Friday December 08, 2023

Stocks hold above 57,000 level, tariff uncertainty dampens sentiment

By Our Correspondent
November 21, 2023
Digital monitor showing the share prices at the Pakistan Stock Exchange (PSX) in Karachi. — INP/File
Digital monitor showing the share prices at the Pakistan Stock Exchange (PSX) in Karachi. — INP/File

Stocks ended slightly higher on Monday, holding above the 57,000-point level, as investors awaited a government decision on whether to hike industrial gas and power tariffs under the IMF program, dealers said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index edged up 14.80 points or 0.03 percent to 57,077.96 points, after touching a high of 57,309.27 points and a low of 56,738.40 points. The KSE-30 index fell 68.43 points or 0.36 percent to 18,978.40 points.

Trading volume dropped to 718.3 million shares from 901.6 million shares in the previous session, while trading value decreased to Rs16.7 billion from Rs23.4 billion. Market capital rose to Rs8.295 trillion against Rs8.281 trillion. Out of 377 companies active in the session, 202 closed higher, 161 lower and 14 unchanged.

“Stocks closed flat amid pressure on the government decision on a further hike in industrial gas and power tariff under the carry-on IMF programs and slump in global crude oil prices,” said analyst Ahsan Mehanti at Arif Habib Corp.

He said the completion of the IMF’s first review for a nine-month standby arrangement, paving the way for $700 million support and further credit from China and bilateral agencies, played a catalytic role in a positive close.

Analyst Ali Najib at Topline Securities said stocks had an interesting day where bullish and bearish forces fought the whole day to put their rein on market direction and ultimately bulls successfully managed to claim the day.

"The aforesaid market behaviour can be attributed to the first day of NOV-Future contract rollover week commencement where over Rs18 billion of positions will get rolled over by Friday," Najib said. "This rollover activity may likely keep the recent bull run in check for the next couple of sessions. In addition, an over 4 percent rally in international oil prices over Friday evening also put some weight on cyclical stocks' strong momentum."

Resultantly, some profit taking has been observed in cement, E&P, tech, fertilizer and power sector stocks as LUCK, OGDC, SYS, ENGRO, PPL & HUBC lost 154 points, cumulatively whereas DAWH, UBL & MEBL contributed positively to the index by adding 109 points.

The highest increase was recorded in Rafhan Maize, which rose by Rs721.59 to Rs10,342.84 per share, followed by Hoechst Pak Ltd, which increased by Rs67.50 to Rs967.50 per share. A significant decline was noted in Unilever Foods XD, which fell by Rs499.85 to Rs22,500.15 per share, followed by Nestle Pakistan, which decreased by Rs100 to Rs8,500 per share.

Brokerage Arif Habib Ltd said the beginning of the week witnessed a relatively flat session in the PSX, marked by nuanced movements among listed companies.

"Of particular note is the ongoing correction in the cement sector," the brokerage said. "This correction is expected to create fresh buying opportunities, with prices likely to settle around 5 percent below their current levels. Investors are keenly watching this space for potential entry points and strategic investments."

K-Electric Ltd. remained the volume leader with 89.794 million shares which closed higher by 26 paisas to Rs3.55 per share. It was followed by WorldCall Telecom with 64.623 million shares, which closed higher by 3 paisas to Rs1.62 per share.

Other significant turnover stocks included Fauji Foods Ltd, Pak Elektron, Hum Network, TPL Properties, Ghani Glo Hol, Sui South Gas, Pak Refinery and Fauji Fert Bin. Shares’ turnover in the future contracts increased to 258.030 million shares from 172.714 million shares.