IMS Day Wrap – All Time High for KSE-100

On an all-time high, we'll take on the world and wait;
So hold on tight, let the flight begin!

-Octopussy (1983)

The 100 index resumed its north bound journey today, once again on the back of jovial mood dominating the market sentiment in the light of upcoming MSCI upgrade to EM. Towards the end the 100 index closed up 261.30 points (+0.72%) at 36,234.99. Market participation on the flip side shrunk to 149mn shares from 218mn in the previous session. Major contribution to upside came from MSCI EM eligible names like UBL (44 pts), FFC (31pts) and OGDC (27 pts). While PAKT, HBL and NESTLE brought the index down by 35 points. Just for the record, the 100 index closed above its all-time high (on closing basis) of 36,228.88 points posted on 6th August, 2015

Oil prices surged more than 2%, providing the much needed impetus to energy plays in general, on the back of wildfires in Canada outweighing the surprise over the exit of Saudi Arabia's veteran oil minister Ali al-Naimi. OMCs also fared well as ECC gave approval to the revision of margins of OMCs and Dealers on petroleum products. More importantly they will be linked to the CPI and will be revised every quarter. As such, OMCs have overcome a major profitability hurdle at the apparent cessation of a rigid fixed-margins regime. Pharmaceuticals also remained in the limelight today as the DRAP is all set to allow pharmaceutical companies to increase drug prices for the second time in less than six months. KAPCO and MARI witnessed renewed interest after CCoP accorded approval for divestment of Government’s Residual Shareholdings in these names. Banking giants MCB and HBL remained buoyant in the wake of rising inflation and expectations of interest rate hike later this year. Autos and Cements, on the contrary, staged a pull back with major pressure seen in KOHC, CHCC and MLCF within the cement universe while INDU, PSMC, GHNL and GHNI also failed to draw investors out of the closet.

Technically speaking, the 100 index is hovering close to its all-time intraday high of 36,471, a healthy point to consider consolidation. Once it moves past this point it can hit upper channel resistance at 38,000.