Stocks end up after market endures rocky day of trading ahead of Panama verdict

KARACHI: Stocks struggled to extend gains after reversing early losses on Wednesday as retail investors hunkered down before the Supreme Court (SC) verdict’s outcome on Panama case due today (Thursday), dealers said.

Political uncertainty over the decision has triggered a sharp sell-off in broad risk assets in the first session, offering dip buying levels for some blue-chip shares. Investors endured a rollercoaster ride on reports that the SC will finally announced it reserved decision, sparked a bout of extraordinary volatility that roiled most of the stocks.

The Pakistan Stock Exchange’s benchmark KSE 100-share Index gained 1.56 percent or 729.11 points to close at 47,603.48 points. The highest index of the day was 47,717.65 points, while the lowest level of the day was recorded at 46,050.50 points. KSE 30-share Index also increased 1.74 percent or 433.72 points to end at 25,292.04 points.

“Announcement of Panama verdict date sparked the largest ever intraday point swing since the formation of KSE-100 index,” said analyst Adnan Sami Sheikh at Topline Securities. “In percentage terms intraday volatility was 3.56 percent, the highest since November 1, 2016 when PTI (Pakistan Tehreek-e-Insaf) called off its lockdown, which led to a 3.73 percent intraday swing.”

Sheikh said the market opened gap-down 624pts or 1.3 percent, and subsequently sunk to a low of 46,048pts due to initial panic selling. “However, the market swiftly recovered to close up as investors likely believed that the verdict (due tomorrow at 2pm) would not be against the PM (Prime Minister Nawaz Sharif),” he added.  Turnover rose 101 million shares to 265.68 million shares. Trading value increased to Rs15.28 billion from Rs9.43 billion, while market capital extended to Rs9.42 trillion from Rs9.30 trillion. Out of 373 companies, 219 increased, 136 decreased and 18 remained unchanged.

Analyst Nabeel Haroon at JS Research said recovery in the market came during the late hours as optimistic investors came in to accumulate positions at the attractive levels.

Askari Commercial Bank (AKBL) was up 5.29 percent and UBL rose 1.28 percent after declaring quarterly results.

AKBL posted one percent year on year higher earnings of Rs0.98 a share for the quarter, which was higher than the market estimate. UBL, on the other hand, announced flat earnings for 1Q2017 at Rs6.14 a share along with a dividend of Rs3/share, contrary to the market expectation of earnings decline for the quarter.

DGKC was up 1.51 percent as it garnered investor interest after posting earnings of Rs14.73/share in its nine-month result announcement.

Major contribution to the index came from OGDC (up 3.39 percent), ENGRO (rising 3.28 percent) and PPL (increasing 3.11 percent). “Going forward, we reiterate our cautious stance on the market,” Haroon advised.

Highest increase was recorded in shares of Rafhan Maize XD by Rs200 to Rs7,200/share followed by Indus Motor Co that was up Rs61.74 to Rs1,711.79/share. Major decrease was recorded in shares of Island Textile by Rs50 to Rs950/share followed by Shield Corp that was down Rs31.74 to Rs603.25/share.

Significant turnover was recorded in stocks of K-Electric Ltd, TRG Pak Ltd, Engro Polymer, Bank of Punjab, Aisha Steel Mill, Sui Southern Gas Company Limited, Dost Steels Ltd, Sui Northern Gas Company Limited, Power Cement Ltd and Dewan Motors.  K-Electric Ltd remained the volume leader with 22.40 million shares with an increase of 24 paisas to Rs8.24/share. It was followed by TRG Pak Ltd with 20 million shares with an increase of Rs1.06 to Rs50.50/share.

Turnover in the future contracts rose to 56.65 million shares from 33.77 million shares traded in the previous session.