As some big names disappoint, market dips

The capital market declined on Monday, as investor appetite waned amid lower than expected results and poor performance of blue-chip financial, fertiliser, and cement shares, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks remained under pressure in the futures rollover week on weak earnings outlook.”

Oil stocks outperformed amid surging global crude oil prices and Saudi prince signing MoUs to setup $10 billion oil refinery, while also pledging $20 billion in investment deals.

“Economic uncertainty, imposition of 200 percent import tariff by India on exports from Pakistan, and surging fiscal debt played a catalytic role in the bearish close,” he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.66 percent or 267.20 points to close at 40,219.47 points level. KSE-30 shares index followed suit with a low of 0.59 percent or 115.47 points to end at 19,338.90 points level.

Of 328 active scrips, 75 moved up, 231 retreated, and 22 remained unchanged. The ready market volumes stood at 98.841 million shares, as compared with the turnover of 93.001 million shares in the previous session.

Madiha Javed, head of research from Iqbal Ismail Securities, said, “The market was negative despite Saudi crown prince's visit to Pakistan, where MoU’s for various investment deals worth $20 billion were signed.”

Overall border tension with India remained at the forefront with potential to impact exports (especially for cements). “With Pakistan’s meeting with the Financial Action Task Force (FATF) and ongoing International Monetary Fund (IMF) discussions, negative headlines could be worrisome,” Madiha added.

Salman Ahmad, director institutional sales at Aba Ali Habib, said, “The market opened positive, but continuous harsh words arriving from the neighbours forced several genuine buyers to stay away from the rings, while few preferred to sell their holdings, resulting in widespread declines.”

The immediate threat to the market has been volley of words from India since the attack in Indian Occupied Kashmir, which forced several investors to sell their holdings. The market has been dented by heavy selling in some of the companies posting lower than expected results.

Cement sector was on the losing side following the Indian government’s decision over the weekend to clamp 200 percent customs duties on all products from Pakistan, including cement

An analyst said Pakistan would lose cement export market of one million tons; eliminating around 50 to 55 million dollars of earnings, which would trim the margins of cement companies, though the share in overall cement exports has been quite thin.

The highest gainers were Nestle Pakistan, up Rs100.00 to close at Rs8,900.00/share, and Wyeth Pakistan Limited, up Rs36.54 to finish at Rs1,101.56/share.

Companies that booked highest losses were Colgate Palmolive, down Rs40.00 to close at Rs2,000.00/share, and Services Industries Limited, down Rs20.00 to close at Rs780.00/share.

Fauji Foods Limited recorded the highest volumes with a turnover of 5.418 million shares. The scrip gained Rs0.03 to close at Rs33.60/share.

The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 6.343 million shares, whereas the scrip lost Rs0.1 to end at Rs6.43/share.