By: Elixir Securities Pakistan Private Limited
KSE100 INDEX: Pakistan equities closed negative, breaking a six day green closing streak on healthy turnover on a day that tested nerves. Stocks opened positive however institutional selling dragged index to red with financials taking the most hit as investors firm view on 100bps cut in discount rate over the weekend. Small caps led volumes on retail participation while wider market witnessed selective interest with Lafarge Pakistan LPCL PA +1.4% closing green and leading volumes after Bestway Cement announced public offer to acquire ~175mn shs of LPCL at PKR19.42/sh.
Pakistan State Oil PSO PA -1.5% closed negative as investors are somewhat disappointed over funds release to ease circular debt post fuel crisis while Engro Foods EFOODS PA -2.6% ended third negative day after gaining little over 20% month to date.
We see volatile market driven by newsflow/rumors over central bank’s policy announcement with 100bps in our view more or less priced in. Any surprise will lead to sharp moves early next week and we recommend caution at current levels with selective buying advised in yield plays including E&Ps.