Stocks stay negative as FDI numbers irk investors

Stocks closed in the negative on Tuesday, in line with global sell off, as investors remained depressed due to poor economic data, especially the decline in foreign direct investments reported by the central bank, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Bearish trend continued on investor concerns for weak earnings outlook.”

Oil stocks underperformed amid falling global crude prices. Economic uncertainty and concerns for foreign outflows, dismal data on FDIs declining by 35 percent during July-November 2018 played a catalytic role in the bearish close at the PSX, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.50 percent or 193.36 points to close at 38,115.81 points level. KSE-30 shares index followed suit with a low of 0.83 percent or 151.86 points to end at 18,063.89 points level.

Of 332 active scrips, 111 moved up, 194 retreated, and 27 remained unchanged. The ready market volumes stood at 90.623 million shares, as compared with the turnover of 66.826 million shares in the previous session.

Adil Ghaffar, CEO of First Equity Modaraba, said, “Without conducive environment thereby increasing ease of doing business and reducing cost of doing business, volume generation is not possible, and without generating volumes, it is not possible for any of the stakeholder to survive be it, PSX, SECP, FBR or stock brokers.”

He said volumes were drastically reduced when government increased advance tax from 0.01 percent to 0.02 percent last year. “Gross tax incidence is 33 percent and net tax incidence is 67 percent, as commission is based on quantity whereas tax is based on value,” he added.

Oil and exploration stocks were down after sharp decline in crude oil prices. All the brands declined sharply, WTI, Brent and Arab Lights fell by $1 to $2.50, which affected the local companies share.

OGDC went down 0.4 percent, PPL 2.3 percent, and POL declined 3.0 percent.

Fertiliser players closed in red after Economic Coordination Committee fixed urea price at Rs1,712/bag with an estimated subsidy of Rs2 billion in its meeting.

The market remained flat in the first half hour, however, it started to decline later and volumes remained thin. Positive triggers remained elusive, and the market registered continues declines on the back of the State Bank of Pakistan report released the other day showing decline in foreign investment numbers for the five months ended November 30, 2018.

FDI recorded a decline of 35 percent to $881 million, while portfolio investors were net sellers of equities amounting to $331 million, which was a fresh blow for the investors, an analyst said.

The highest gainers were Nestle Pakistan, up Rs300.00 to close at Rs9,150.00/share, and Pakistan Tobacco, up Rs107.69 to finish at Rs2,390.54/share.

Companies that booked highest losses were Rafhan Maize, down Rs180.00 to close at Rs6,620.00/share, and Colgate Palmolive, down Rs114.00 to close at Rs2,311.00/share.

K-Electric Limited recorded the highest volumes with a turnover of 14.288 billion shares. The scrip gained Rs0.17 to close at Rs5.97/share.

The lowest volumes were witnessed in Bank of Punjab, recording a turnover of 5.646 million shares, and losing Rs0.18 to end at Rs12.77/share.