Karachi: Pakistan stock market’s winning streak extended into the first three days of the outgoing week. Yet the gains were wiped off by the last two-day’s collective loss of 597 points, which left the index flat with minor addition of 37 points (0.1 percent) to close at 42,750 points.
Market gurus consented that the developments on the political front were at the heart of the index pullback. Investors were spooked by the Lahore High Court’s order to make the Model Town incident inquiry report public, coupled with bailable warrant by the accountability court for arrest of Finance Minister Ishaq Dar.
Analysts at Arif Habib Securities said the news that cushioned the market were current account deficit contracting 73% month-on-month in August; power generation widening by 19% year-on-year in August; large-scale manufacturing moving up by 13% in July and an upsurge in international urea prices to $252 per tonne from $240 a week earlier.
The average volume rose 9% to 171 million shares with the traded value up by 3% to $85m. The volume leaders were WTL, TRG, DSL, EPCL and KEL, which together captured 29% of average volumes.
Sector-wise negative contributors to the index were made by banks 100 points, which was hit by a loss of 153 points on HBL ratings by Moody’s. MCB erased 70 points.
Cement sector also scrapped 91 points with LUCKY down. Refineries were up 4% week-on-week led by NRL up 5% and ATRL 6%. Positive contributions came from fertilisers 148 points; gainers being Dawood Hercules 72 points and FFC 59 points.
Foreign investors remained on the sidelines with net buying of only $0.4m, sharply down from $27.7m inflow last week. Foreign inflows were concentrated in fertiliser $4.8m in line with the global rally sparked by higher prices, followed by OMCs $1.7m and cement $1.6m, while foreigners sold $4.2m worth of E and P’s followed by power $1.4m.
Among local participants, during the outgoing week insurance companies loaded up $4.2m worth of Pakistan equities, while Mutual Funds offloaded $4.5m and brokers sold off $3.3m worth of shares.
Accordingly to Topline Securities, top index point contributions came from DAWH, which was up 9% week-on-week, MCB 4%, FFC 6%, Nestle 4% and UBL 4%, adding 298 points.
OUTLOOK: The KSE-100 index is currently trading at a cheaper price-to-earnings multiple of 9.2 times compared to Asia Pacific regional average of 14 times and offering a dividend yield at 5.4pc over twice the offer of 2.4pc by the region.
But Arif Habib Ltd expects the market to remain range-bound in the upcoming week given the end of result season, rollover week and disturbances on the political front.
With the result season nearing its end, future rollover week round the corner and lack of any positive triggers, the brokerage expected the market to remain lacklustre in the upcoming week.
