KARACHI: The KSE-100 index snapped its winning streak in the week ended on Friday to close down by 201 points (0.59 per cent) at 33,767.

Strong earnings an­­nouncements by the refineries and oil and gas could not counter the negativity arising from the political noise and investors resorted to profit-taking in range-bound activity.

Moreover, central bank kept the interest rates unchanged, which added to the bearish sentiments.

Analysts at brokerage Arif Habib Ltd commented that several international markets remained befuddled with looming concerns over ‘Brexit’ and the unfortunate Japanese earthquake.

Foreign investors found solace in the MSCI EM and FM, which have witnessed foreign inflows in recent times, gaining 3.5pc and 1.5pc week-on-week, respectively. On the local facade, the equity market swayed from domestic political apprehensions.

Average daily volume fell 31pc to 190.3 million shares from 275.2m shares traded the preceding week and average daily value declined 18pc to Rs8.7 billion.

Topline Securities observed that foreign investors were net sellers of $1.5m worth stocks during the week against $0.5m outflow the earlier week (adjusted for payment for acquisition of shares of Hascol Petroleum Ltd).

Cement stocks continued to attract foreign funds’ attention with net buying worth $3.9m, while net selling of $7.4m was seen in the banking stocks.

During the week, the household goods topped the gainers list as it rose 11.4pc. Other gaining sectors included personal goods and oil and gas, which rose 1.4pc and 1pc, respectively. Tobacco and fixed-line telecommunication shed the most value as they declined 14.6pc and 8.9pc, respectively.

“The dull market performance reflected investors’ cautious stance with regards to political uncertainty despite rebounding crude oil prices, positive results from refineries and unchanged interest rate,” stated analysts at KASB Securities who identified National Refinery, Pakistan Oilfields, Colgate Palmolive, Archroma Pakistan Ltd and JDW Sugar as major gainers and Pakistan Tobacco, Faysal Bank, Gul Ahmed Textile, Orix Leasing and Sui Southern Gas as the major losers.

On a week-on-week basis, performance leaders were: POL (8.26pc), SNGP (2.05pc), UBL (1.98pc), NCL (1.92pc) and AGTL (1.36pc); while laggards included: DAWH (4.72pc), EPCL (4.08pc), PTC (3.22pc), FATIMA (3.12pc) and LOTCHEM (2.58pc), according to AKD Securities.

Volume leaders were: TRG 131.6m shares, BYCO 80.3m, JSCL 51.7m, DCL 42m and DCH 33.4m.

Key news flows included: Vitol Dubai Ltd completed acquisition of 18.1m (15pc) of voting shares of HASCOL as per exchange filing, joint session of parliament passed “The Pakistan International Airlines Corporation (Conversion) Bill” to convert the national carrier into a public limited company, PM laid foundation stone of two power plants of 660MW in Thar as the Sindh government reached financial close of 660MW Thar-Coal Power Project at Block-II and Fitch Ratings affirmed Pakistan at ‘B’ with stable outlook.

OUTLOOK AND RECOMMENDATION: Analysts expect the oil producers meeting in Doha on Sunday (today) to determine the course of oil trajectory in the upcoming weeks and hence the index heavyweight oil stocks.

Concurrently, the lead up to the June 2016 announcement of Pakistan’s potential reclassification to the MSCI EM index coupled with budgetary propositions could keep the market moving, though most analysts advised investors to stick to fundamentally strong scrips.

Analyst Faizan Ahmed at JS Global said that the results season brought some surprises last week with Pakistan Oilfields producing above consensus 3QFY16 earnings per share of Rs9.17.

“Some major firms such as FFBL, LUCK, HBL and MCB, are to unveil results in the upcoming week which could contribute in restoring the market’s vigour,” analyst said.

The KSE-100 index is currently trading at price-to-earnings (PE) multiple of 8.5 times 2016 earnings against Asia-Pacific regional average of 13.9 times.

Published in Dawn, April 17th, 2016