Stocks down as IMF worries worsen

Stocks slipped on Wednesday as investors remained cautious about further conditions by the International Monetary Fund (IMF) for revival of its loan programme, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 501.88 points or 1.23 percent to 40,376.10 points against 40,877.98 points recorded in the last session. The highest index of the day remained at 40,998.39 points while the lowest level of the day was recorded at 40,352.46 points.

“Stocks fell sharply lower on reports of IMF conditions over the completion of remaining points regarding energy subsidy withdrawals and ensuring fund receipts from supporting friendly countries,” Ahsan Mehanti, analyst at Arif Habib Corp said.

He added that an uncertainty over impact of IMF staff-level agreement on industrial profits, and political noise played a catalyst role in the bearish close. KSE-30 index also decreased by 172.28 points or 1.14 percent to 14,915.75 points compared with 15,088.03 points recorded in the last session.

Traded shares increased by 6 million shares to 148.452 million shares from 142.804 million shares. The trading value dropped to Rs3.917 billion from Rs4.177 billion. Market capital narrowed to Rs6.172 trillion from Rs6.235 trillion. Out of 320 companies active in the session, 64 closed in green, 229 in red and 27 remained unchanged.

Muhammad Arbash, analyst at Topline Securities, said equities closed negative where the benchmark KSE100 Index settled at a 40,376 level (down 1.23 percent). “Anticipation of a rate hike in upcoming monetary policy due on 4th April 2023 led the market to make an intraday low of 525 points,” he said.

Major negative contributors in today’s trading session were PPL, OGDC, SYS, TRG and ENGRO cumulatively dented the Index by 154 points.

The highest increase was recorded in shares of Sapphire Fiber, which rose by Rs66.61 to Rs954.79 per share, followed by Pak Tobacco, which increased by Rs50.05 to Rs717.60 per share. A significant decline was noted in shares of Unilever Foods, which fell by Rs331 to Rs17,925 per share, followed by Nestle Pakistan, which decreased by Rs180.85 to Rs5,000.15 per share.

Brokerage Arif Habib Ltd said a negative session was witnessed at the PSX on Wednesday. The KSE-100 opened with positive numbers but sentiment soon shifted in favour of the bears as the market traded in the red zone for the majority of the trading session.

Due to the delay in signing a staff level agreement between the government and the IMF, as well as the prevalent macroeconomic uncertainty, investors chose to stay cautious, causing the index to fall to an intraday low of -525.27 points, it reported. Volumes remained flat across the board, with 3rd tier stocks remaining in the limelight.

Sectors contributing to the performance included E&P’s (-73.3 points), cement (-72.6 points), technology & communication (-59.7 points), commercial banks (-53.9pts), and miscellaneous (-48.6 points).

Fauji Cement remained the volume leader with 17.487 million shares which decreased by 19 paisas to Rs11.81 per share. It was followed by WorldCall Telecom with 11.071 million shares, which decreased by one paisa to Rs1.21 per share.

Other significant turnover stocks included Thatta Cement, Fauji Foods Ltd, Ghani Glo Hol, Telecard Limited, Hascol Petrol, Meezan Bank XD, Cnergyico PK and Maple Leaf.

Shares’ turnover in the future contracts increased to 37.411 million shares from 34.025 million shares.