IMS Day Wrap – WTI, Brent & Arab Light … living the dream!
In a nut shell we can safely say there were two sessions today: 1st session started with a rally in crude oil dominating the market sentiment. Every E&P name went ballistic, with POL & PPL hitting upper circuits right from the word go. Thanks to IEA which earlier said that 2016 would see the biggest fall in non-OPEC production in a generation (almost 25 years), helping re-balance a market that has been dogged by oversupply. As per global review by IEA "this year, we are expecting the biggest decline in non-OPEC oil supply in the last 25 years, almost 700,000 barrels per day"(current consumption is 93.7mn bpd). The U.S. accounts for the bulk of non-OPEC's 2016 oil supply contraction of 700,000 barrels per day forecast. If the decline in the U.S. oil supply proves insufficient to tighten balances, then the oil price will remain low. At the same time, global demand growth is in a hectic pace, led by India, China and other emerging countries.
2nd session: As soon as the news hit the media and newspapers that in an unparalleled move, Chief of Army Staff General Raheel Sharif dismissed 12 army officers from service over charges of corruption on Thursday including 1 Lt. General, 1 Maj. General, 5 Brig. Generals. The development comes two days after the COAS said "across the board accountability is necessary for the solidarity, integrity and prosperity of Pakistan", adding that the war against terror cannot be won unless "the menace of corruption is uprooted". After an initial knee jerk reaction investors regrouped their sentiment and the market was able to bounce back from its lows.
Following a volatile day today, the 100 index closed down 47.71 pts (-0.14%) at 33,572.13. From daily traded value perspective top companies were: OGDC US$ 12.5mn; HBL US$ 9.3mn; PAEL US$ 7.6mn; MARI US$ 6.7mn and DGKC US$ 6.6mn. Major contribution to downside towards the end came from MCB (-22pts), ENGRO (-21pts) and FFC (-19pts). From participation perspective the retail favorites like DFML, BYCO and PACE dominated the scene.
Technically speaking, 34k still stand as a strong resistance for the time being.