Investors to play safe as security challenges return

Investors will continue to play safe as suspense over Panamagate case is yet not over, while worsening security situation also keeps them on tenterhooks, dealers said.  

Stocks remained under pressure during the outgoing week as futures roll-over, inconclusive Panama case, broker frauds and deteriorating security situation dampened the investor sentiments.

“Market witnessed a choppy trade this week,” said Humaira Akhtar, analyst at JS Global. “The divergent trends hopping between black and red can be attributed to security concern, Panama case, roll-over, oil price recovery and attractive results.”

The KSE 100-share Index of Pakistan Stock Exchange shed 0.74 percent or 367.71 points to close the week at 49,008 points. KSE 30-share Index inched down 0.38 percent or 103.34 points to end at 26,592.23 points.

Average daily trading volume declined nine percent to 322 million shares while foreign portfolio investors remained net sellers of equities worth $4.84 million.

An analyst at BIPL Securities said volatility gripped the index during the week and kept it from breaching the 50,000-point level.

“Major contributors towards this volatility were the Panamagate hearing, worsening law and order situation and concerns over tighter regulation of stockbrokers.”

The week started on a bearish note as risks overshadowed the company-specific positive news flows. Index heavy weight Engro continued its decline during the early part of the week amid below-the-market-expectation dividend payout of Rs4/share announced last week. However, in the later half stock recovered on the back of value buying. During the week, Dewan and Bestway cement signed a non-binding memorandum of understanding for sale of Dewan Cement’s north plant along with related assets.

Furthermore, Services Industries Ltd entered into a manufacturing and supply agreement with Total Parco Pakistan. Aisha Steel approved a revised proposal for expansion in its production capacity.

During the week, results of some blue-chips were released which garnered mixed reactions from the investors. HUBCO announced earnings per share (EPS) of Rs4.38 and a dividend of Rs1.50/share for the six-month period, while KAPCO announced EPS of Rs4.74 along with a dividend of Rs4.30/share.

On the last session of the week, Nishat Chunian Power posted EPS of Rs1.76; however, the management did not announce any cash dividend with the result, which led to some heavy selling in the stock.