Market Daily: KSE-100 flat WoW amid profit-taking

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LAHORE: Pakistan Stock Exchange (PSX) started the week on an enthusiastic note where index gained 1.8 per cent in the first session, which was a succession of post-election rally. However, after gaining 3,000 points in four consecutive sessions in an election frenzy, investors later resorted to profit-taking.

US Secretary of State Mike Pompeo’s warning that Pakistan should not use IMF bailout fund for any Chinese debt repayment dented investors’ confidence to some extent. To add insult to the injury, poor earnings announcement by Pakistan’s two, Habib Bank Limited and United Bank Limited, of top five banks having a cumulative market capitalisation of $3.5 billion further spoiled the market’s sentiments.

Pakistan State Oil (PSO) went up by 4.3 per cent during the week as the market is expecting resolution of circular debt, of which PSO would be the prime beneficiary. Further, power sector added 62.4 points over the week as they will also benefit from the same.

During the week, foreigners remained net sellers to the tune of $14.6 million as against net selling of $0.4 million seen during the same period last week. On the local front, individuals were net buyers amounting to $26.4 million while mutual funds were net sellers amounting to $7.1 million.

Major gains to the KSE-100 index came from consumer staples (+1.74 per cent), consumer discretionary (+0.74 per cent) and energy (+0.41 per cent) amid gains in PAKT (+3.32 per cent), NML (+2.4 per cent), PSO (+2.16 per cent) and OGDC (+0.66 per cent). Additional support came from ENGRO (+2.17 per cent), FFC (+2.93 per cent), EFERT (2.92 per cent), MCB (+1.40 per cent) and NBP (+3.40 per cent) amid better prospects in days to come.

In related news, the status of Summit Bank Limited (SMBL) as a settling bank has been declared as terminated by National Clearing Company of Pakistan Limited (NCCPL) with effect from August 17.

For the outgoing week, the KSE-100 index lost 281.4 points (-0.66 per cent) with the main contribution to downside coming from HBL (-9.80 per cent), UBL (-11.18 per cent) and MCB (-4.46 per cent) taking away 568 points. On the flip side, DAWH (+10.58 per cent), PAKT (+11.46 per cent) and HUBC (+3.42 per cent) added 194 points.

Market participation for the KSE-100 index declined to 114.14 million shares from 170.12 million in the previous session (-32.91 per cent). Major contribution to total market volume came from EPCL (-0.96 per cent), DSIL (-18.15 per cent) and UNITY (+4.54 per cent) churning 56.57 million shares out of the All Share volume of 203.03 million shares.

Daily traded value for the KSE-100 index declined to $61.91 million from $73.30 million in the previous session (-15.54 per cent); EPCL ($ 7.17 million), HBL ($ 6.54 million) and ENGRO ($ 4.27 million) were among top contributors from a traded value perspective. Major contribution to the KSE-100 index upside came from ENGRO (+2.17 per cent), FFC (+2.93 per cent), EFERT (+2.92 per cent), MCB (+1.40 per cent) and PSO (+2.16 per cent) adding 161 points. On the flip side, HBL (-3.13 per cent), LUCK (-0.86 per cent) and PIBTL (-4.44 per cent) took away 104 points. The KSE-100 index is 13 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 KSE-100 index managed to recover off its intraday low (42,097) amid thin participation and closed on a buoyant note. Immediate support is at 42,053 (50EMA) and the rising trend line (42,000), meanwhile next resistance is 43,096 (intra-week high).