Stocks extend losses as investors remain cautious on FATF outcome

Stocks closed almost one percent down on Wednesday continuing the bearish spree for the third consecutive day as investors remained sceptic about Pakistan’s inclusion in the Financial Action Task Force (FATF) watch list, deteriorating macros and dismal corporate earnings, dealers said.

Topline Securities in its post-market note said the uncertainty kept investors on the sidelines despite Foreign Minister Khawaja Asif’s tweet the other that no consensus has been reached to include Pakistan in the watch list.

“The negative sentiment aggravated further by selling seen in banks, and concern on any unfavourable decision against non-compliance of anti-money laundering laws of US,” the brokerage said in its report.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index shed 0.87 percent or 375.17 points to close at 42,919.78 points. KSE-30 shares index shed 1.23 percent or 266.87 points to close at 21,409.15 points. As many as 350 scrips were active of which 156 advanced, 177 declined and 17 remained unchanged.

The ready market volumes stood at 188.06 million shares as compared with the turnover of 169.709 million shares a day earlier.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed lower on concerns over economic uncertainty amid rising current account deficit, which clocked in at $9.156 billion for July-January FY18.

“Institutional support was witnessed in textile scrips on reports of likely extension of EU GSP Plus status. However, surging budget deficit, uncertainty in global equities and uncertainty over outcome of US motion by FATF this weekend played a catalytic role in the bearish close at the PSX,” he added.

Pakistan State Oil declined 2.2 percent and Allied Bank declined 1.2 percent as the companies posted below expectation corporate earnings.

The market took negative bets on large cap banks including Habib Bank, down 1.75 percent and United Bank, down 3.9 percent.

Disclosure of contingent liability in recently released financials of a major bank, pertinent with scrutiny from Federal Reserve New York on account of anti-money laundering, caused panic among investors and the scrip saw selling pressure.

Companies with highest gains included Hinopak Motor, up Rs38.1 to close at Rs1,231.10/share, and Millat Tractors, up Rs18.52 to close at Rs1,291.73/share.

Companies showing most losses included Rafhan Maize, down Rs100 to close at Rs6,900/share, and Wyeth Pakistan, down Rs55.62 to end at Rs1,718.73/share.

Highest volumes were witnessed in Azgard Nine with a turnover of 15.26 million shares. The scrip shed Rs1.0 to close at Rs18.15/share. Lotte Chemical was second with a turnover of 9.5 million shares. It gained 12 paisas to close at Rs8.83/share. TRG Pakistan was third with a turnover of 9.3 million shares. It gained 49 paisas to close at Rs36.78/share.