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Nestle added 1.96pc, ABOT 3.28pc and PKGS 1.31pc contributing 36 points to the index. From the sector
perspective real estate lost 3.42pc, industrials 2.9pc and utilities 2.33pc.
Published in Dawn, July 7th, 2017
ADB and the government have implemented the country partnership strategy for 2009-2013, a $4.4bn lending programme to
facilitate structural change, promote investment, and improve the countrys institutional effectiveness.
In next five years (2015-19) focus will be on overcoming energy crises, construction of small and medium dams to generate
electricity ranging from 100MW to 2,000MW.
Saleem asked the ADB to support and enhance its funding in key sectors of the economy including energy infrastructure,
education and health.
He emphasised the need to explore multi-donor financing for mega energy projects of Dasu and Diamer Basha dams. He further
stated that the governments vision of connecting Pakistan with Central and West Asia will be an integral part of the country
partnership strategy.
A $197m loan to upgrade a national highway in Balochistan was also signed between the government and the Asian lender.
The project will rehabilitate 79km of the two-lane highway in Zhob-Mughalkot (N50) and another 128km in Qila Saifullah
Waghum (N70).
Over the past decades, the ADB has supported the governments initiative for equitable provincial development, said Mr
Zhang. This project is a step toward boosting economic growth, regional integration, and reducing poverty while bringing
substantial social and economic development for the people of Balochistan.
Published in Dawn, May 13th, 2015
July 08, 2017
Market participation remained on the higher end with 235m shares traded against 10 days moving average of
219m shares and 78pc higher than last Fridays volume of 132m shares. Traded value also mounted 84pc to
Rs12.8 billion, from Rs7bn last trading session. Out of the 60 stocks which shed values only seven shares were
index components. BOP, TRG and SMBL contributed 49m shares to the aggregate volume of 235m shares.
The top 10 index point leaders, according to Topline Securities, were LUCK up 3.8pc, ENGRO 3.6pc, PPL
4.2pc, MCB 3.4pc, HBL 1.7pc, HUBC 2.5pc, SNGP 5pc, DGKC 3.8pc, PSO 3.6pc and NML 4.6pc, adding 502
points.
Steel saw interest as ISL hit upper circuit. The relief rally should extend across the next few days before the
feel-good factor is challenged towards the end of the week, as the next hearing date approaches, stated
Intermarket Securities.
Published in Dawn, July 11th, 2017
Updated July 11, 2017
Stock market takes 2,000-point nosedive on back of political
uncertainty
The Pakistan Stock Exchange (PSX) witnessed a bloodbath on Tuesday on the back of political uncertainty a
day after a joint investigation team (JIT) report on the ruling Sharif family's financial history was
submitted to the apex court, taking a 2,153-point nosedive as the day's trading commenced.
Within minutes of the market opening, the benchmark KSE-100 index had plunged over 1,300 points, going
from 46,273 at 9:30am to 44,969 by 9:35am a drop of nearly 2.83 per cent.
By around noon, the market had fallen deeper to 44,221 points, a drop of 4.43pc or 2,052 points. By close of
trading, the market's losses had swelled to 2,153 points (4.65pc). Total KSE-100 volumes clocked in at 104
million shares, worth Rs8.24 billion.
Both volumes and share value were markedly lower than the day earlier, when the market had risen 1,000
points on speculations that the JIT had found nothing incriminating against Prime Minister Nawaz Sharif.
Of the 368 symbols traded on Tuesday, only 24 advanced and 10 remained unchanged. The rest closed red.
Most of the top scrips traded closed at or near their lower locks the maximum 5pc (for stocks worth Rs20 or
more) or Re1 depreciation allowed in a stock's price before trading in it is halted for the day.
The index had witnessed a great deal of uncertainty in the days leading up to the submission of the JIT's
report.
On the first day of the fiscal year, the benchmark index took a 4pc plunge, shedding 1,900 points as political
uncertainty clouded the outcome of the JIT probe.
It was the first time the index had tanked over 4pc since in August 2015, when China depreciated the Yuan,
and before that in August 2014, during the Pakistan Tehreek-i-Insaf's sit-in in Islamabad.
Volumes were led by:
K-Electric Ltd: 17.4m shares traded (-5.71pc);
TRG Pak Ltd: 9.7m shares traded (-4.98pc);
Aisha Steel Mill: 9.3m shares traded (-4.97pc);
B.O.Punjab: 9.1m shares traded (-8.26pc);
Engro Polymer: 6.9m shares traded (-4.97pc).
Updated July 12, 2017
Doomsday at the stock exchange
Brokers monitor share prices at the Pakistan Stock Exchange on Tuesday. Investors disposed of thier shareholdings in
droves as opposition parties demanded the resignation of Prime Minister Nawaz Sharif following a damning
investigation into his family assets.Online
KARACHI: Stock investors were in for a rude awakening on Tuesday as the KSE-100 index took a plunge of
1,000 points even before the opening bell had died down.
As the investors stared at the trading board in disbelief, the market saw shares close at their lower circuits in
droves. It surely is not the day for the faint-hearted, murmured an old-timer who almost fell on the bench in
the trading hall.
By the close of trading, the benchmark index tanked 2,153 points, the biggest-ever single-day decline.
The 4.65 per cent decrease is the biggest decline in percentage terms since the last great fall on Feb 25, 2009.
The market has dipped 7.5 pc since January. This appears quite bearable, although the market has dropped
16.2pc from the index peak on May 24. On Tuesday, Rs403bn was wiped off the shareholders wealth.
Only a day earlier, the market seemed to have scored a relief rally with a gain of 1,052 points or 2.33pc. The
rally on Monday was led by mutual funds, which turned out to be massive sellers on Tuesday when
they disposed of stocks worth $11.6 million. Banks also jettisoned shares worth $11.1m. Other local
participants cherry-picked, including individuals who bought back stocks worth $3.15m to cover their Mon-
days oversold positions of $14.7m.
Foreign investors followed the old market maxim: Its time to buy when there is blood on the streets. They
bought stocks worth $11.49m, much of it being cherry-picking of heavyweights that had attained attractive
valuations following consistent bleeding since their peak on May 25.
According to a stockbroker, two of the three top asset management companies sold equities on Tuesday
ostensibly to either meet redemptions or secure their capital-protected funds. Several stockbrokers and
dealers conceded that retail investors who were dabbling in second- and third-tier low-priced stocks must
already be ruined as they would have suffered a loss of 30-40pc on their portfolios.
Pakistan Stock Exchange CEO Haroon Askari said he would not comment on day-to-day volatility of the
market. But he noted that the risk management systems were strong enough to handle the volatility. He
observed that there was no clearing house default and, although margins would be collected in the morning by
National Clearing Company (NCCPL), there were no indications of any default so far. The PSX collects
margins for three days around 15pc and any shortfall in mark-to-market is collected on a daily basis, he said.
The Securities and Exchange Commission of Pakistan (SECP), which is the apex regulator of the equities
market, is deeply mired in the political crisis engulfing the government.
The current situation is not related to market mechanism, correction or any fundamental reason. It is only a
reaction to the ongoing political situation, a senior official of the SECP told Dawn. The SECP cannot
intervene in daily volatility, nor is there any plan or discussion to impose a floor, he added.
A stockbroker who asked not to be named claimed that for all their faults, the SECP and its officials had
tightened regulations, improved reporting standards and closely monitored the brokers. Crackdowns had also
struck fear in the hearts of the brokers who had put an end to the practice of in-house badla, which led to
large-scale defaults by the brokers in the previous market declines.
Raza Jafri, executive director at Intermarket Securities, said it was too early to say if Tuesdays steep fall would
turn out to be a trend or the market would recover. It would be childish to form an opinion on a days trend
just as a single swallow does not a summer make, he said. He pointed out that the valuations had turned
attractive though.
With the way this market has closed, the downslide is likely to continue tomorrow, particularly in initial
trading. The problem is that there seems to be no viable solution to the political impasse and the risk of
confrontation is not too far away. Bottom fishers may be on the lookout but we think this might be akin to
catching a falling knife, analysts at Intermarket Securities said.
Ten biggest index point decliners were Habib Bank, UBL, Lucky Cement, Engro Corp, OGDC, Hubco, PPL,
MCB, FFC and DGKC.
Published in Dawn, July 12th, 2017
Updated July 12, 2017
Bearish trend continues at PSX as benchmark index sheds 328
points
The Pakistan Stock Exchange landed in red on Tuesday as the capital market failed to recover from Tuesday's
negativity, with the benchmark KSE-100 shares index shed 328 points or 0.74 per cent to reach 43,792 points.
The benchmark tested day's high at 44,206 points just 85 points above the session's opening in first 10
minutes just to dive down immediately. It touched the bottom at 43,027 points level on the back of political
uncertainty.
Volumes were led by the commercial banking sector with almost 30 million shares traded. The power and
cement sectors followed the pursuit with 24.3mn and 22.6mn shares traded respectively.
Senior analyst Ahsan Mehnati said, "Stocks closed lower amid pressure in scrips across the board as investors
weight outcome of the panamagate case after the joint interrogation team (JIT), that probed business affairs
of the first family, submitted its report to the apex court."
He said that the late session support in oil, banking, and textile stocks supported the index to close above
session low after global oil prices retreat, reports of surging banking deposits, upbeat data on textile exports
and auto sales data.
"Concerns over surging trade deficit and external account imbalance played a catalyst role in bearish close at
the PSX," he added.
126.79 million shares changed hands by the end of the session, with a total worth of nearly Rs10.5 billion.
Stocks of 346 companies were traded, of which 141gained in value, 192 declined and 13 remained unchanged.
Volumes were led by:
K-Electric Ltd: 19.92m shares traded [+4.97pc].
TRG Pak Ltd: 14.77m shares traded [+0.81pc];
Engro Polymer: 8.49m shares traded [-2.69pc];
Sui North Gas: 8.32m shares traded [-4.72pc]; and,
B.O.Punjab: 7.30m shares traded [+1.98pc].
Updated July 13, 2017
Oil and Gas Development Company gained 0.7pc, Pakistan Oilfields 1.51pc and Pakistan Petroleum 1.59pc.
The next key checkpoint remains Mondays court hearing, stated dealers at Intermarket Securities. Politics
notwithstanding, the markets valuations are getting attractive, they added.
Ahsan Mehanti of Arif Habib Corp observed that surging global crude prices, renewed foreign inflows and the
prime ministers rejection of the resignation call led to a strong market close.
Published in Dawn, July 15th, 2017
Updated July 16, 2017
Stock market plumbs years lowest level as political turmoil
persists
KARACHI: Political uncertainty, submission of the JIT report and adjournment of Supreme Court decision to
next week, resulted in adding to the pervading gloom over the investor sentiments. KSE-100 index declined
885 points (1.96 per cent) and settled at the end of the week at 44,337 points.
During the week, the market also saw one of the worst sessions since 2009 when the index tanked 4.7pc and
also hit its calendar year to date low at 43,043 points.
According to Arif Habib Ltd, the downside was led by cements (176 points) due to unimpressive cement
dispatch numbers for June, due to Ramazan and monsoon rains; power generation and distribution (89
points); fertilisers (86 points); automobile assemblers (84 points) as car sales slowed down in June and
shorter working days in Ramadan; Oil & Gas Marketing Companies (OMCs, 76 points).
Analyst at Topline Securities Adnan Sami Sheikh calculated that on the sector front declines were seen in:
auto parts (7.7pc), transport (6.3pc), auto assemblers (5.8pc) and food (3.6pc) underperformed the broader
market, while OMCs (2.3pc), engineering (2pc), cement (1.8pc) and fertiliser (1.6pc) were in line; while
Exploration & Production (E&P) and banks fared slightly better shedding at the most 1pc.
On scrip-wise basis, the biggest falls were noted in UBL (82 points), Hubco (77 points) DG Cement (86 points)
Dawood Hercules (59 points) and Engro Corp (56 points.
AKD Securities noted major losers during the week were HCAR (12.64pc), PSMC (10.56pc), CHCC (9.36pc),
ICI (7.08pc) and LOTCHEM (6.93pc). Gainers, meanwhile, were GWLC (4.43pc), EFERT (3.99pc), NBP
(3.93pc) PPL (2.99pc) and FFC (2.47pc).
The volumes rose 5.2pc over the previous week to 175 million shares in wild intra-day moves. Traded value
rose 3.5pc to Rs9.7 billion. Volume leaders during the week were: KEL (68.63m shares), TRG (55.32m shares),
BOP (46.74m shares), EPCL (34.74m shares) and ASL (29.47m shares).
Foreign investors were net buyers of $0.99m worth of equity during the outgoing week against net sales of
$5.83m the preceding week. Foreign buying was concentrated in banks ($4.0m) and E&Ps ($1.4m), while
foreigners sold $3.4m of cement, $1.9m worth OMCs and $1.3m of power generation stocks.
Among domestic players, individuals remained major sellers of $9.96m while insurance companies were the
largest domestic buyers of shares valued at $15.7m
Among major news Moodys affirmed B3 rating as risks remain; trade deficit widened by 37pc to $32.5bn;
according to the State Bank of Pakistan, the nations total liquid foreign exchange reserves amounted to
$1.44bn on July 7, up $80m from a week ago; foreign workers remittances during fiscal year 2017 (FY17) fell
3.08pc year-on year (YoY) to $19.30bn; K-Electric unveils $1bn plan to add 900MW into the system; cement
dispatches during FY17 rising to 3.71pc YoY to 40.315m tonnes and total domestic car sales during FY17 going
up 2.55pc YoY to 185,781units.
Outlook: According to Arif Habib Ltd, the market is likely to remain choppy next week as the investor
attention remains focused on Supreme Court verdict over the JIT findings. In the short term the prevailing
sentiments will supersede the market fundamentals. AKD Securities wrote in its weekend report, Investors
are expected to remain in tunnel-vision mode, affixed on Mondays hearing in the Supreme Court. It added
that volatility was expected with thin volume pushing on either side. Next support to the market was expected
from June-end result season with investors aligning their portfolios to expectations on earnings and payouts.
Elixir Securities also thought the market was expected to remain volatile till clarity emerged on the political
front. The brokerage stated, however, note that KSE-100 index has already corrected by 16pc since its all time
high record on May 24th, and added that once the dust settles, the market could again start focusing on
fundamentals where the key theme over the next one month will emanate from the upcoming result season.
Published in Dawn, July 16th, 2017
WEEK 3: 17-21 JULY 2017
Updated July 17, 2017
PSX commences week on cautious note, benchmark index adds
186 points
The Pakistan Stock Exchange (PSX) commenced the trading week on a cautiously positive note, with the
benchmark KSE-100 Index advancing 186 points, or 0.42 per cent, to touch 44,523 on Monday.
The market touched the day's low at 43,975.12 points in the initial 20 minutes of the trading session. However,
it rebounded immediately after to remain range-bound activity throughout the day. The benchmark tested the
day's high at 44,630 points near the end of the session.
A report issued by JS Global noted that overall volumes were extremely tight during the session, clocking in at
75 million shares the lowest this year.
Likewise, only 34m shares of KSE-100 companies changed hands during the session, with a total worth of
nearly Rs3.1 billion.
JS Global added that the cement sector stocks saw some upside potentially due to news of government
initiatives in increasing access to affordable housing finance in the country.
The engineering sector led activity at the bourse, with 9.2 million shares traded; it was followed by the
banking and the power sectors with 7.7m and 7.5m shares, respectively.
"Stocks closed higher amid thin trade led by oil and banking scrips on strong valuations," said analyst Ahsan
Mehanti.
He was of the view that investors' speculation over the outcome of the ruling Sharif family's response to the
Supreme Court on the joint investigation team's probe, surging global crude prices and foreign inflows played
a role in the higher close.
Stocks of 356 companies in all were traded on the exchange, of which 174 gained in value, whereas 165
declined and 17 remained unchanged.
Volumes were led by:
K-Electric Ltd: 5.7m shares traded [-0.30pc];
Engro Polymer: 4.6m shares traded [-1.31pc];
Dewan Motors: 4.3m shares traded [-4.85pc];
TRG Pak Ltd: 3.5m shares traded [-0.17pc];
B.O.Punjab: 8.2m shares traded [-3.01pc].
Updated July 18, 2017
Stocks manage modest gains amid thin volumes
KARACHI: Complete lack of interest in trading at the stock market saw the volume dip to three-year low at
just 75 million shares on Monday.
The benchmark KSE-100 index moved narrowly between the positive and negative. However, it closed with
gains of 185.77 points (0.42 per cent) at 44,523.21 on late buying. Intraday, the index briefly breached the
44,000-support level.
Dealers at Elixir Securities said that trading remained range bound as participants were glued to the TV
screens, watching the Supreme Court proceedings. Lack of flows from both local and foreign institutional
investors kept stock prices down. Uncertainty gave rise to indecision and no one wanted to take fresh
positions until the dust had settled.
Analyst Adnan Sami Sheikh at Topline Securities said the trading volume thinned to the lowest since Aug 22,
2014, when calls for the incumbent PMs resignation were first sounded by the opposition amid alleged
election rigging.
ADVERTISEMENT
On Monday, traded volume shrank 33pc to 3-year low at 75.3m shares while traded value contracted 30pc
over the previous session to Rs4.2bn. Third and second-tier stocks were on the volume leaders list with KEL
(+0.30pc) taking the top slot with dealings in 7m shares, followed by Engro Polymer showing 6m shares
changing hands.
Top contributors to the index were BAHL which gained 4.3pc, HUBC 1.8pc, Lucky 1.5pc, UBL 1.3pc and OGDC
1.4pc.
While HBL declined by 0.7pc, PPL 1.1pc, JLICL 4pc, PMPK 4.3pc and Engro 0.3pc taking away 62 points.
Sector-wise, pharmaceuticals added 36 points, power and banks 34 points each, cements 28 points,
exploration and production (E&P) 27 points. Textile shed 8 points. Analysts at JS Global said the E&P sector
stocks were up due to increase in oil prices as a slowdown in the growth of rigs drilling in the United States
eased concerns of surging shale supplies.
Published in Dawn, July 18th, 2017
July 18, 2017
On the flip side, fertiliser shed 26 points, cement 19 points and OMC 17 points.
Indus Motor gained 2pc as it announced price increase on various models. Market is expected to remain
under pressure on Friday due to the last day of the rollover week, said dealers at JS Global.
We see lacklustre trading with investors mainly tracking flows while domestic politics will continue to remain
a drag until the court announces Panama verdict, wrote Elixir Securities in its day-end report.
Meanwhile, Intermarket Securities predicted: As the result season unfolds, we expect heavy weights to pull
the index while offsetting negativity from Supreme Court verdict. That said, thin participation might persist in
the medium term as modicum of clarity emerges.
Published in Dawn, July 28th, 2017
The Pakistan Stock Exchange (PSX) ended the week on a negative point, with the benchmark KSE-100
Index losing 207 points, or 0.44 per cent, to close at 46,877 on Friday.
The market hit the day's high of 47,241 within 15 minutes after the opening of the trading session but
failed to sustain the positive momentum. Profit-taking in the second session led the benchmark index to
the day's low at 46,834 points near the day's close.
The commercial banking sector dominated the day's trading with 50.9m shares traded, while the
technology and the engineering sectors followed with 42.2m and 38.9m shares traded respectively.
"Stocks closed bearish amid higher trades on investor concerns over foreign outflows," said Ahsan
Mehanti of Arif Habib Corporation.
He added that the higher global crude prices, speculations on likely refunds to the ailing textile sector next
week, upbeat oil consumption and cement sales data for July 2017 invited mid-session support in the
textile, oil and cement sectors.
"Economic uncertainty and concerns over political noise played a catalyst role in the bearish close at the
PSX," he added.
A total of 138m shares worth nearly Rs8.8bn of KSE-100 index companies changed hands during the
session.
Stocks of a total of 395 companies were traded, of which 170 advanced, 202 declined and 23 remained
unchanged.
Updated July 30, 2017
After hitting the intraday high by 613 points, the KSE-100 index closed with a gain of 523 points (1.14 per
cent) at 46,533.43.
While foreign and local investors were inclined to take profit at higher levels, mutual funds absorbed selling by
building positions worth $12.44 million.
Equities surged in the lead of the energy chain sector because of higher crude oil prices. Pakistan Oilfields was
ahead of other oil stocks with a gain of 4.1pc.
Habib Bank continued to slide, briefly hitting its lower limit during intraday trade. Rumours did the rounds
about a risk of penalty in view of the banks compliance issues in its New York branch. However, it made no
such announcement.
The volume declined 20pc from the preceding session to 256m shares while the traded value fell 6pc day-on-
day to Rs17.6 billion.
Major contribution (53.73m shares) to the volume came from Azgard Nine and Aisha Steel.
Top five stocks that contributed 258 points to the index included Engro Corp, which went up 4.2pc, Sui Nor-
thern Gas Pipelines 5pc, Pakistan State Oil 5pc, Pakistan Oilfields 4pc and Oil and Gas Development Company
2pc. Habib Bank lost 2.7pc value, followed by Abbot Laboratories 3.9pc, Lucky Cement 0.7pc, Kohinoor
Textile Mills 3.1pc and Dawood Hercules 0.7pc, taking away 177 points.
The oil marketing sector added 121 points to the index, exploration and production 119 points, fertiliser 99
points, power 55 points and cement 42 points. Banks took away 50 points from the index.
The market is still showing resilience after the prime ministers dismissal, said analysts at Intermarket Secu-
rities. They added that the result season will drive the fate of the market until the political landscape changes.
The volume rose to 368 million shares compared to 256m shares a day earlier. Major contribution to the
volume came from second-tier stocks K-Electric, Bank of Punjab and TRG Pakistan, which collectively
contributed 77m shares.
With politics settling down and result season still in stop-start mode, the low Consumer Price Index reading of
2.9pc for July, the lowest level since November 2015, allowed investors to focus on positives.
According to Intermarket Securities, major contribution to index upside came from Habib Bank up 2.94pc,
Lucky Cement 2.77pc, UBL 1.33pc, SNGP 2.51pc and MCB Bank 1.6pc, adding 227 points. On the flip side, PPL
shed 0.82pc, MEBL 2.17pc and OGDCL 0.57pc taking away 39 points.
Financials lent most support on institutional interest where HBL bounced back by 2.9pc to recover part of the
8pc losses in the previous two sessions.
Dealers at JS Global stated that buying interest was witnessed in OMC sector with PSO rose 2.46pc, SNGP
2.51pc, and SSGC 1.64pc. PSO possibly gained on prospects of becoming Shariah-compliant after receipt of
cash against Pakistan Investment Bonds and retirement of short-term debt.
The steel sector continued its positive trend due to revised customs valuations on imported steel, favouring
local steel manufacturers.
ASL jumped 5pc, ISL 3.89pc and ASTL 1.55pc. E&P stocks shed values as international oil prices decreased on
account of increasing US oil inventory and high production by Organisation of Petroleum Exporting
Countries.
The volume rose by 24pc over the earlier day to 455 million shares hitting 10-week high. Reduction in
political noise post-Panamagate verdict and smooth transition afterwards with new prime minister taking
charge seemed to have revived retail investors confidence, said analysts at Elixir Securities. The traded value
was down 4pc to Rs16.1 billion. Industrial and consumer sideboards generated the highest volume on retail
churning.
K-Electric and Bank of Punjab dominated the volumes chart with more than 40m shares changing hands in
each. KEL remained in the limelight gaining 7.7pc ahead of its financial year 2017 results, which is likely to be
prepared on previous multi-year tariff.
Regardless of the positive momentum profit taking continued in selective stocks. The index touched intraday
high by 218 and intraday low by 91 points.
Index heavyweights continued to drive the rally as HBL up 1.1pc, MCB 2pc, KEL 7.7pc and PSO 1.9pc
contributing 119 points to index. On the other hand, PAKT was down 5pc, SNGP 1.9pc, ISL 2.7pc and PPL
0.8pc taking away 68 points.
The KSE-100s performance stood out in the context of a poor day for Asian markets, reinforcing the view
that domestic developments will likely continue to be of paramount importance, stated analysts at
Intermarket Securities.
According to JS Global, the banking, oil and gas stocks drove the rally. Commercial bank heavyweights
including HBL jumped 1.11pc, MCB 2.01pc, NBP 0.59pc and ABL 1.07pc, cumulatively adding 77 points to the
index.
Market opened sideways and stocks mostly witnessed range-bound activity, as institutional interest in
mainboard names remained restricted. Profit-taking took hold in the second half as investors were disinclined
to hold positions over the weekend.
The index, therefore, saw some of the gains pared off it had gathered over the week.
The volume declined to 364 million shares from 455m shares a day earlier and the traded value fell to Rs13.4
billion from Rs16.2bn. Major contribution to total market participation came from BoP, ANL and ASL,
contributing 91m shares.
Elixir Securities stated that on the leader board, Engro Fertilisers gained 3.5pc after the company announced
payout that surprised investors despite earnings underperforming consensus. Meanwhile, gas discovery
notification by OGDCL failed to have any impact on stocks price performance that tracked the sectors bearish
trend due to lower global crude.
Major contribution to the downside came from MCB which was down 1.36pc, OGDC 0.95pc, Engro 0.91pc,
TRG 3.72pc and UBL 0.69pc, taking away 90 points. On the flip side, EFERT up 3.45pc, SEARL 1.39pc and
MEBL 1.35pc.
Ahsan Mehanti of Arif Habib Corp said the stock closed bearish on investor concerns over foreign outflows.
Yet, he said that higher global crude prices, speculations on likely refunds to ailing textile sector next week,
upbeat oil consumption and cement sales data for July 2017 invited mid-session support in textile, oil and
cement sectors.
The Pakistan Stock Exchange gained modestly on Wednesday, with the KSE-100 index gaining 19 points, or
0.04 per cent, to close at 45,999.
Bears dominated the session early in the day, with the index sliding to 45,591, but stocks gained ground
towards the end to test 46,101.
"Pakistan equities closed Wednesday little changed after recovering from morning declines which had pulled
the benchmark KSE-100 Index lower," said Elixir Securities.
"Market started on a weaker note and notable bluechips across oils, financials and cements, along with select
index names, were dragged down by mid-day on selling amidst a dearth of serious buyers."
"Political noise remained a dampener as former prime minister Nawaz Sharif kicked off his defiant march,"
the report added.
"Although wider market activity was lower as evident from under 215m shares exchanging hands on KSE All
Index, however volumes and turnover on the benchmark KSE-100 Index jumped 21pc and 77pc respectively
versus yesterday as local institutions reportedly cherry-picked notable names in the second half of trading and
aided in market recovery."
A total 101.5 million shares worth Rs11.15 billion were traded during the session. Shares of 368 companies
were traded, with 222 of them advancing, 134 declining and 12 remaining unchanged.
The engineering sector dominated the day's trading with 29.1m shares traded, while commercial banks and
power generation followed with 27.4m and 18.9m shares traded respectively.
Volumes were led by:
1. Aisha Steel Mill: 19.74m shares traded (+4.73pc)
2. K-Electric Ltd: 14.8m shares traded (+2.03pc)
3. TRG Pak Ltd: 14.9m shares traded (+4.26pc)
4. Azgard Nine: 10.0m shares traded (+6.70pc)
5. Summit Bank: 9.0m shares traded (+9.46pc)
If stockbrokers and investors in the trading hall of the Pakistan Stock Exchange (PSX) celebrated the ouster of
former prime minister Nawaz Sharif on July 28, they had nothing personal against him.
The prolonged uncertainty over the fate of the former prime minister had taken its toll on the market.
On May 25 the KSE-100 index hit a peak of 53,123 points, but then remained on a slippery slope.
By July 28, when the Supreme Court finally unfolded its judgment, the index had sunk to 45,912 points, depicting
a loss of 7,211 points, or 14pc, from its all-time high level.
But that relates only to the stocks that form the KSE-100 index shares, said a stockbroker.
He explained that two classes of investors had badly burnt their fingers: those who kept pouring money into
overvalued, heavyweight scrips eligible to be included in the MSCI emerging-market (EM) index, and the small
investors with little means who jumped on the bandwagon to accumulate, again, overvalued, second-tier stocks.
Both those categories of shares had lost between 20pc and 40pc of their price.
Yet, in just four trading sessions after Mr Sharifs ouster, the KSE-100 index clawed back by more than 1,000
points to cross 47,000 on Thursday.
Even if the departure of the ex-premier was bad news, investors heaved a sigh of relief since uncertainty,
they say at the market, is worse than bad news
Past events suggest that the stock market has prospered during the PML-N regime since the image of Mr Sharif,
himself an industrialist, as the leader of a business-friendly government is deeply embedded in stockholders
minds.
Ironically, the market had also celebrated the PML-N victory in the last general elections with the same furore.
But uncertainty, they say at the market, is worse than bad news. So even if the departure of Mr Sharif was bad
news, investors heaved a sigh of relief.
On that fateful Friday (when Mr Sharif was disqualified), the KSE-100 index sank by 1,670 points, or 3.6pc, early in
the day before the announcement of the verdict.But in the second half, investors, realising that the worst may be
over, fell over one another in cherry-picking heavily undervalued stocks, pulling the index out of the red.
The PSX, which stood out as the best performing market in Asia in 2016 by giving out a return of 46pc, fell upon
bad times at the dawn of 2017.
First, it was the federal budget. The government set aside the budget proposals presented by the PSX.
The three principal measures included in it were the rationalisation of the period of holdings for levy of Capital
Gains Tax (CGT), waiver of tax on dividend in the hands of shareholders and abolition of tax on bonus shares.
The budget, in contrast, decreed increase of tax on dividend to 15pc from 12.5pc while ignoring the issue of tax on
bonus shares, and abolished the concept of holding period slabs for calculation of CGT, which would now be
levied at a flat rate of 15pc.
All through the month of May, the madness in the market was without method as investors continued to build
positions in preparation for the countrys re-entry into the MSCI EM index.
Everyone believed this would unleash a wave of investment from EM passive funds in the PSX.
Estimates ran up to $500m of incoming funds in the first few days.
But May 31 turned out to be a huge disappointment as all preparations by the stock market to accommodate
funds went in vain.
Investors watched in disbelief as, in contrast to an inflow, the market saw foreign outflows.
Those who had poured money in six heavyweight MSCI EM-eligible stocks were badly trapped.
Then again on July 11, with no viable solution to the political impasse over the Panama Papers case, the KSE-100
index tanked 2,153 points, or 4.65pc the biggest single-day decline in terms of points.
Investors started panic-selling in the lead of mutual funds, which sold equity worth $11.6m.
Yet, the market managed to stage a rally of 1,052 points the very next day, recovering about a half of the value
lost a day earlier.
While all local and foreign participants including individuals and institutions such as banks, corporates and
insurance companies extended their selling spree mutual funds absorbed all of the sell-off with net buying of
$15.3m worth of stocks.
With assets under management of Rs650bn under an aggregate 219 funds, the mutual funds industry has come to
dominate other participants and dictate the direction of the market.
Foreign investors, meanwhile, followed the old market maxim: The time to buy is when theres blood in the
streets.
Like vultures they swooped on fallen corpses to lap up heavyweights that had attained attractive valuations
following consistent bleeding since their peak on May 25.
Finally, it has to be noted that Pakistans equity market, which has grown to be valued at around Rs10 trillion,
stood out as low capitalised and isolated until the start of the current decade.
But it has now matured enough to be affected by internal and external events.
A decade ago, one could see business as usual with market even taking a climb, regardless of bomb blasts in the
city.
Global events such as the price of coal now impacts, say, the cement shares while the fluctuations in the price of
crude sets the direction of the PSXs largest sector by market capitalisation, i.e. oil and gas.
Published in Dawn, The Business and Finance Weekly, August 7th, 2017
August 07, 2017
The market hit its high point at 46,929 within the first half hour of trading, but continued to fall and marked
46,336 as the day's low towards the close of trading.
Analyst Ahsan Mehanti of Arif Habib Corp attributed the bullish activity to corporate results falling short of
expectations in the fertilisers and banking sector.
"Weak banking spreads, concerns for surging circular debt in the energy sector, falling global crude prices,
foreign outflows and concerns for political noise played a catalyst role in the bearish close," he added.
Commercial banks dominated the session with 45.5m shares traded, while technology and engineering sectors
followed with 22m and 21.7m shares traded respectively.
Around 100 million shares worth Rs7.1 billion were traded during the day. Shares of a total of 384 companies
were traded in the session, of which 106 advanced, 263 declined and 15 remained unchanged.
Some of the stocks that closed on their lower circuit breakers included Taha Spinning Mills which was down
by Rs11.69, followed by Mirpurkhas Sugar Rs7.95, Tariq Glass Rs5.74, Altern Energy Rs2.42 and Sakrand
Sugar Rs1.28.
Pak Elektron announced its second-quarter earnings of Rs3.3 per share, down 6pc year-on-year. The
companys sales, however, remained lower possibly due to higher discounts offered on appliances.
Consequently, the stock closed down 3.9pc.
Maple Leaf Cement also closed down 3.6pc on market chatter of a possible right issue that affected investors
sentiment as it would dilute the stock price.
Hubco turned red after disclosure from Kot Addu Power, which was down 0.16pc, announced its interest in
acquiring a stake in Hubco.
Published in Dawn, August 11th, 2017
August 11, 2017
CORPORATE WATCH
Pak Elektron profit soars
KARACHI: Pak Elektron Limited (PAEL) posted a 20.7 per cent growth in its consolidated profit-after-tax
(PAT) to Rs2.73 billion (earnings per share Rs5.49) for the six months ended June 30 compared to Rs2.26bn
(EPS: Rs4.55) in the corresponding period last year.
The companys board of directors met on Thursday and declared an interim cash dividend of Rs1.50 (15pc) per
share.
Net revenue was up 15.5pc to Rs19.4bn from Rs16.8bn and operating profit improved to Rs4bn from Rs3.5bn.
Net earnings for the 2QCY17 stood down by 6pc YoY to Rs1.63bn (EPS Rs3.27) from Rs1.74bn (eps: Rs3.49).
Syed Waqas Imam, analyst at Intermarket Securities, commented that the major reason for the earnings
decline in 2QCY17 was the increase in sales discounts (25pc of revenues) to push sale of appliances in a highly
competitive market. Major discounts were offered in split ACs market in which there was greater competition
than in refrigerators, analyst said.Equities Correspondent
K-Electric approves 900MW power plant
KARACHI: The board of directors of K-Electric Limited (KEL) on Thursday gave its approval to the
development of a 900-megawatt (2x450 MW) RLNG-based combined cycle power plant at Bin Qasim Power
Station Complex, subject to the completion of all statutory and regulatory requirements.
The power utility said in a notice to the Pakistan Stock Exchange that a favourable result of the companys
review petition on Multi-Year Tariff determination 2017, pending with the National Electric Power Regulatory
Authority, was critical for financing and development of this mega project.
Published in Dawn, August 11th, 2017
KARACHI: Stocks continued to bleed on Friday as the KSE-100 index shed 346 points (0.76 per cent) to close
at 45,288 points. Political noise restrained institutional investors from building fresh positions while retail
investors also stood on the sidelines ahead of the long weekend (market to remain closed on Monday on
account of Independence Day).
Stocks at the PSX seem to be sinking in the political quagmire with fearful upcoming episodes of PTIs show of
strength on Sunday night; cleric Tahirul Qadris sit-in on Wednesday in Lahore and the ongoing onslaught by
a defiant former prime minister Nawaz Sharif.
The overall selling pressure pushed the market to new lows well below technical support and on the verge
of lower channel support taking cumulative losses to 1,953 points from intraday high posted on Aug 4,
Intermarket Securities said in its daily report.
Major contribution to the total market volume of 114 million shares on Friday came from ANL, TRG and ASL.
Heavyweights HBL, PPL, ENGRO, PSO and OGDC were top laggards which cumulatively pulled the index
down by 150.62 points.
Steel stocks, ISL and ASL, gained Rs1.89 and Rs0.29, respectively, on the back of increase in prices of their
products, noted analyst Zoha Amjad at Aba Ali Habib Securities.
MARI gained 1.08pc, TRG 1.89pc and ICI 2.37pc, adding only 23 points to the index.
Meanwhile, Engro Foods declared results on Friday posting lower-than-expected numbers which saw its stock
hit the lower limit. HBL too traded in the red after announcing below-expected quarterly earnings.
Ahsan Mehanti at Arif Habib Corp commented that stocks closed lower amid thin trade also due to pressure in
global equities on geopolitical risk. Concerns over widening trade deficit, falling foreign exchange reserves and
circular debts in energy sector were sentiment dampeners at the PSX.
Published in Dawn, August 12th, 2017
Political cacophony unnerves investors
Updated August 13, 2017
KARACHI: The outgoing week brought devastation for stock investors, with the KSE-100 index plunging by
1,589 points (3.4 per cent) to close at 45,288.
The trading volume remained thin as participants were cautious because of continued political uncertainty.
Even the ongoing result season failed to boost sentiments. Arif Habib Ltd attributed the adverse performance
during the week to investors nervousness over the political show of strength, heavy foreign selling and
unimpressive economic data, such as a widening trade deficit and declining foreign exchange reserves.
Topline Securities stated that investors booked gains in the outgoing week after rising 2.1pc in the earlier
week. Political theatre drew the masses again as ousted premier Nawaz Sharifs cavalcade drove from
Islamabad to Lahore with leaders of his rival party also breathing fire.
The average trading volume dipped 46pc to 190 million shares. Major trading was witnessed in retail
favourites led by Azgard Nine, TRG Pakistan and K-Electric. The average traded value declined 42pc to Rs9.6
billion.
Foreigners sold equities worth $31.2m during the week. Foreign selling was concentrated in oil marketing
companies ($8.5m), banks ($6.7m), exploration and production companies ($6.3m) and cements ($4.3m).
The foreign sell-off was absorbed by insurance companies that bought shares valuing $7.4m followed by
mutual funds ($6.5m).
According to Arif Habib Ltd, commercial banks took away 336 points from the index, followed by fertilisers
251 points, cements 238 points, oil and gas exploration companies 185 points, and power generation and
distribution companies 104 points.
Topline Research calculated sector-wise index erosion, with engineering going down 7pc, fertiliser 5pc,
cement 4pc, power 4pc, exploration and production 3pc, banking 3pc, auto 3pc and oil marketing 2pc.
AKD Securities stated that performance-wise, three scrips managed to close the week on a positive note:
Pakistan State Oil (4.88pc), Indus Motor (1.79pc) and Bank Alfalah (0.07pc). Laggards included Maple Leaf
Cement (14.67pc), Engro Foods (12.08pc), Pak Suzuki (11.44pc), Engro Corp (7.44pc) and Fauji Fertiliser Bin
Qasim (6.57pc).
Outlook: Investors continue to await clarity on the political scenario. Ongoing foreign selling due to the
expected rupee depreciation may also keep the market under pressure.
We anticipate the volume to remain weak, Elixir Securities stated. The brokerage added that important
financial results in the next week include International Industries, Hub Power Company, Bank Alfalah and
Engro Corporation.
Arif Habib Ltd had a mixed view as a political party will start protests from Aug 16, which can keep the market
jittery.
AKD Securities wrote in its weekly report that the ongoing show of strength by various political parties was
expected to hurt investor confidence. Individual scrips, such as International Steels, Shell Pakistan, Hub
Power Company, Allied Bank, Bank Alfalah and Engro Corp, ought to be watched as they will announce their
financial results next week, it said.
Moreover, looming concerns about the rupee depreciation can divert investors attention towards sectors that
may benefit from the move, such as textile, exploration and production and power.
KARACHI: Stocks bounced back on Wednesday to cover some of the losses after a massive plunge of over
three per cent in the previous session. The KSE-100 index recovered 287.51 points (0.65pc) to close at 44,186.
The traded volume was down by 2pc over the earlier day to 187 million shares whereas the traded value was
up 13pc to Rs10.3 billion, signifying that big market capitalisation stocks attracted buyers.
The volume leaders remained the second-tier stocks, which included ANL, ASL and TRG, contributing 38m
shares to the total as individuals (mainly retail investors) changed places with the foreign investors.
In contrast to Tuesday, individuals took faith and bought stocks worth $3.8m. Foreigners, who had seized the
opportunity to buy stocks at attractive prices in the bloodbath a day earlier, came in to book profit with net
sale of $3.8m.
Topline Securities identified five main contributors to the index rise as SNGP which went up 4pc, Engro Corp
2.2pc, HBL 0.9pc, OGDC 1.7pc and DAWH 3.4pc, adding 146 points. On the other hand, Lucky Cement was
down 1.6pc, PPL 0.6pc, SEARL 2.3pc, POL 1.3pc and EFoods 5pc, taking away 69 points.
The continuity of political uncertainty has resulted in investors switching from growth stocks to value plays,
asserted analysts at JS Global.
Despite increase in the overall OMC sectors prices, Shell closed flat as its earnings were unveiled at Rs21.85
per share for first half.
Commercial banks heavyweights MCB was up 0.96pc, HBL 0.81pc, UBL 0.18pc, and NBP 1.45pc, contributing
53 points to the index.
Steel stocks, which had taken heavy beating on Tuesday, recorded across-the-board increase with ASL up
1.90pc, ISL 4.13pc, INIL 4.98pc, recovering on attractive valuations.
Published in Dawn, August 17th, 2017
August 18, 2017
However, renewed interest from institutional buyers helped the index recover to touch a high of 42,291 points
before closing with a total loss of 170 points, or 0.40 per cent, at 41,983.
"[...] Hefty buying in heavyweight stocks during the latter hours resulted in a major recovery in the KSE-100
Index," reported an analyst note from JS Research.
"We believe negativity in the market continues on the back of political uncertainties and concerning economic
indicators. Also, redemptions from mutual funds are likely to cause further selling pressure," it added.
Nearly 112 million shares of KSE-100 scrips, worth Rs9.74 billion in total, were traded during the day. Shares
of 354 companies in all were traded, of which 98 advanced, 242 declined and 14 remained unchanged.
The cement sector dominated the day's trading with 25.7m shares traded. Engineering and oil and gas
followed with 24.5m and 21.5m shares traded.
The index started the day with modest gains in the beginning of the session, crossing the 43,000 mark and
touching 43,173 points before profit-taking pulled it down the day's low of 42,136 towards the close of trading.
Nearly 185 million stocks worth Rs10.05 billion were traded on the exchange over the day. A total of 347
symbols were traded, of which 104 advanced, 257 declined and 13 remained unchanged.
"Stocks closed lower amid pressure on institutional profit taking in overbought oil, cement and fertiliser
stocks," Ahsan Mehanti of Arif Habib Corporation said in a note.
He added that investors weighed the uncertainty over the outcome of United States President Donald Trump's
recent statements on Pakistan's efforts to curb militancy and terrorism, which led to higher selling.
The textile sector dominated the day's trading with 30.6m shares traded, while engineering and technology
sectors followed with 21.5m and 20m shares traded respectively.