Stocks fall on IMF’s tough stance over unlocking bailout funds

Our Correspondent
February 04, 2023

Stocks closed lower on Friday after a statement from PM Shehbaz Sharif that the IMF was giving tough time to the nation over sanction of the loan, which also affected the Pak rupee in the market,...

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Stocks closed lower on Friday after a statement from PM Shehbaz Sharif that the IMF was giving tough time to the nation over sanction of the loan, which also affected the Pak rupee in the market, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 262.35 points or 0.64 percent to 40,471.16 points against 40,733.51 points recorded in the last session. The highest index of the day remained at 40,874.65 points while the lowest level of the day was recorded at 40,332.35 points.

“Stocks fell sharply lower after a slump in the rupee on PM statement that IMF giving nation tough time to loan,” Ahsan Mehanti, analysts at Arif Habib Corp said.

He said a plunge in exports by 15.4 percent year on year in Jan’23, the State Bank of Pakistan reserves falling to record low at $3.09 billion, and an uncertainty over the outcome of Pak-IMF 9th review mission talks amid a slowdown in inflows, circular debt, debt servicing, high inflation played a catalyst role in the bearish close. KSE-30 index also decreased by 67.20 points or 0.44 percent to 15,162.58 points compared with 15,229.78 points recorded in the last session.

Traded shares dropped by 19 million shares to 105.053 million shares from 124.087 million shares. The trading value decreased to Rs4.181 billion from Rs6.120 billion. Market capital narrowed to Rs6.352 trillion from Rs6.389 trillion. Out of 320 companies active in the session, 116 closed in green, 182 in red and 22 remained unchanged.

Nabeel Haroon, analyst at Topline Securities, said KSE 100 Index opened on a positive note and gained to make an intraday high of 139 points. However, the market came under pressure in the second half of the trading session as the rupee depreciated against the dollar (today’s closing Rs276.58) in interbank which can largely be attributed Prime Minister’s statement that IMF is giving a tough time to Pakistan in ongoing bailout negotiation.”

The top positive contribution to the index came from HUBC, POL, GATM, HBL and LOTCHEM, as they cumulatively contributed 63 points to the index. On the flip side PSEL, ENGRO, SYS, OGDC and PPL lost value to weigh down on the index by -187 points.

The highest increase was recorded in shares of Nestle Pakistan, which rose by Rs64 to Rs5,364 per share, followed by Bata (Pak), which increased by Rs47 to Rs1,795 per share. A significant decline was noted in shares of Pak Services, which fell by Rs145.35 to Rs1,792.65 per share, followed by Sapphire Tex., which decreased by Rs80 to Rs1,020 per share.

Brokerage Arif Habib Ltd said the week wrapped on a dismal note for PSX, as the market closed in the red at the closing bell. “The benchmark KSE-100 index had a range-bound opening session as the investors’ activity remained sluggish owing to the prevailing ambiguous political environment in the country,” it reported. The second session began with the same negative sentiments, with the USD beating the PKR in the interbank market, further eroding investor confidence as the index hit an intraday low of 403.76 points. Across the board, volumes remained reasonable.

Sectors contributing to the performance included miscellaneous (-82.8 points), fertilizer (-61.6 points), technology & communication (-35.9 points), commercial banks (-35.6 points), and E&P’s (-29.0 points).

Hub Power Co. remained the volume leader with 7.912 million shares which increased by Rs1.49 to Rs67.03 per share. It was followed by Cnergyico PK with 7.490 million shares that closed lower by 13 paisas to Rs3.72 per share.

Other stocks that recorded significant turnover included Dewan Motors, Gul Ahmed, WorldCall Telecom, TRG Pak Ltd, Lotte Chemical, K-Electric Ltd., Pak Petroleum and Nishat ChunPow. Shares’ turnover in the future contracts decreased to 26.865 million shares from 30.061 million shares.

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