Market Summary for 25 May 2017

Market witnesses profit taking after recent bullish trend

After strong rally since the start of the week, the market finally witnessed selling pressure today on profit taking reportedly by foreign investors and mutual funds. In particular, MSCI EM constituent stocks that witnessed bull run previously such as UBL (-2.37%), MCB (-2.22%) and OGDC (-1.16%) were major laggards today. Fertilizer sector was down ahead of the monthly data released towards the end of the day today, which depicted a further 10% increase in the surplus urea inventory. Steel sector, on the other hand, outperformed the market. Cement scips remained up on the expectation of higher allocation to PSDP in the Budget FY18 which will likely give a boost to the sector.
Recommendation and outlook:
 We expect the market to remain range bound before Pakistan’s inclusion in MSCI EM Index on June 1, 2017.
Events ahead: 
Federal Budget FY18 announcement (May 26, 2017) 
HCAR Result announcement (May 30, 2017)

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