BEARS DOMINATE, INVESTORS CONTINUE WITH PROFIT-TAKING
The euphoria of MSCI subsided this week and the bears took control of the market when it remained bearish for four days as investors opted for profit-taking since last week close on Friday when the KSE-100 Index closed at record high 51,750.91. The Index, however, shed 1008.88 points to close this Friday at 50,742.03 after reaching the highest point this week on Monday at 52,387.87 points. The volume this week averaged to 349 million shares compared to 347 last week while market capital declined to Rs10.095 trillion. The foreigner remained seller with $16.38m while individual were buyer of $14.38m.
Monday started with the continuation of excitement of MSCI created last week in the stock market. Three of the six potential MSCI shares OGDC, MCB and Engro dominated the surge with cumulative contribution of 212 points. The MSCI was set to announce its May 2017 Semi-Annual Index Review at PST 3.00 am on Tuesday in which Pakistan will join MSCI EM. Oil prices jumped 3.3 percent to 49.5 /bbl as Saudi Arabia and Russia extended production cut until March 2018. At close, PSX benchmark KSE-100 share Index recorded an increase of 636.96 points to close record high of 52,387.87 points.
Investors started profit-taking on Tuesday as MSCI euphoria settled. The KSE-100 Index plunged 574.68 points as Index heavy stocks and profit-taking dragged the index down. Six MSCI EM candidates: HBL, UBL, MCB, Engro, Lucky Cement and OGDC brought down by around 424 points. The market closed at 51,813.19 with shedding 574 points.
The stocks started on Wednesday on positive note and reached intraday high of 135 points but as profit-taking started, the benchmark began to recede and closed at 51,511.41 points shedding 301.78 points. Profit-taking was prominent in stocks included in MSCI FM index as investors viewed that some scrips may have become over-valued in the run up to the MSCI announcement.
After a brief positive opening on Thursday the KSE-100 Index succumbed to the news of the International Court of Justice, which ordered a stay on the execution of Indian spy Kulbhushan Jadhav until it makes a final judgment in the case. Banking sector led the decline as MCB, UBL and HBL contributed around 159 points to total decline of 554.81 points to close at 50,742.03.
Stocks fell further for fourth day losing another 214,57 points to close at 50,742.03 on Friday. Investors expecting for a rally following the upgrade of Pakistan Stock Exchange to MSCI Emerging Market index were disappointed as profit-taking continued with foreign investors intensifying their sell-off on all five sessions of the week. Upcoming announcement of monetary policy on Saturday and federal budget next week likely to keep most of the investors on sidelines.
On average shares of 403 companies were traded. Of these were gainers 196 and 189 were losers and 18 remained unchanged.
Foreigners were net seller $16.38m during the week; companies were net sellers $7.05m, Banks were seller $4.99m; Mutual fund net seller 4.16 $4.29m and individuals net buyer $14.38m.
Volume leaders during the week were: Engro Polymer 107m; Dost Steel Mills; World Telecom 82m; Lotte Chemical 55m; Silk Bank 38m; Bank 21m; Dewan Motors 20m; Kohinoor Spinning 16m; TRG Pakistan & Quiz Food 14m each; Dean Cement & BOP 12m each; Azgard Nine 10 & K-Electric 10m each and Dewan Salman 7m.
– US oil prices climbed to one month high to trade at US$ 49.93/bbl level.
– Rs2.1 trillion development spending approved for next year to boost growth rate.
– Hyundai partners with local player to set up assembly plant.
– SBP’s reserves continue to fall, amount to $15.9 billion.
Upcoming announcement of monetary policy at the weekend and federal budget next week are important news to follow.