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KSE-100 Index sheds 813 points as bearish sentiments continued
Summary

The week saw another declining of the Index. The KSE-100 Index closed down below 46,000 level to 45,259.34 on Friday. In the past two weeks KSE-100 Index was brought down 1,378 points. The chaotic political situation led to uncertainty and investors remained cautious. The average volume came down by 37% to 155m and market capitalization further deteriorated Rs9,330 trillion. Notable feature of the week was foreigners turning seller by $41.79m. The reason being selloff by foreigner as the heavy weight OGDC was at a discount.

Monday started on a heavy selling by foreigner scrip OGDC of about 35 million at a discount of 2 percent to the Monday’s closing price. The net sales figure stood at $39.45m This brought the Index below 46,000 level to close at 45,682.24, a decline of 389.62 points.

On Tuesday, there was positivity in the market due to some healthy financial results. The cement sector was in limelight. The news of further increase in cement prices brought investors interest while Fauji Cement announced cash dividend. The KSE-100 Index added 119.49 points to close at 45,801.73.

Wednesday started with intra-day gain of 202 points. Later on it was brought down by selling in banks, oil and gas exploration and production and cement sector. Uncertainty about amnesty and budget proposal kept investors guessing. The Index lost 323.10 points to close at 45,478.63 points.

The Index continued sliding on Thursday although it started with recovery at early stage. The international high oil prices failed to affect the shares. Late buying helped in the later stage minimize the losses. The Index shed 90.86 points to close at 45,387.77 points.

On Friday, the investors remained cautious on political uncertainty, fate of amnesty scheme and budget clarity. The Index shed 128.43 points to close at 45,259.34.

Participants/Activity

On average shares of 374 companies were traded. Of these 130 were gainers and 225 were losers and 19 remained unchanged.

Foreigners were net seller of $41.79m during the week; companies were seller by $3.14m, Banks were buyer $3.2m; Mutual fund net buyer $24.63m and individuals net buyers $15.19m.

Volume leaders during the week were: Engro Polymer XD 46m; Unity Foods Ltd 40m; Lotte Chemical XD 37m; K-Electric 33m; Fauji Cement 29 m; Bank of Punjab 14m; Fauji Foods Ltd, Azgard Nine 8m; Shabbir Tiles Ltd & Matco Foods Ltd; Engro Fertilizer & Descon Oxychom 6m each.

 

Triggers
  • Current Account deficit surges by 50pc to 12 billion in the first nine months of FY18.
  • Reserves of the country stood $17.545.5m from $17,638m on April 13.
  • Dollar soars to Rs117 in open market.
  • Foreign investment dips 47 percent in March against March last year.
  • World Bank forecast 5.8% growth in the year 2018.
Conclusions

Technically the current formation is an engulfing bear which means a continuation of the downtrend. The next level could be 45,021 (30 DMA) followed by 44,778. Resistance is at 45,630-45,785.

 

Raees Uddin Khan,
Research & Development, Institute of Securities Management Research & Training (Pvt) Ltd, Karachi.
Dated: April 21, 2018

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