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Tuesday March 19, 2024

Stocks fall as investors worry over MSCI index review

By Our Correspondent
November 13, 2018

Stocks fell on Monday amid across the board declines, as investors’ awaited MSCI Semi-Annual Index review decision and the outcome of talks with the International Monetary Fund (IMF) officials, dealers said.

Murtaza Jaffer from Elixir Securities said, “The index traded under pressure due to lack of triggers, as Ministry of Finance discusses bailout package with IMF officials in Islamabad.” He said the rounds of selling estimates kept investors at bay in index heavy blue chips, as MSCI Semi Annual Review announcement was due on November 13, 2018.

“We expect Lucky Cement to be downgraded from MSCI Emerging Market Index to Small Cap Index while United Bank Limited remains a borderline case.” Both the stocks remained under pressure, and accounted for a decline of 90 points in the benchmark KSE-100 shares index.

“We expect the market to find support around 40,500-40,700 levels, as details from the bailout package emerge out of the ongoing talks with IMF,” Jaffar added. Pakistan Stock Exchange (PSX) KSE-100 shares index lost 0.71 percent or 292.55 points to close at 41,096.33 points level. KSE-30 shares index followed suit with a loss of 0.87 percent or 172.44 points to end at 19,707.70 points level.

As many as 368 scrips were active in today’s session, of those 111 moved up, 242 retreated, and 15 remained unchanged. The ready market volumes stood at 178.021 billion shares, as compared with the turnover of 219.604 billion shares in the previous session.

An analyst from Al Habib Research said the benchmark index was in the green zone during the opening hours on the back of positive news flow on remittances, which depicted an increase of 15 percent in four months. Release of partial tax refunds to exporters also helped lift the market.

“However, in the later hour, investor’s focus shifted to upcoming MSCI review which is expected to result in removal of UBL and Lucky Cement, thus both scrips closed with a loss of 3.7 percent and 2.16 percent, and led to overall loss of 81 points in the KSE-100 index.

A meeting of the Economic Coordination Committee postponed the decision on gas load management for other meetings. Market observers were expecting some relaxation from the government quarters especially for the textile mills.

The team that left for China to hold talks for a fresh package has not yet revealed anything, which dampened the investors’ mood as well. State Bank of Pakistan governor and secretary finance left last week to hold talks on additional leeway for exports into China.

The highest gainers were Colgate Palmolive, up Rs115.05 to close at Rs2,416.05/share, and Pakistan Tobacco, up Rs100.75 to finish at Rs2,294.94/share. Companies that booked highest losses were Nestle Pakistan, down Rs480.00 to close at Rs9,120.00/share, and Sapphire Fiber, down Rs39.87 to close at Rs780.00/share.

Lotte Chemical recorded the highest volumes with a turnover of 15.914 million shares. The scrip gained Rs0.46 to close at Rs18.10/share. The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 17.718 million shares, and losing Rs0.06 to end at Rs6.02/share.