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Friday March 29, 2024

Stocks slide on weak indicators, political tension

By Our Correspondent
December 27, 2018

Stocks closed in red on Wednesday after choppy trade, as weak macroeconomic indicators, lack of positive triggers, and political tensions kept the investors on the sidelines, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed bearish amid pressure in oil, banking and cement scrips on weak earnings outlook.” Investor concerns remained over terms of IMF bailout package. Foreign outflows, falling global crude prices, reports of $40 billion CPEC debt, dividends commitments, and unrest in the city played a catalytic role in the bearish close at the PSX, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.24 percent or 90.85 points to close at 38,218.07 points level. KSE-30 shares index followed suit with a low of 0.49 percent or 89.13 points to end at 17,961.45 points level.

Of 340 active scrips, 177 moved up, 137 retreated, and 26 remained unchanged. The ready market volumes stood at 88.568 million shares, as compared with the turnover of 74.655 million shares in the previous session.

An analyst from Ismail Iqbal Securities said the volatility was due to concerns over tough IMF conditions. Moreover, the news that an agreement to raise power tariff has already been finalised further dampened the market. “We expect market to be mixed in the upcoming session,” he said. The market remained choppy as investors built positions in patches, but lack of support from financial institutions and mutual funds did not allow the market to score big. Equities have been moving slowly on different developments arriving from the economic front, mainly whether Pakistan would sign an agreement with the IMF or not.

The government has given go ahead signal to increase electricity tariff by Rs1.27/unit, while Nepra proposed rise of Rs3.82/unit. The gap would be filled through further increase, which has been one of the conditions of the IMF to secure loan to help boost reserves and bail out the economy. K-Electric once again recorded hefty business over the announcement that Shanghai Electric has again sent letter to their advisors showing interest in acquiring 66.6 percent shares of the company following fulfilment of all the regulatory approvals.

Oil shares were under the hammer because of continuous decline in crude oil price. The crude oil price dipped around five percent which trimmed the shares of domestic companies with OGDC down Rs2.07, PPL Rs2.11, Pakistan Oilfields Rs10.11, and Mari Petroleum down Rs1.71. As the government transferred a sum of Rs25.7 billion into the accounts of SNGPL, up 2.7 percent, and SSGC, up 1.06 percent, investors flocked towards both the scrips.

The highest gainers were Rafhan Maize, up Rs230.00 to close at Rs6,850.00/share, and Phillip Morris Pakistan, up Rs156.00 to finish at Rs3,456.00/share. Companies that booked the highest losses were Bata Pakistan, down Rs38.00 close at Rs1,510.00/share, and Murree Brewery down Rs32.94 to close at Rs808.84/share.

K-Electric Limited recorded the highest volumes with a turnover of 12.752 billion shares. The scrip gained Rs0.01 to close at Rs6.04/share. The lowest volumes were witnessed in Pakistan Elektron, recording a turnover of 3.648 million shares, and losing Rs0.45 to end at Rs26.80/share.