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Thursday March 28, 2024

Stocks end flat on multiple economic concerns

By Our Correspondent
January 19, 2019

Stocks ended flat on Friday following range-bound trading activity, as investors adopted wait and watch approach due to shaky economic indicators, as well as mini-budget speculations, dealers said.

Analyst Ahsan Mehanti from Arif Habib said, “Stocks showed recovery amid higher trades on speculations in the earnings season.”

Expectations on likely cut in Public Sector Development Programme (PSDP) in the mini-budget next week invited pressure in cement stocks.

“Speculations on prime minister’s visit to Qatar, upbeat data on current account deficit for July-December 2018, likely announcements of reforms in capital market taxes on January 23, and firm global crude oil prices played a catalytic role in the positive close at the PSX,” he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.16 percent or 62.61 points to close at 39,306.50 points level. KSE-30 shares index followed suit with a high of 0.06 percent or 10.35 points to end at 18,757.07 points level.

Of 335 active scrips, 185 moved up, 129 retreated, and 21 remained unchanged. The ready market volumes stood at 155.001 billion shares, as compared with the turnover of 104.483 billion shares in the previous session.

Adil Ghaffar, CEO at First Equity Modaraba, said the market was in limbo for now, as the investors were currently awaiting the upcoming money bill. “Once the cat was out of the bag, investors expect to make decent gains,” he added.

SECP chairman in a meeting with brokers had highlighted the pivotal role of the capital market in the economy, Ghaffar said, adding that they pinned their hopes on this assurance and were expecting the government was inclined to reduce the cost of doing business and increase ease of doing business.

Various reports grabbed the attention of the investors related to the mini-budget. A few were stumped because of an expected increase in sales tax rate and fixed sales tax rate on petroleum products.

However, the government might abolish withholding tax for filers and also sales tax and withholding tax on used/second hand machinery for textile goods, which would be good for companies planning expansion, dealers said.

Cement companies shed weight in the range of Rs0.03 to Rs3 per share on market talk that the government was likely to increase federal excise duty on cement manufacturing.

Honda Motors and Indus Motors were up Rs10.29 and Rs1.43, respectively. The government might revoke withholding tax regime and allow non-filers to buy vehicles to improve revenue collection and boost production at auto companies, the analyst said.

The highest gainers were Unilever Foods, up Rs189.00 to close at Rs7,289.00/share, and Rafhan Maize, up Rs90.00 to finish at Rs6,800.00/share.

Companies that booked highest losses were Nestle Pakistan, down Rs200.00 to close at Rs7,900.00/share, and Colgate Palmolive, down Rs10.00 to close at Rs2,000.00/share.

K-Electric Limited recorded the highest volumes with a turnover of 55.918 billion shares. The scrip gained Rs0.31 to close at Rs6.45/share.

The lowest volumes were witnessed in Pakistan Elektron, recording a turnover of 6.600 million shares, whereas the scrip lost Rs0.15 to end at Rs28.00/share.