Market Close !

Pakistan equities traded range bound with index closing down 9 points at 9159 on concerns of escalating terror threat as military aggressively hunts terrorists in SWA region. Sentiment remains weak as local institutions follow a cautious approach and avoid taking fresh positions on the last day of the month. Hub Power HUBC PA, a defensive high yield play continued to decline as rumors of circular debt related issues (Non-Sharia i.e. Islamic compliance and fear of Islamic funds selling) did rounds. We disagree with any such argument and are of a firm view that stock is bearing the brunt of supply demand imbalance and strongly advise taking advantage of the current weakness. Lucky Cement's first quarter results that grew by over 14% to EPS PKR3.41 kept interest alive even though top line margins dropped by over 400bps. Moreover, PTC's quarterly earnings at EPS PKR0.5 that beat market estimates failed to cheer with stock closing negative.

Results over the weekend of PPL and NBP to be announced Monday morning prior to market open will set the tone early next week. We expect market to remain sensitive to successes on the ongoing military operation and political developments related NRO (National Reconciliation Ordinance that gives legal cover to many in the current administration). Furthermore, FII flows are also a key to the short-term direction of the market.