Daily Times

KARACHI: Trading activity at local bourse in outgoing week progressed in correction mode amid mixed sentiments where Karachi Stock Exchange (KSE-100) index slid by meager 0.4 percent, shedding 172 points to close at 41,291 points.

The benchmark index depicted a meager correction during the outgoing week as index heavyweight’s i.e. Oil and Banks gained the most while on the other hand cement stocks slumped owing to upsurge in coal prices. KSE-100 is currently trading at a CY16 PE of 9.4x; a 32% discount to MSCI-EM.

Ana analyst at Elixir Securities said banks gained traction on result euphoria amidst value hunting, where United Bank Limited (UBL) and Habib Bank Limited (HBL) contributed 54.1 points to KSE-100. On the other hand, oil sector continued its rally trekking international l oil prices, up 2.5 percent, while major contributors were Oil Nag Gas Development Company (OGDC) which gained 38.7 points and Pakistan Petroleum Limited added 33 points. “Upcoming results are likely to guide momentum along with the direction of commodity prices”.

Cement sector cumulatively declined by 4.4 percent on account of surging international coal prices, where Richard bay coal contracts reached $ 90/tone. Lucky Cement and DG Khan Cement dragged the benchmark index collectively by 126.2 points.

Average daily volume augmented by 17 percent Week on Week (WoW) to 472 million primarily on the back of low base (Ashura Holidays in the previous week) where second and third tier stocks topped the volumes charts. Bank of Punjab continue to be the preferred pick for market participants where it solely contributed 14 percent or 289 million of total trading activity followed by TRG which contributed by 119 million and PACE with 82 million.

Faizan Ahmed of JS Research said overall sentiments remained mixed at the bourse with market struggling to break 42000 levels.

In the mainstream sectors, most of the interest remained tilted towards Oil and Marketing Companies (OMCs), up by 2.6 percent WoW on account of better than expected first quarter Fiscal Year 2106-17 (FY17) result announcements, textiles gained 3.4 percent WoW on murmurs of favorable exports package and Exploration and Production (E&Ps) added 1.1 percent on rebounding international oil prices, said Ahmed.

On the other hand, sectors such as cements (-4.4 percent WoW), and fertilizers (-1.3 percent WoW) witnessed profit taking. “Improvement in activity was observed as both avg. traded value and volume improved by 6 percent and 17 percent respectively during the week”, said Ahmed.

Most of this increase in activity can be attributed to local AMCs where reported injection by a major pension fund incited broad based buying in the market, he added.