Pakistan stocks close down on profit-taking

Stocks on Wednesday closed lower in the fifth consecutive sessions as investors turned to profit-taking after early gains fuelled by the regulator’s decision on margin trade financing, dealers said.

Analyst Ahsan Mehanti at Arif Habib Limited said stocks ended down in the post-earnings season. “Mid-session rally after the Securities and Exchange commission of Pakistan’s approval to review of financing by broker firms invited investor interest in second- and third-tier stocks,” Mehanti said. “However, foreign outflows, uncertainty in global stocks and concerns over rising circular debt dragged the index down.”

The KSE 100-share Index of Pakistan Stock Exchange shed 0.30 percent or 147.78 points to close at 48,375.63 points. KSE 30-share Index fell 0.44 points or 114.49 points to end at 25,742.61 points. As many as 396 shares were active; of which 163 increased, 209 decreased and 24 remained unchanged.  The ready market volumes stood at 272.27 million as compared to 218.176 million shares a day earlier.

Analyst Ali Raza at Elixir Securities said equities closed fifth consecutive sessions lower in a volatile trading as morning gains gave a way to profit-taking in the wider market. “Market opened positive as investors cheered a positive development on leverage product when the regulator approved recommendations of a committee formed to review margin financing rules,” Raza said. “Moreover, modest gains in global crude prices also helped the uptrend with the index heavy oil sector coming under the investor radar.”

The committee suggested the regulator to allow banks to lend funds to investors via brokers through introducing reforms in the margin financing system, withdraw the requirement of collection of 10 percent financing participation ratio (FPR) in the form of cash and allow deposit of FPR in the form of securities.

The benchmark Index, which surged as much as 0.8 percent in early hours, however, couldn't sustain the gains with political concern proved a likely trigger to profit-taking.  Mari Petroleum, up five percent, contributed most points to the index on reported institutional buying, while the index heavy Habib Bank, down 1.7 percent, contributed most to the day’s losses.

Analysts see volatility to persist. They, however, said better participation is likely in the coming days with quarterly earnings season just around the corner and the ongoing futures rollover week coming to an end. Companies, reflecting highest gains, included Phillip Morris Pakistan up by Rs123.69 to end at Rs2,597.50/share and Nestle Pakistan rising Rs90 to close at Rs9,100/share.

Companies, with highest losses, included Rafhan Maize down Rs250 to close at Rs7,400/share and Wyeth Pakistan falling Rs111.68 to end at Rs2,678.18/share.

Highest volumes were witnessed in Azgard Nine with a turnover of 27.86 million shares. The share shed 53 paisas to end at Rs12.21/share. Bank of Punjab was the second with a turnover of 23.44 million shares. It fell 65 paisas to close at Rs16.05/share. Power Cement was the third with a turnover of 16.509 million shares. It gained 69 paisas to finish at Rs20.32/share.