Stocks claw back losses on bailout deal hopes

KARACHI: Stocks on Friday pared some losses as investors betted the government negotiations with the visiting International Monetary Fund (IMF) team will make headway towards getting a new lease on life for the ailing economy, dealers said.

Ahsan Mehanti from Arif Habib Corporation said stocks staged recovery led by selected scrips across-the-board as investors followed United Nations Conference on Trade and Development report that the government might opt for a bailout package from the IMF.

“Dismal data on fertiliser sales for Jan-Aug 2018 invited mid-session pressure in urea makers’ stocks, while speculations ahead of central bank’s monetary policy announcement also invited interest in banking stocks,” ,” Mehanti said.

He added that higher global oil prices supported oil stocks, whereas auto, steel, and cement sectors outperformed on strong earnings outlook amid likely continuation of China-Pakistan Economic Corridor projects.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index rose 0.36 percent or 146.79 points to close at 40,998.59 points, while KSE-30 shares index rose 0.18 percent or 35.64 points to end at 19,917.79 points.

Of the 372 active scrips, 177 advanced, 178 declined, and 17 remained unchanged. The ready market volumes stood at 145.910 billion shares compared to the turnover of 149.352 billion shares in the last session.

An analyst from Ismail Iqbal Securities said investors should keep an eye on the monetary policy announcement, wherein a hike of 50 basis points was likely. "We expect the market to be negative in the upcoming session,” the analyst added.

He said the automobile assemblers showed erratic performance on the news that senate standing committee on finance has rejected government’s proposal to withdraw ban on non-filers to purchase motor vehicle. The market remained dull and index closed the first session with a loss of 200 points. During the second session it came under selling pressure, hitting a session low of 40,622 points. However, with renewed interest from some of the financial institutions some of the key scrips showed positive signs under the lead of cement and oil shares.

Rise in crude oil price helped domestic shares like Oil and Gas Development Company (OGDC), Pakistan Oilfields, and Mari Petroleum, which registered a sharp improvement. Cement shares also showed some renewed activity as industry experts believed that cement sale in September was likely to record an increase of 9 percent to 3.4 million tons to 3.5 million tons. Banks shares also remained active and more than 31 million shares were handled in this sector as investors are betting on a rise in benchmark interest rate.

Companies reflecting highest gains included Pakistan Tobacco, up Rs117.77 to close at Rs2516.98 / share, and Island Textile, up Rs77.44 to close at Rs1626.44 / share. The major losers were Wyeth Pakistan Limited, down Rs49.31 to end at Rs1154.18/share, and Millat Tractors, down Rs43.90 to close at Rs1014.15/share.

The highest volumes were witnessed in Bank of Punjab with a turnover of 11.075 million shares. The scrip gained Rs0.44 to close at Rs11.83/share.

Unity Foods Limited witnessed the lowest volumes with a turnover of 8.487 million shares. Its scrip lost Rs1.41 to close at Rs31.43/share.