Market’s negative tone set by Engro Corp – Elixir Research
By: Faisal Bilwani,
Elixir Securities Pakistan (Pvt.) Ltd.
Pakistan equities closed the first day of the week negative with lack of interest in broader market despite a string of earnings announcements. Negative tone was set by Engro Corp ENGRO PA -2.3% that came under pressure in morning trade on news that govt will reshuffle gas allocations to counter electricity load shedding. Stock never showed signs of recovery after 1Q EPS PKR3.49 that were released today and were marginally lower than street estimates. Banking giants National Bank NBP PA -4.26% and MCB Bank +0.14% also released 1Q earnings at EPS PKR1.64 -20%QoQ -25% YoY and EPS PKR5.7 +35% QoQ and 2% YoY respectively with former closing under pressure on earnings that were slightly below Elixir and street expectations. Lucky Cement LUCK PA -.3% failed to generate interest despite an impressive quarterly result taking nine month earnings to PKR21.59/sh +49% YoY.
Expect selective interest with small and mids leading volumes charts as institutional interest including foreign flows gradually decline ahead of general elections. Advise caution and long positions in fundamental plays and reducing high beta small and midcap speculative names.