Pakistan stocks to take cue from crude, world bourses

Pakistan stock market is expected to be in tandem with the movement in crude oil prices and global bourses with earnings season almost coming to an end, analysts said on Saturday.

Pakistan stocks market’s benchmark KSE 100-share Index lost 452.39 points, or 1.43 percent, to close at 31,011.77 points on Friday.

Topline Securities said foreigners were the net sellers of $13.2 million during the last week. Net buying of $5.6 million was seen in cement sector, while oil and gas exploration, chemical and banking stocks witnessed net foreign selling of four million dollars, $3.6 million and $1.6 million, respectively.

Average daily volume declined 11.5 percent to 123.9 million shares and average daily value fell 17.5 percent to Rs6.6 billion.

Uninterrupted foreign selling for quite a long period and the ongoing investigation against a few brokerage houses may add gloom to the underperforming market.

“Saudi Arabia’s disagreement to cut crude oil supplies will keep the commodity under pressure,” Ahsan Mehanti at Arif Habib Corporation said. “The impact of this will be seen at the global bourses as well as Pakistan stocks market.” 

A note from Arif Habib Limited said with the ongoing result season fast approaching conclusion and persistent foreign selling putting a downward pressure on the market, “we view the local bourse to retain its insipid colour in the coming week, unless new triggers make appearance.”

 KASB Securities said, in a commentary, global developments, particularly oil prices, will remain key concerns for the market players. However, earnings announcement of several heavy-weights, including some key exploration and production companies, banks, Lucky Cement and Nishat Mills, should trigger some excitement.

Ali Raza at Elixir Securities said the market may remain range-bound with the benchmark index likely consolidating above 31,000 points. “Ongoing foreign selling, news flow related to NAB (National Accountability Bureau) and dismal volumes in the market will keep participants cautious and on the lookout,” it said.

“Fertiliser sector (excluding Engro Fertilizer) can react positively due to ECC (Economic Coordination Committee) decision of re-allocation 60mmcfd shallow gas from Guddu power plant to fertiliser manufacturers.”  

Among the major sectors, beverages and non-life insurance remained major gainers, increasing 5.8 percent and 0.7 percent, respectively. Chemicals, oil and gas, and food producers were the major losers over the week as they fell 3.2 percent, 1.3 percent and 1.2 percent, respectively.  

KASB Securities said JDW Sugar, EFU General Insurance, Murree Brewery, National Bank of Pakistan and Feroze1888 were the major gainers while Sui Southern Gas, Jahangir Siddiqui & Co, Allied Rental Modaraba, ENGRO Fertilizer, and Engro Foods Limited were the major losers in the benchmark index in the week.