LAHORE  -  After a day's breather, Pakistan equities returned to negative territory, with index down by 237 pts to close at 40,522 level. Even the news of narrowing trade deficit could not allay the concerns of market, with participants unwilling to take fresh exposure in Pakistan equities ahead of mini budget (expected on coming Friday) by the new govt., in our view.

Oil and gas exploration companies were favoured by the market due to increasing oil prices, with the sector adding 58 points to the index. However, the market was dominated by investor activity in Cement, Fertilizer and Commercial Banks, that cumulatively deleted 158 points from the index. Cement and Fertilizer sector continue to be under pressure due to news regarding decisions being made by the new government. The former is expected to feel the brunt of any reduction in PSDP allocation while the latter is expected to suffer due to allowance of imported urea. Furthermore, dismal auto numbers for the month of Aug 2018 (passenger cars down 20% YoY), kept the automobile assemblers under pressure with the sector contributing 23 points to index decline.

Shabbir Tiles and Ceramics (STCL) announced its 4QFY18 result posting EPS of Rs0.34 vs. LPS of Rs0.11 in the similar period last year. Bottom-line of the company improved due to 1) higher sales by 29% YoY, 2) improved gross margins by 11ppts YoY to 21% and 3) lower financial charges by 30% YoY. Amreli Steels (ASTL) posted its 4QFY18 result with EPS of Rs1.98 up 131% YoY. Although gross margins for the company declined by 10ppts YoY to 13%, higher sales by 47% YoY and significant increase in other income by 46x times YoY pushed bottom-line of the company up.