Stocks end year on a negative note as new political noise weighs

Stocks sagged on Monday, ending the outgoing year on a negative note amid volatile trade, as investors stayed on guard given the ongoing economic concerns and emerging political tensions, dealers said.

Murtaza Jaffar, analyst at Elixir Securities, said going into the New Year, valuations are undoubtedly attractive.

“We however expect investors to track news flow on IMF (International Monetary Fund) program along with details of mini budget due in mid-January, before reviewing sector allocations,” Jaffar added.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.27 percent or 100.35 points to close at 37,066.67 points. KSE-30 shares index followed suit with a low of 0.58 percent or 100.25 points to end at 17,173.72 points.

Of 341 active scrips, 153 moved up, 165 retreated, and 23 remained unchanged. The ready market volumes stood at 226.060 million shares, as compared to the turnover of 174.440 million shares in the previous session.

The market got out from the wrong side of the bed to wander in the red zone till mid-session. It suffered a loss of 300 points on a political concerns emanating from a possible shakeup in Sindh government that might result in the change of the chief minister.

However, before the closure of the market the fears subsided after Minister of Information Fawad Chowdhry’s visit to Karachi was reported to have been postponed on the intervention of the Prime Minister Imran Khan.

The damage however had already been done and investors sold their positions especially in the mutual funds and banks because of yearend closing.

Foreign investors turned out to be the net sellers, as in 2018 their offloading amounted to nearly $530 million.

The stock market showed a negative return of 27 percent during 2018 and was pushed into the list of worst performing market mainly because of the economic woes, higher interest rate, foreign selling and continuous decline in foreign exchange reserves and devaluation of currency.

Topline Securities in their daily market review said for the month of December, 2018 the index was down 8 percent MoM (or -3,430 pts), where negative sentiments were fueled by political tension in the country, volatile international oil prices, uncertainty about the government entering into an IMF program, weak macros, and poor expected corporate earnings.

For December, 2018, the brokerage said, commercial banks were the worst performing sector eating away 973 points, despite the State Bank of Pakistan’s (SBP) increasing the interest rates by 150bps last month.

“Exploration and production sector was the second worst performer, chipping away 717 points, due to international oil prices hitting a 17 month low during the month,” the Topline review said.

The highest gainers were Phillip Morris Pakistan, up Rs148.90 to close at Rs3408.80/share, and Indus Motor Company, up Rs38.43 to finish at Rs1219.68/share.

The worst performers in terms of running losses were Millat Tractors, down Rs40.60 close at Rs831.99/share, and Wyeth Pakistan Limited down Rs30.00 to close at Rs960.00/share.

Silk Bank Limited recorded the highest volumes with a turnover of 23.095 billion shares.

The scrip gained Rs0.12 to close at Rs1.25/share.

The lowest volumes were witnessed in United Bank recording a turnover of 12.632 billion shares, and losing Rs5.62 to end at Rs122.64/share.