Daily Times

KARACHI: Bears staged comeback at the Pakistan Stock Exchange in the backdrop of growing political uncertainty and institutional profit taking. The benchmark KSE 100 index after sharp gains on Thursday lost 254.52 points to settle down at 41291.43 level on the last day of trading week.

Concerns for surging current account deficit to $1.37 billion for July-September 2016, rising coal prices, overnight fall in global crude prices invited pressure in cement, oil sectors. Political uncertainty, subdued auto sales data for Sep’16 and foreign outflows at PSX played a catalyst role in the bearish close, said senior analyst Ahsan Mehnti.

Trading activity was largely concentrated in second and third tier stocks that dominated volumes chart while activity in blue chip sectors remained subpar on limited institutional interest. Notable index names such as United Bank, Pakistan Petroleum, MCB Bank, Hub Power, DG Khan Cement, Engro Corp. and Lucky all closed in red and cumulatively dented KSE100 index by over 100 points, said Ali Raza, equity analyst at Elixir Securities.

Overall, volumes decreased to 529 million shares from 561 million shares while value declined value dropped to Rs 16 billion from previous day’s Rs18.6 billion/$17.8 million.

TRG Pakistan jumped up to the position of top volume leader with 58 million shares while Bank of Punjab’s 54 million shares changed hands. Other top performers were Dost Steel (37 million), Pace Pakistan (23 million), Japan Power (23 million), PIAC (17 million), and Telecard Limited (15 million).

Shares of 438 companies were traded at the bourse out of which the value of 169 companies’ shares registered increase while those of 258 registered decline. However, 11 companies share price remained unchanged

Result announcement: ABL announced 3Q2016 consolidated earnings of Rs 3.7bn (EPS Rs3.2), down 18 percent YoY. The bank also announced interim cash dividend of Rs 2 per share in addition to Rs3.5 per share already paid by the bank. The results remained lower than market expectations. Net Interest Income (NII) of ABL was down 12 percent YoY to Rs 8.2 billion due to maturity of high yielding Pakistan Investment Bonds (PIBs) in 3Q2016 and its reinvestment at lower yields. These PIBs were booked at around 12-13 per cent and now they are reinvested at lower rates to the tune of 6-7 percent. Non-interest income of ABL was also down by 9 percent to Rs 2 billion in 3Q2016 that kept bottom-line in pressure.

Packages Limited also announced 3Q2016 consolidated earnings (attributable to equity holders) of Rs 1 billion (EPS Rs11.2) against Rs 897 million (EPS Rs10) in the same quarter last year. The result was in line with market expectations. Revenue posted growth of 10 percent YoY to reach Rs 6.1 billion. This is likely due to continued volumetric growth in consumer and packaging divisions. Gross profit margins increased by 123 bps to 21.8 percent in 3Q2016. Growth in gross profit margins is positive and is likely due to better fuel mix and continued production efficiencies

Market players expect that the market will consolidate and trade in the range of 300-400 points at current levels. Politics will remain a dampener in near-term however earnings and payout related excitement will keep investors’ interest in select stocks alive as ongoing quarterly results season comes into full swing from next week.