IMS Day Wrap – Levied, not again!

The sentiment at the local bourse was miserably somber throughout the day following an earlier statement issued by FinMin Ishaq Dar that the govt. will extend 4% super tax for one more year from July this year, going back on its earlier promise that it would be a one-time levy when it was imposed last year. In the budget 2015-16, the federal govt had imposed a 4%, one-time super tax on banking cos and 3% on individuals and other cos having an annual income of PKR 500mn. Obviously a negative reaction from stakeholders was felt at the exchange today where we witnessed that volumes once again dropped to 75mn shares vs 93mn on Friday. A bit of political noise resumed over the weekend as the PTI chief Imran Khan announced anti-corruption movement in Sindh & a rally in Lahore which again leaves uncertainty regarding the outcome and extent of the recent political noise.

The 100 index closed down 55 pts (-0.16%) at 33,684.56 bouncing off a significant technical support due to limited market participation. Major contribution to downside came from UBL, NESTLE, HBL, FFC and KTML meanwhile recovery off its intraday lows came from PPL, PKGS, and MARI. Although WTI traded in the red throughout the session yet OGDC, PPL and MARI managed to close in the green. PPL came back with strong performance and managed to hit intraday high of PKR 145.40.

Corporate results continue to flow in where LUCK announced unconsolidated 3QFY16 NPAT of PkR3,359mn (EPS: PkR10.39), translating into 9%YoY decline; EFERT announced unconsolidated 1QCY16 NPAT of PkR2,120mn (EPS: PkR1.59), translating into 31%YoY decline in earnings and finally AICL posted unconsolidated NPAT of PkR709mn (EPS: PkR2.03) in 1QCY16 vs. NPAT of PkR737mn (EPS: PkR2.11) in 1QCY15, down 4%YoY.

Technically speaking, the 100 index is expected to remain range bound between 33,900- 33,500.