Market Daily: Post Budget bearish trend continues

LAHORE: Pakistan equities continued its Post-Budget bearish trajectory, as investors’ raised eyebrows on neglected proposals of the budget such as the GIDC reduction/removal, CGT reduction, and tax on dividend income. Resultantly, investors’ remained sidelined and adopted a “wait and see” approach. The benchmark index lost 292 points during Wednesday’s session, closing at 45,197 index level. This led to a sharp decline of 47 per cent in traded volumes during the trading session. Similarly, trading value also fell by 40 per cent.

The market remained under pressure amid suppress volumes. Equity market specific relief measures provided in the budget have failed to impact the market positively given uncertain political and economic environment. Rumour mills are in full motion regarding the upcoming elections that have suppressed market sentiments. Furthermore, Finance Minister Miftah Ismail admitting to a possible IMF bailout places fresh question-mark on the currency outlook.

Volumes remains confided to 2nd and 3rd tier stocks with LOTCHEM, BOP, BAFL and UNITY leading the volume chart. The near-term market would look for an MSCI review (due this month) while in the long run would depend on clarity on the political and economic front.

Lotte chemicals continued to register positive streak with traded volume of 15 million shares, gaining 11 per cent in last three sessions. This is due to a positive company outlook as gross profit margins are turning around amid favourable PTA-PX spread.

Among sectors, commercial banks remained top laggard and eroded 90 points from index followed by tobacco 28 points and OMCs 28 points.

Meanwhile, top five scrips including HBL (-1.9 per cent), UBL (-2 per cent), PAKT (-4.7 per cent), OGDC (-1 per cent) and LUCK (-0.7 per cent) contributed 165 points to the index’s decline whereas stocks including BAHL (+1.5 per cent), COLG (+5 per cent), EFERT (+1 per cent), MARI (+0.8 per cent) and CHCC (+1.7 per cent)  added 48 points to the index gains.

Meanwhile, Pakistan’s April Consumer Price index (CPI) clocked in at 3.68 per cent, as per the data released by Pakistan Bureau of Statistics (PBS).

BYCO Petroleum announced its financial results for 3QFY18, where company notified earnings of Rs0.5 per share, against a loss of Rs0.12 per share last year primarily on the back of higher revenues (Rs108 billion, +73 per cent YoY) and advanced gross margins of 6 per cent, up by 4 percentage points YoY.

Moreover, Oil and Gas Regulatory Authority (OGRA), in the annual development plan for the year 2018-19, has proposed to grant 33 licenses to promote LPG sector and ensure smooth supply of the commodity in far-flung areas, especially during peak winter season.

The revenue collection has posted a growth of 16 per cent in the first ten months of the current fiscal year. In absolute terms, revenue collection reached Rs2,922 billion during the July-April FY18 as against Rs2,513 billion over the corresponding months of the last fiscal year.

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