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PSX INDEX UNDERGOES SEE-SAW RIDE TO END IN NEGATIVE
SUMMARY

During the week the stocks remained negative for three days while it gained points on two days. Overall the KSE-100 Index lost 407.94 points to close at 49,555.83 on Friday. The average volume too declined to 369.63 million shares from 523.40 million shares per day. The paid up capital too declined to Rs9.897 trillion.

The first day of the week Monday started on a positive note with the news of Cabinet Committee had put a hold on five percent divestment of government’s holding in OGDC. Later on pressure was build up in stock when notices on the PSX website regarding suspension of trading terminals of certain brokers due to their non-compliance with CDC regulations. The investors were also concerned over changing US policies, which led to panic selling on PSX. The Index plunges below 49,000 shedding 991.53 points to close at 48,972.24.

PSC remained depressed on third consecutive session on Tuesday. The US policy concern and SECP strict action continued to dominate the market, which further brought index down by 214.57 points to close at 48,757.67. Like Monday ,OGDC maintained its winning streak ( +1.9%) for the second day. It was followed by Hub Power (+1.3%) the second highest gains for the day . The volume declined to 316.85 m shares.

The stocks recoup losses on Wednesday when it gained 689.19 points to close at 49,455.86. The volume too increased to 356.36m shares. The sectors such as consumer, industrial and pharma led gain. Most steel players closed the day at their respective upper price limits after International Steels (+5%)notified the exchange of plans to increase its capacity.

The volatility was seen on Thursday and the Index swing both ways with intraday high of 49,931.88 and low of 49,424.16. It finally settled at 49,665.97 with gain of 210.11 points . Low inflation reading of 3.66% for January 2017 and delay in court hearing on Panama Papers led to positive sentiments in the market. However, investors continued to be concerned over the possible outcomes of SECP ruling against the marginal financing.

Friday saw the volatility continued in the market. The PSX benchmark KSE-100 Index finished with a fall of 110.14 points to close at 49,555.83. Hub Power went down (-1.1%) after three straight sessions of gain. Nishat Mills (+2%) closed higher and churned most volumes in last three weeks as the company notified investors of venturing into automobile sector by partnering with South Korean auto manufacturer, Hundai Motors. The volume declined to 338.18m shares during the day.

PARTICIPANTS/ACTIVITY

On average shares of 416 companies were traded. Of these 169 were gainers and 233 were losers and 14 remained unchanged.

Foreigners were net seller by $15.3m during the week; companies were net seller $3.32m, Banks were seller $6.84m; Mutual fund net buyer $6.80 and individuals net buyer $8.4 m.

Volume leaders during the week were: K-Electric 247m; TRG Pakistan Ltd 111m; Dost Steel Mills 103m; Lotte Chemical & Aisha Steel Mills 69 m each; Power Cement Ltd 38m; Japan Power20m and Bank of Punjab 12m.

TRIGGERS

– Nishat Mills joins hands with Hyundai to set up car plant.
– Engro Foods’ profit drops by 25pc to Rs.2.4bn.
– ISL to expand production capacity to 1m tons.
– Trump takes first step to scale back financial regulations.
– Forex reserves declining since June.
-CPI stayed flat at 3.7 percent in January
– NSS profit rates increased.

FUTURE OUTLOOK

The Index can revisit Thursday high of 49,937 where a break above will lead to further gain towards 50,887. Any downside will find support at 49,427. Mean while RSI and Stochastic Oscillator is rising.

RAEES UDDIN KHAN – Research & Development Institute of Securities Management & Research Karachi

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