Market Daily: PSX topples below 43,000 mark

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LAHORE: Murphy’s Law is an epigram that is typically stated as: “Anything that can go wrong will go wrong”. Just when it was thought that Pakistan was out of the woods on FATF, after member states failed to reach consensus on placing Pakistan on the global list of countries that finance terrorism, disappointments from earnings announcements and concerns on CAD/ fiscal deficit along with concerns emanating from recent disclosure from UBL (-3.98 per cent) took its toll on market sentiment.

Meanwhile, the European Union (EU) decided to retain Pakistan’s Generalised System of Preferences (GSP) Plus status.

The stock market opened the day positive and the KSE 100 index gathered 328.64 points to touch 43,623.59 before it flushed all those and a further 460.74 points to reach intraday low of 42,834.21. The KMI 30 index which appreciated 738.58 points early lost 670.96 points during the session before ending down 574.63 points. The KSE All Share Index closed lower by 162.66 points. The advancers to decliners ratio stood at 154 to 177.

The market volumes were recorded at 187.88 million with Azgard Nine Limited (ANL -5.22 per cent) in the lead 15.27 million. The commercial bank sector trimmed 1.45 per cent off its market capitalization while the oil and gas exploration was down 1.24 per cent. The cement sector also saw its cumulative market capitalisation depreciate by 1.10 per cent.

Top 10 Index point decliners included UBL (-4 per cent), HBL (-1.8 per cent), ENGRO (-2.7 per cent), OGDC (-1.9 per cent), MCB (-1.8 per cent), LUCK (-1.5 per cent), PSO (-2.2 per cent), MLCF (-4.5 per cent), PPL (-0.8 per cent) and HUBC (-1 per cent); withholding 353 points.

Sector-wise data shows, Commercial Banks withheld 182 points from the index, Oil and Gas Exploration (E&P) withheld 59 points whereas Cement Sector eroded 49 points from the index.

Pakistan State Oil Company Limited (PSO -2.17 per cent) declared financials for the second quarter of the financial year 2018. Company sales expanded by 19 per cent YoY and 0.41 per cent QoQ as prices of petroleum products increased. Higher operating costs pulled down after taxation profit by a massive 31 per cent QoQ and earnings per share came to Rs 10.71 compared to Rs 18.51 in the previous quarter and Rs 20.75 in the same period last year.

Engro Corporation Limited (ENGRO -2.73 per cent) came out with earnings per share of Rs 21.76 for the financial year 2017.

Nestle Pakistan (NESTLE) announced its 4Q2017 result where the company reported revenues of Rs 29.8 billion, up 6 per cent YoY. Gross margins grew considerably by 4 ppts to 36 per cent that led to 63 per cent YoY growth in net earnings (EPS Rs 73). Along with the result, the company also announced a cash dividend of Rs 80 per share (interim dividend Rs 240 per share).

Pioneer Cement (PIOC) announced its 2QFY18 earnings of Rs 320 million (EPS Rs1.4 per share), down 60 per cent YoY mainly owing to 12 ppts decline in gross margins to 27 per cent. Revenues of the company shrank by 8 per cent YoY to Rs 2.5 billion.

Allied Bank (ABL) announced 2017 earnings of Rs 11.3, down 12 per cent YoY and in line with market estimates. Net Interest Income (NII) of the bank was down by 5 per cent during 2017 due to lower Net Interest Margins (NIMs) during the year. Capital gains also dropped to Rs 653 million in 2017 against Rs 2.7 billion in 2016. In 4Q2017, earnings increased by 31 per cent to Rs2.7 per share YoY. Along with the financial result, bank announced a final cash dividend of Rs 1.75 per share in addition to interim dividend of Rs 5.25 per share.

Pakistan Oilfields (POL) has notified that the company has challenged the imposition of windfall levy on oil through a petition on February 19, 2018. After hearing the petitioners on February 20, 2018, Islamabad High Court (IHC) has directed the parties to maintain the status quo in this respect. The case is adjourned for March 15, 2018.

Meanwhile, Hum Network (HUMNL) through a notice at PSX has informed that the company is venturing into an online grocery business, to be operated through a separate private limited company, to be named Hum Mart (Private) Limited.

Technically speaking, market bears pushed the KSE 100 index down amid expanding turnover and gave its lowest closing since hitting its CY18 high on January 24. Hovering above support from 50EMA (42,808) and 20WEMA (42,636) a breach below could see the KSE 100 index testing 20 Month EMA (42,134).