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Tuesday March 19, 2024

Stocks manage to stay afloat as funds bag bargains

By Our Correspondent
July 12, 2018

Stocks on Wednesday managed to stay afloat for the second consecutive session as some of the fund houses ventured headlong into scrips that were up for grabs at attractive levels following a sizable correction since the start of the fiscal year, dealers said.

Ahsan Mehanti at Arif Habib Corporation said the capital market closed higher led by the earnings’ season rally at the apex bourse on investors’ speculations ahead of financial results due later this week.

“Credit Suisse report on likely IMF (International Monetary Fund) bailout, economic reforms post elections, and upbeat data on remittances for July-June FY2018 catalysed a bullish close," Mehanti added.

Pakistan Stock Exchange’s (PSX) KSE-100 shares index rose 0.34 percent or 133.95 points to close at 39,586.76 points, while KSE-30 shares index increased 0.39 percent or 75.79 points to finish at 19,493.51 points. Of 344 active scrips, 181 advanced, 151 declined, and 12 remained unchanged. The ready market volumes stood at 128.425 billion shares compared to a turnover of 167.810 billion shares in the previous session.

The market since the start of the new fiscal year has shown a drop of more than 2300 points giving room for some of the investors and financial institutions to place fresh bets. However, the overall sentiment remained muffled ahead of former prime minister Nawaz Sharif and his daughter Maryyam Nawaz’s much-anticipated arrival, scheduled for Friday.

Last Friday, a court sentenced Sharif to 10 years in prison for corrupt practices linked to his family’s purchase of upscale London flats, in a major blow to his party ahead of general elections on July 25. Sharif’s daughter, Maryam, widely seen as his chosen political heir, was sentenced to seven years in prison and is disqualified from contesting the elections. Authorities have said that they both will be arrested as soon as they set foot on Pakistan’s soil.

Analysts say the events following their arrival will set the tone of the market down the line so traders are widely seen sticking to a cautious approach.

Macroeconomic issues especially depleting foreign exchange reserves are also weighing on investor morale and economists are saying that a new IMF programme seems inevitable. Murtaza Jaffar from Elixir Securities said closed on a positive note after briefly testing 40,000 level however due to relatively thin volumes, market failed to sustain the intraday high of 40,061 points level.

“We expect consolidation near 40,000 levels with investors likely continuing to take a cautious stance until the political and electoral noise settles down,” Murtaza added. The highest gainers were Indus Motor Company, up Rs43.36 to close at Rs1294.97/share, and Sapphire Fiber, up Rs41.65 to finish at Rs874.80/share.

Companies that booked highest losses were Nestle Pakistan, down Rs540.80 to close at Rs10400.00/share, and Phillip Morris Pakistan, down Rs138.04 to close at Rs2680.51/share. K-Electric Limited recorded the highest volumes with a turnover of 4.766 million shares. The scrip gained 6 paisas to close at Rs5.30/share was followed by Bank of Punjab with a turnover of 5.295 million shares, whereas the bank’s scrip gained Rs0.31 to close at Rs11.54/share.

The lowest volumes were witnessed in Pakistan Elektron, recording a turnover of 6.659 million shares and losing Rs0.20 to end at Rs32.90/share.