Stocks fall; MSCI semi-annual review affects shares

Stocks closed down on Tuesday after the US index provider MSCI dropped blue-chip Engro from the  emerging market index in its semi-annual review, dealer said.

They added that issuance of non-bail-able arrest warrants of the finance minister and verdict being reserved regarding the disqualification case against Imran Khan kept participation on lower side.

The Pakistan Stock Exchange’s KSE-100 shares index shed 0.72 percent or 296.11 points to close at 40,943.78 points. KSE-30 shares index shed 0.82 percent or 172.41 points to close at 20,835.45 points. As many as 373 scrips were active of which 139 advanced, 207 declined and 27 remained unchanged. The ready market volumes stood at 140.08 million shares as compared with the turnover of 87.44 million shares a day earlier.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower amid improved trades following MSCI Index provider reduced Pakistan’s weight to 0.08 percent from 0.14 percent in Global Standards Index effective November 30, 2017, deleting three corporate and down grading Engro to small cap.

“Investor support in selected oil, fertilizer and auto stocks on higher global crude prices, surging fertilizer prices invited mid-session support,” Mehanti said. “However, uncertainty over outcome of the SC hearing on NAB petition against former prime minster and economic uncertainty amid rising trade deficit played a catalytic role in bearish close.”

An analyst at Arif Habib Limited said the index saw another day in red. “Selling pressure was witnessed in Engro which eroded 85 points from the benchmark index due to down gradation from MSCI mid-cap index to small cap index.”

On a scrip wise basis, decline was led by ENGRO down 5.0 percent, Oil & Gas Development Company (OGDC), down 2.15 percent, Dawood Hercules (DAWH), down 5.0 percent, MCB Bank (MCB), down 1.98 percent and Pakistan Petroleum (PPL), down 1.3 percent. On the other side, top stocks that remained in green were Habib Bank (HBL), up 1.1 percent, Hum Network (HUMNL), up 5.0 percent and Nestle Pakistan, up 1.3 percent.

The reduction in Pakistan’s weight in the MSCI semi annual review was broadly expected. As such, analysts expect market sentiment to likely continue being dictated by the local front where current political and economic uncertainty is likely to keep market under pressure. Companies reflecting highest gains include Nestle Pakistan up Rs150 to close at Rs12,000/share and Sapphire Textile up Rs40 to close at Rs1,899.95/share. Companies reflecting most losses include PTC down Rs38 to close at Rs1,200/share and Bhanero Textile down Rs34.74 to end at Rs660.26/share.  

Highest volumes were witnessed in Azgard Nine with a turnover of 18.57 million shares. The scrip gained 70 paisas to close at Rs15.06/share. Unity Foods (Rights) was second with a turnover of 14.449 million shares. It gained 63 paisas to close at Rs4.93/share. TRG Pakistan was third with a turnover of 8.8 million shares. It gained 64 paisas to finish at Rs35.14/share.