Stocks down as FATF fears trigger institutional selling

Stocks fell on Tuesday as sentiments remained dampened due to Pakistan’s possible inclusion in the terrorist watch list of the Financial Action Task Force (FATF), which will end its plenary session on February 23, 2018, dealers said.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower on institutional selling as investors await the outcome of the US resolution on Pakistan at the FATF for inclusion in terrorist watch list.

“Political uncertainty, dismal earnings in financial sector and global equities played a catalytic role in the bearish close at the PSX,” he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index shed 0.64 percent or 277.72 points to close at 43,294.95 points. KSE-30 shares index shed 0.8 percent or 173.77 points to close at 21,676.02 points. As many as 367 scrips were active of which 116 advanced, 234 declined and 17 remained unchanged. The ready market volumes stood at 169.709 million shares as compared with the turnover of 126.71 million shares a day earlier.

Analyst Ali Raza at Elixir Securities said equities closed negative after testing nerves and paring losses midday to recover from morning declines that pushed benchmark KSE-100 Index below 43,000 points. “Early declines were led by Oil and Gas Development Company down 0.2 percent as the stock, not being able to meet market expectations of a bigger payout, saw profit-taking reportedly from local institutions,” he added.

Financials, cements and select index heavyweights contributed to declines with Habib Bank down 2.2 percent, Hub Power down 2.2 percent, and MCB Bank down 1.2 percent, doing the most damage.

National Bank of Pakistan, down 2.4 percent also closed lower despite announcing better earnings, as investors were left disappointed by no payout.

Amreli Steels, down 2.0 percent came on investor radar after the company notified exchange of plan to modernise its existing rolling mill with an estimated cost of Rs2.0 billion that will increase the capacity from 180,000 to 275,000 MTPA, taking total re-rolling capacity to 700,000 MTPA.

Analysts expect market to remain volatile and dull until there is some clarification on the verdict due by FATF.

Companies with highest gains included Pakistan Tobacco, up Rs24.69 to close at Rs1,961.65/share, and National Foods, up Rs12.19 to close at Rs313.19/share. Companies showing most losses included Wyeth Pakistan, down Rs39.65 to close at Rs1,774.35/share, and Service Industries, down Rs25 to end at Rs850/share.

Highest volumes were witnessed in Dewan Cement with a turnover of 14.09 million shares.

The scrip gained 99 paisas to close at Rs26.89/share. TRG Pakistan was second with a turnover of 13.8 million shares. It gained 92 paisas to close at Rs36.29/share. Azgard Nine was third with a turnover of 10.9 million shares. It shed 92 paisas to close at Rs19.15/share.