Stocks down on economic concerns

September 21, 2021

Stocks edged lower on Monday as weak economic indicators amid security concerns kept sentiment in check ahead of monetary policy announcement, traders said.Pakistan Stock Exchange's benchmark...

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Stocks edged lower on Monday as weak economic indicators amid security concerns kept sentiment in check ahead of monetary policy announcement, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index lost 107.87 points or 0.23 percent to 46,528.21 points with the highest and lowest of the day being 46,694.50 points and 46,214.74 points.

Zafar Moti, former director of PSX, said the market remained volatile since morning, as the current account deficit and increasing value of the dollar affected the investor sentiment.

Besides, investors were expecting an increase of 50bps in the monetary policy, which was later increased by 25bps to 7.25 percent by the State Bank of Pakistan, Moti said.

He said the market was generating very low volume worth Rs8 billion or so, which was too low and it was directed towards further decline in the market.

The market would likely remain vulnerable due to weak economic indicators and law and order threats, Moti said.

He added that the abrupt cancellation of New Zealand tour had hit investor sentiments hard, as five countries including Canada, America, Australia, and England had warned about the threat.

“It is related to the Taliban flag hoisting in Islamabad,” he said adding, the futures closing was also drawing near.

KSE-30 Shares Index also shed 58.36 points or 0.32 percent to 18,421.96 points.

Ready market volume dropped 193 million shares to 194.72 million from 387.29 million shares. Trading value dropped to Rs8.07 billion from Rs16.23 billion. Market capital shrunk to Rs8.093. Of 515 actives, 135 posted gains, 365 losses, while 12 remained neutral.

Analyst Maaz Mulla at JS Research said after remaining bearish for the better part of the day, the index ended the session with a loss of 108 points.

“Going forward, we recommend investors to remain cautious with 25bps increase announced in the Policy Rate after the market hours,” he suggested. The cement sector recovered with gains recorded by PIOC (1.7 percent), CHCC (0.5 percent), MLCF (0.1 percent), and LUCK (0.7 percent) closed in the green zone.

Rafhan Maize XD was the best performer in terms of gains in value. The stock rose by Rs199.99 to Rs10,999.99/share. It was followed by Pakistan Services, up Rs91 to close at Rs1,470/share.

Nestle Pakistan emerged as the worst performer, losing Rs104.99 to close at Rs5,805.01/share, followed by Philip Morris Pak that decreased by Rs55 to Rs860 per share.

NML announced its financial result for FY21, reporting consolidated earnings per share (EPS) of Rs28.15 along with a cash payout of Rs4/share.

Agha Steel posted an EPS of Rs3.80 along with a bonus issue of 5 percent. Moreover, TGL reported earnings of Rs15.31 for FY21 along with a dividend of Rs12 per share.

Telecard Limited led volumes with 19.85 million shares. It lost four paisas to Rs22.01 per share. WorldCall Telecom with 13.36 million shares was the runner-up. The stock fell six paisas to Rs3.19 per share.

Stocks that recorded significant turnover included Byco Petroleum Ltd, TRG Pakistan Ltd, TPL Properties, TPL Corp Ltd, K-Electric Ltd, Ghani Global Holdings, Bank of Punjab, and Hum Network.

Turnover in the future contracts surged to 186.83 million shares from 94.01 million shares.

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