Daily Times

KARACHI: Pakistan equities closed in negative on Wednesday after losses suffered by major businesses. The benchmark KSE-100 Index settled at 42,919 points, down by 375 points.

The market started off on a positive note, climbing 329 points, as investors’ interest jumped on news that Pakistan has been given a three-month reprieve by a global watchdog in a US-led motion to put the country on a terror-financing watch list. Moreover, EU extended GSP+ scheme for two years, which would be beneficial for exports and the external account. However, there was downwards’ pressure due to political uncertainty and weak corporate earnings, which led the market to make a low of 461 points. Early gains, however, were all wiped with index heavy financials coming under heavy selling pressure from institutions after United Bank Limited (UBL) in its detailed accounts, said it may face a similar issue as Habib Bank Limited (HBL) faced in its New York operations.

The stock also took a beating on disclosures related to ongoing pensions case. Engro Corporation (ENGRO) received a battering and it was the third biggest loser on KSE100 Index after the company announced lower than expected payout, while its earnings also fell below estimates.

Other heavyweights including Oil and Gas Development Company (OGDC) lost 1.9 percent, Pakistan State Oil (PSO) lost 2.2 percent, Lucky Cements (LUCK) lost 1.5 percent, and Maple Leaf Cements (MLCF) lost 4.5 percent.

Ali Raza of Elixir Securities expects stocks to remain under pressure and trade volatile in the near term with investors sitting tight and flows guiding market direction.

Major heavyweights, namely OGDC (-1.89%), UBL (-3.98%), HBL (-1.75%), PPL (-0.82%), MCB (-1.83%), ENGRO (-2.73%), LUCK (-1.48%), and HUBC (-1.04%), cumulatively contributed -317 points.

Trading volumes lifted by 11 percent on day-on-day (DoD) basis to 188 million shares, while value traded increased to $77 million. Top volume stocks were ANL (-5.22%), LOTCHEM (+1.38%), TRG (+1.35%), and DSL (+3.18%). Banks once again led the decline, where UBL (-3.98%), HBL (-1.75%), MCB (-1.83%), and ABL (-1.19%) closed in the red, where ABL announced its 2017 year end result (consolidated EPS of Rs11.29 and DPS of Rs1.75.SHEL (-1.28%), NRL (-0.52%) and PSO (-2.17%) came under pressure as news came in that the senate body has threatened to send ‘erring’ OMCs cases to the National Accountability Bureau (NAB). JS Research’s analyst Danish Ladhani expects market to remain under pressure due to the rollover week.

Published in Daily Times, February  22^nd 2018.