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November 10, 2018

Stocks flatline in triggerless trade; all eyes on China


November 10, 2018

Stocks on Friday mostly flatlined, cranking up and down within a narrow band, mainly owing to the absence of any strong stimuli and the revisiting macroeconomic concerns, while investors kept their fingers crossed waiting for the actual figures of Chinese bailout, dealers said.

A top-level Pakistani delegation is in China to finalise the bulk of a potential financial support package, while an International Monetary Fund (IMF) mission is in Islamabad to hash out an indispensable bailout plan. Shumalia Badar, head of research at Ismail Iqbal Securities said the market was range-bound because of lack of triggers and lingering uncertainties over Pakistan's external position.

“We expect the market to face selling pressure ahead of MSCI's semi-annual index review announcement on November 13,” Badar added. Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index gained 0.05 percent or 21.50 points to close at 41,388.88 points level, whereas KSE-30 Shares Index turned a loss of 0.19 percent or 37.47 points to end at 19,880.14 points level.

Activity was witnessed in 369 scrips out of which 217 moved up, 126 went down, and 26 remained unchanged. The ready market volumes stood at 219.604 billion shares compared to 224.675 billion shares in the previous session.

Ahsan Mehanti from Arif Habib Corporation said stocks showed recovery as investors weighed upbeat data on exports and a likely surge in exports amid Chinese commitments during prime minister’s visit last week.

“Investor speculations ahead of announcements on IMF bailout package and financial assistance from China, UAE to ease external account crises, assisted the stocks a end green,” Mehanti added.

An analyst from Arif Habib Limited said selling pressure was evident from activity in steel, cement, banks, and exploration and production (E&P) sectors.

“E&P sector bore the brunt of declining oil prices. Among banks, the United Bank in particular, was the source of ire for investors, as it faces the risk of being excluded from rebalancing, as does Lucky Cement. Both the stocks showed significant flows, apparently from foreign investors. Major volumes were observed in Chemical sector and banks,” the analyst said. The stock market opened on a weak note and recorded a decline of as much as 160 points, which encouraged some of the institutions like mutual funds to place fresh deals in the trading stocks and some of the blue chips.

However, before the closure, the market surged sharply on some encouraging exports numbers which registered a double-digit growth in October compared to September. Exports in October amounted to $1.9 billion dollars.

Moreover, Pakistani currency remained under pressure and still not finding its correct value and has been depreciating in patches. Some market players said they will take new positions once the salient features of the Chinese bailout come to light. The highest gainers were Island Textile, up Rs61.60 to close at Rs1639.00/share, and Sapphire Textile, up Rs49.87 to finish at Rs1249.85/share.

Companies that booked highest losses were Colgate Palmolive, down Rs99.00 to close at Rs2301.00/share, and Sapphire Fiber, down Rs42.93 to close at Rs819.87/share. Bank of Punjab recorded the highest volumes with a turnover of 25.804 million shares. The scrip gained Rs0.01 to close at Rs13.48/share.

The lowest volumes were witnessed in Pakistan Elektron, recording a turnover of 5.220 million shares, and losing Rs0.17 to end at Rs31.46/share.

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