Market Daily: KSE-100 closes in red after a shaky session

LAHORE: The Pakistan Stock Exchange (PSX) witnessed another jittery session on Thursday. The indices, after a decent beginning to the session, went downhill and closed in red! Bulls lost to the bears for one more session.

Following Wednesday’s range bound market activity, the 100 Index extended its slide amid disappointing earnings announcements from HBL (-5 per cent) and UBL (-4.51 per cent). The day started on a positive note and after testing its immediate resistance (200EMA) the 100 Index traded lower amid a dearth of immediate triggers. Market participation expanded on d/d basis (Volume and Value shot up +37.57 per cent and +14.06 per cent respectively) due to heavy change of hands in EPCL (+0.99 per cent), DGKC (-1.32 per cent) and UBL (-4.51 per cent). EPCL came into the limelight following its earnings announcement for 2QCY18 and an unexpected payout. Materials (34.91 per cent of total turnover) saw maximum turnover followed by Financials (19.14 per cent of total turnover) and Industrials (13.78 per cent of total turnover). Investor interest remained skewed towards EPCL (11.34 per cent of total turnover), DGKC (8.2 per cent of total turnover), UBL (6.69 per cent of total turnover), NBP (4.4 per cent of total turnover), HBL (4.09 per cent of total turnover), PAEL (6.28 per cent of total turnover) and TRG (5.11 per cent of total turnover). The day however ended in red with the 100 Index closing down 479.72points (-1.12 per cent) to close at 42,330.32.

Major drag to the 100 Index came from Financials (-2.33 per cent), Consumer Staples (-1.65 per cent), Materials (-1.09 per cent) and Energy (-1.06 per cent) amid selling pressure in HBL (-5 per cent), UBL (-4.51 per cent), MCB (-1.86 per cent), HMB (-2.96 per cent), PAKT (-5 per cent), COLG (-3.78 per cent), LUCK (-3 per cent), ENGRO (-1.43 per cent), EFERT (-1.17 per cent), PPL (-1.81 per cent), POL (-0.98 per cent) and OGDC (-0.58 per cent). In related news, UBL posted consolidated NPAT of PKR 3,409mn (EPS: PKR 2.78) in 2QCY18, down 40 per cent YoY. This result was significantly below our expected NPAT of PKR 5,381mn (EPS: PKR 4.40). The sharp miss in 2QCY18 was due to (i) higher than expected loan provisions of PKR 1,714mn, (ii) unexpected impairment of PKR 657mn, (iii) a surprise additional PKR 2bn charge pertaining to the pension fund and (iv) higher than expected admin expenses. HBL posted consolidated NPAT of PKR 3,360mn (EPS: PKR 2.29) in 2QCY18, lower by a sharp 48 per cent YoY. This was significantly lower than our expected NPAT of PKR 5,428mn (EPS: PKR 3.70) due to (i) lower than expected NII, (ii) lower than expected profit from associates, (iii) higher than expected admin expenses (possible additional charge on the pension fund similar to UBL) and (iv) a high effective tax rate of 49 per cent vs. our expectation of 42 per cent.

Market participation for the 100 Index increased to 170.12mn shares from 123.66mn in the previous session (+37.57 per cent on d/d basis). The major contribution to total market volume came from EPCL (+0.99 per cent), UNITY (+3.65 per cent) and PIBTL (+2.27 per cent) churning 61.69mn shares out of the All Share volume of 284.48mn shares. Daily traded value for the 100 Index increased to USD 73.30mn from USD 64.27mn in the previous session (+14.06 per cent on d/d basis); EPCL (USD 8.53mn), DGKC (USD 6.17mn) and UBL (USD 5.03mn) were among top contributors from a traded value perspective. Major contribution to the 100 Index downside came from HBL (-5 per cent), UBL (-4.51 per cent), LUCK (-3.00 per cent), PPL (-1.81 per cent) and MCB (-1.86 per cent) taking away 333points. On the flip side, HUBC (+2.73 per cent), DAWH (+2.36 per cent) and KAPCO (+2.98 per cent) added 74points. The 100 index is 12 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 47,241.17 reached on August 4, 2017.

Technically speaking, the 100 Index met stiff resistance at 200EMA (42,983) and lost its foothold (42,550) amid the surge in market participation. Immediate support is at 42,034 (50EMA) and the falling trend line (41,850).