IMS Day Wrap – Simply Drunk!

E&P remained the stalwart for today once again on the back of +3% rally in crude oil prices. A huge wildfire near Canada's oil sands region and escalating tensions in Libya have stoked concern among investors over a near-term supply shortage, driving crude prices up for the first time in a week. The crude oil market is becoming much more sensitive to supply disruptions. Following their technical breakouts and today’s rally in crude oil, OGDC and MARI closed up on upper circuit once again.

Looking back at history, we have always been extremely reactive to news stimuli in a similar manner like we have seen recently, making the market practically un-tradeable either ways; “Our bad!”. Well we and the market have been talking about the MSCI upgrade for a long time, and our strategy for Pakistan was titled MSCI, light my fire dated 7th January, 2016 (kindly revisit if you get a chance). The D-day is now ever closer with MSCI announcing 14th June, 2016 as the result date for its 2016 annual market classification review as per their latest press release.

After heading north throughout the session the 100 index closed up +623.91 pts (+1.74%) at 35,941.47; just inches away from our 36,400 index target. Major contribution to upside came from HBL (102 pts), OGDC (81 pts), LUCK (69 pts), MCB (66 pts), PPL (34 pts) and ENGRO (28 pts). From sector perspective energy plays were in the limelight along with Fertilizers, Cements, Banks, Multi-utilities and Pharmaceuticals. Food products (NATF, RMPL, EFOODS) and beverages (MUREB) were the odd ones out while EFUL, NATF, KOHC, FCCL and SCBPL dragged the 100 index down by 18 points.

Technically speaking, from its low posted on 23rd February, the 100 index is up 18.71% heading closer to its 100% retracement at 36,471. In the end we must say, sanity should prevail~!