Market Daily: PSX closes green as the KSE 100 settles at 43,507.50

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LAHORE: As Moscow dresses up ahead of the upcoming football extravaganza, more and more fans head into the country for the World Cup that begins tomorrow. While millions of football lovers will be cheering on their favourite teams, Pakistanis will have a special reason to be involved. No, not only because of Pakistan’s famous footballs but also as sports betting takes centre stage during such mega events (in particular Cricket and Soccer). While there is no solid data on the volume of sports betting activity in Pakistan, we have found a correlation between soccer world cups and decline in market activity. Based on a study of Traded Value and Volume during previous 3 World Cups (from 2006 – 2014), we have seen an average decline of ~30 per cent in average traded value during the event when compared with a 30d average traded value prior to the start of World Cup. In a nutshell, investors should be warned that financial markets tend to act like any emotional football fan during the matches – they go quiet and nervy.

Coming back to market activity today, the day ended on a positive note with the 100 Index closing up +278.60 points (+0.64 per cent) at 43,507.50. Market volume and turnover came down even further (-16.7 per cent and -3.9 per cent on d/d basis) amid mixed activity. Materials were in the limelight again (39.7 per cent of total turnover) followed by d/d jump in Financials (25.9 per cent of total turnover) and Energy (14.5 per cent of total turnover). Contribution to upside came from Health Care (+1.63 per cent), Energy (+0.63 per cent) and Consumer Discretionary (+0.40 per cent) amid buying frenzy in SEARL (+2.02 per cent), SHFA (+3.61 per cent), PSO (+2.84 per cent), OGDC (+0.79 per cent), POL (+0.87 per cent), HPL (+5 per cent) and NML (+1.01 per cent). Additional support to intraday gains came from FFC (+1.51 per cent), HBL (+0.69 per cent), BAHL (+1.42 per cent) and ISL (+4.39 per cent). On the political front, the Supreme Court of Pakistan ruled in Awami Muslim League leader Sheikh Ahmed Rashid’s favour in the misdeclaration of assets case against him.

Market participation for the 100 Index declined to 72.36mn shares (-16.7 per cent on d/d basis). A major contribution to total market volume came from BOP (+2.26 per cent), MEBL (+5 per cent) and KEL (-1.94 per cent) churning 24.85mn shares out of the All Share volume of 111.89mn shares. Daily traded value for the 100 Index remained flattish at USD 39.90mn from USD 41.50mn in the previous session (-3.90 per cent on d/d basis); MEBL (USD 5.86mn), DGKC (USD 5.06mn) and ENGRO (USD 3.48mn) were among top contributors from the traded value perspective. Major contribution to the 100 Index upside came from PSO (+2.84 per cent), FFC (+1.51 per cent), HBL (+0.69 per cent), OGDC (+0.79 per cent) and BAHL (+1.42 per cent) adding 100 points. On the flip side, COLG (-5 per cent) and HUBC (-0.72 per cent) took away 27 points. The 100 index is 16 per cent above its 52-week low of 37,736.73 reached on December 12, 2017, and 10 per cent below its 52-week high of 48,601.75 touched on June 14, 2017.

Technically speaking, the 100 Index staged a mini-reversal and closed above 20EMA (43,325) but well below other EMAs (200 and 50), 38.2 per cent retracement and falling trend line resistance. A snowball effect can take out rising trend line support (43k) and the 100 Index may revisit intraday low from 18th May (41,458).

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