Stocks slide as dim economic numbers depress investors

Stocks on Wednesday extended losses for the second day in row as investors continue to lose faith in an economic turnaround in the near future amid grim November numbers and fears of further slowdown in the year ahead, dealers said.

Murtaza Jaffar, analyst at Elixir Securities, said the US announcement that it had blacklisted Pakistan for alleged violation of religious freedom was also one of the reasons that stampeded the bears to the trading floor; however, later the US waived some sanctions, but it failed to cheer up investors.

“Going forward, we expect investors to wait for clarity on IMF (International Monetary Fund) bailout package along with likely loan of around $2 billion from Chinese financial institutions,” Jaffar added.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 1.40 percent or 544.52 points to close at 38,307.44 points level. KSE-30 shares index followed suit with a loss of 1.41 percent or 261.77 points to end at 18,251.05 points level. Of 350 active scrips, 56 moved up, 278 retreated, and 16 remained unchanged. The ready market volumes stood at 145.627 billion shares, as compared with the turnover of 124.011 billion shares in the previous session.

Adil Ghaffar, CEO of First Equity Modaraba said currently, inventors' confidence is shattered due to economic numbers of November 2018, where exports grew by 1.3 percent, imports declined by 0.8 percent, while trade deficit stood at $14.5 billion. “The remittances from Pakistani expatriates increased to $9.1 billion, up by 12.6 percent. With a massive 33 percent currency devaluation since January 2018 and interest rate hike around 4.25 percent, country’s current financials do not seem to support a short-term economic turnaround,” Ghaffar added.

Faizul Sultan, research analyst from BMA Capital Management, said dismal auto numbers for the month of November and for the five months period of this fiscal year also jolted the market. “In November auto sales declined 17 percent to 17,442 units,” Sultan said.

Another analyst said the US administration’s late night announcement of blacklisting Pakistan was enough to scare local as well as foreign investors into selling and the index, as expected landed in the negative zone with a series of declines in every sector.

“So far, foreign investors have off-loaded equities worth around $500 million, eroding several companies’ share values in the range of 20 percent to 60 percent,” the same analyst said.

Cumulatively, car sales in five months of the current fiscal year decreased 4 percent to 101,000 units primarily owing to weak demand dynamics mostly in 800-1000cc segment, post steep price increase of 9 percent since January 2018.

Indus Motor Company’s share price slumped Rs 7.01, Honda Atlas fell Rs7.87, and Pak Suzuki Motors lost Rs 5.58, while tractor-makers’ share prices plunged by Rs4 to Rs45 per share.

The highest gainers were Island Textile, up Rs41.00 to close at Rs1639.25/share, and ICI Pakistan, up Rs16.90 to finish at Rs743.98/share. Companies that booked highest losses were Phillip Morris Pakistan, down Rs175.00 to close at Rs3325.00/share, and Wyeth Pakistan Limited, down Rs47.14 to close at Rs1001.45/share. Pakistan Elektron recorded the highest volumes with a turnover of 16.493 million shares. The scrip gained Rs0.56 to close at Rs25.56/share. The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 16.490 billion shares, and losing Rs0.15 to end at Rs5.78/share.