PSX Index trades under pressure ahead of MSCI review announcement

Author: Staff Report

Benchmark KSE-100 Index traded under pressure Monday due to lack of triggers as Ministry of Finance discusses bailout package with IMF Officials in Islamabad. The market closed on a negative note, as the benchmark KSE-100 index shed 292 points, decreasing by 0.7 percent from the previous trading session.

The index opened on a positive note, continuing on an upward trajectory, making a high of +183 points; however, it slid in the second half of the trading session to close at 41,096 points level.

Rounds of selling estimates kept investors at bay in index heavy blue chips as MSCI Semi Annual Review announcement is due on 13th November.

An analyst at Elixir Research Muratza Jafar expects Lucky Cement Limited to be downgraded from MSCI Emerging Market Index to Small Cap Index while United Bank Limited remains a borderline case. Both the stocks remained under pressure throughout the day, and accounted for a decline of 90 points in KSE100 Index, as investors preferred to reduce allocations ahead of review announcement.

Elixir Research estimates sell-off of 7 million shares from LUCK and 25 million shares from UBL by Foreign Passive Funds in the event they are downgraded from the Standard EM Index.

“We expect the market to find support around 40,500-40,700 levels as details from Bailout Package emerge out of the ongoing talks with IMF”, added Jafar.

On the economic front, Pakistan is to receive $1 billion dollars from Saudi Arabia in a day or two out of the total $3 billion it committed to support the country’s balance of payment, said by Finance minister Asad Umar. Moreover overseas Pakistani workers remitted $7,419.98 million in the first four months (July to October) of FY19, compared with $6,444.46 billion received during the same period in the preceding year.

Cement sector remained under the hammering belt, where big players such as LUCK (-3.70%), MLCF (-2.40%), CHCC (-3.63%), PIOC (-3.01%) and DGKC (-2.70%) closed in the red zone.

Mixed sentiments were witnessed in the banking space where MCB (+0.81%) and NBP (+0.68%) closed in the green whereas HBL (-0.86%) and UBL (-2.16%) closed in the red belt.

An equity analyst Maaz Mulla expects the market to depict a similar trend, therefore, he recommend investors to see any downside in the market as an opportunity to buy in cement, consumer and banking sector.

Published in Daily Times, November 13^th 2018.