Investors may return; blue chips in focus

Earning announcements by blue-chip tickets can lure investors back next week as major energy and financial stocks may beat the market expectations, analysts said.  

“International crude oil and majority stocks have declined to the technical buying level,” an analyst said. “The situation may encourage investors to take positions next week.”

Pakistan Stock Exchange’s benchmark KSE 100-share Index lost 1,014.82 points, or 3.12 percent, to close at 31,464.16 points on Friday last.  The average daily volumes dropped two percent to 140.8 million shares in the last week. Average daily value fell seven percent to eight billion rupees.

A Topline Securities’ report said foreigners were net sellers of $17.3 million during the last week. They made a net buying of three million dollars in cement sector and sold banks and oil and gas exploration stocks worth (net) $9.6 million and $6.5 million, respectively.

The analyst said the local bourse came into rebounding mode in late January after edging down the 31,000-points level. At present, the market stands to that level.

Similar is the case with the international crude oil prices, which modestly recovered on Friday after hitting 12-year low. The recovery was seen after Saudi Arabia, a leading member of Oil Producing and Exporting Countries, showed it consent to cut excessive oil supplies to improve pricing.

Besides, the continued decline in US crude oil production for the last several weeks may extend the much-needed support to fragile prices.

KASB Securities, in a commentary, said global developments, particularly oil prices, will remain key concerns for the market players. However, earnings announcement of several heavyweights, including key exploration and production companies, banks, Engro Corporation and DG Khan Cement next week may trigger some excitement.  OGDC and PPPL, Lucky Cement, UBL and NBP will also announced their financial results during the next week.

Elixir Securities agreed that the financial result season might set the direction for the coming week, while investors are also expected to keep track of developments in regional markets as well.

Saeed Ahmed Khan at JS Global Research, disagreed with the forecast, saying, “We expect a continuation of the negative trend as corporate results, which were just in line with expectation, failed to excite the bulls.”  Household goods and financial services were among the top gainers during the last week, rising 3.3 percent and three percent, respectively. Beverages, automobile and parts and oil and gas were among the major losers as they fell 6.1 percent, 5.6 percent and 4.8 percent, respectively.

KASB Securities said Jahangir Siddiqui & Company, Ghani Glass, Feroze1888, Pakistan Oilfields and Sui Northern Gas Ltd were the major gainers, while Kohinoor Textile, Ferozsons Laboratories, Pak Suzuki Motors, Pak Elektron Limited and Rafhan Maize were the major losers on the benchmark index.