volumes fell to 111 million shares compared with Wednesday’s tally of 130 million shares.

Shares of 348 companies were traded on Monday. At the end of the day, 96 stocks closed higher, 226 declined while 26 remained unchanged. The value of shares traded during the day was Rs4.7 billion.

Byco Petroleum Pakistan was the volume leader with 14.2 million shares, losing Rs1.01 to finish at Rs25.51. It was followed by K-Electric with 12.2 million shares, losing Rs0.10 to close at Rs7.01 and TRG Pakistan with 6.2 million shares, losing Rs1.30 to close at Rs30.66.

Foreign institutional investors were net buyers of Rs11 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 29th, 2015.

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