Market reluctant to stage a comeback, resistance around 40,000 points

After maintaining a volatile trend throughout the day, the Benchmark KSE-100-Share Index closed at 39,991.79 points on Tuesday, down0.08 per cent from the previous day’s session.

Major trading was witnessed in the shares of Karachi Electric Limited, owing to the company’s endorsement of Shanghai Electric Power Company Limited’s intention to acquire up to 66.40 per cent equity in the former.

A subsidiary of Abraaj Group and Pakistan’s largest power distribution company saw its share price gain 1.10 per cent on Tuesday. KEL stood out as the volume leader with a turnover of almost 70 million shares – its highest volume since August 11.

Besides KEL, the KSE‐100 Share Index moved at snail’s pace throughout the day. In line with regional trend, the bourse started the session amid modest gains. However, the index retraced intraday gains and traded within a narrow range throughout the day. Towards the end, the equity market closed down 31.23 points to finish below 40,000 once again.

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Despite a turnover of 70 million from KEL and 17 million from The Resource Group Pakistan Limited, together accounting for more than 50 per cent of the total volume, market participation came down to clock in at 160 million shares compared to182 million shares in the previous session.

Deewan Group was the volume leader with Deewan Cement Limited, Deewan Salman Fiber Limited and Deewan Farooque Motors Limited earning 2.87 per cent, 8.73 per cent, and 4.04 per cent gains respectively, standing out among the top six volume leaders for the session.

Overnight decline in the prices of crude oil kept the Oil & Gas sector in check.  Oil and Gas Development Company (+0.21 per cent), Pakistan Petroleum Limited (+0.11 per cent), Attock Refinery Limited (‐1.35%), National Refinery Limited (‐0.27%), Hascol Petroleum Limited (‐0.77%) and Pakistan State Oil (‐0.17%) in particular gave muted performance during the day.

Fertilizers, Cements and Banks remained mixed amid weak sector outlook and dearth of positive triggers. Autos staged a comeback on the back of weaker Yen (102.34); in particular Honda Atlas Cars Limited with 5 per cent gains outperformed its peers. The rally came amid market noise of the completion of the pre‐booking of the upcoming new Civic model for the calendar year 2016.

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The daily traded value for the KSE‐100 Index stood at $71.4 million compared to $76.4 million the previous day.

In total 424 million stocks worth Rs13.2 billion were traded on Tuesday. The share price of 186 stocks went up, that of 200 depreciated and that of 19 remained unchanged.

The Pakistan Stock Exchange’s market capitalization stood at Rs8.03 trillion ($76.6 billion) at the end of the day.

Political instability may cause volatility but bourse likely to meet 41,500 target by year end, report

The Pakistan Stock exchanges has seen limited price upside for most of the major sectors since February. However, specialists maintain the 45,000 June 2017 target (41,500 by Dec 2016) where most of the upside would come from valuation rerating in the index heavy weights backed by reclassification to Emerging Markets.

Nevertheless, investors at Pakistan Stock Exchange are showing mixed sentiments with confusion dominating the overall behavior owing to the speculated reigniting of street politics, said a report by Insight Securities Private Limited.

The political canvas for the PML-N Government has blurred to some extent due to the accountability movement of Imran Khan and the Qisas movement of Tahir-ul-Qadri. Market analysts also believe that the role of military/Govt. post MQM Chief’s anti-state slogans has fueled many conspiracy theories.

The report also said that major risks to the political system cannot be seen as Army is expected to keep a control of matters outside government corridor.

Overall, the KSE-100-share index’s bull-run in 2016 will see resistance;nevertheless, the market is expected to flourish as per the street consensus.

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