Stocks extend losses as reforms package fails to cheer investors

Stocks on Thursday extended losses for the third consecutive session, completely tuning out the much-awaited introduction of economic reforms via a supplementary finance bill the government railroaded through the lower house of the parliament on Wednesday amid protests, dealers said.

Topline Securities in its daily market review said banking sector reacted negatively to the approval of economic reforms package by the National Assembly.

“Banking sector dragged the index down by 60 points as the super tax clause dampened investor sentiment,” the brokerage said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.69 percent or 274 points to close at 39,294.10 points level, whereas KSE-30 shed 0.85 percent or 160.46 points to end at 18,783.67 points level.

Of 347 active stocks, 103 moved up, 224 retreated, and 20 remained unchanged. The ready market volumes stood at 83.156 million shares, as compared with the turnover of 81.422 million shares in the previous session.

Ismail Iqbal Securities in their market roundup said the market remained under pressure throughout the session despite the passage of Finance Supplementary Bill, 2019 through the legislature.

“In terms of index points, exploration and production sector contributed the most to losses followed by commercial banks,” the brokerage said.

An analyst said despite the passage of finance amendment bill with measures mostly pro-industrial sector especially auto sector, investors remained wary of the geopolitical tensions in the region.

The present government was making all-out efforts to reduce tension and offer talks to resolve the outstanding issues including Kashmir but war hysteria from India continues to weigh. Foreign selling by some companies was also witnessed despite the promise of good returns.

The market opened positive and scored a gain of more than 120 points at one stage but negative developments in the surroundings pushed it to the negative territory.

Media reports of a bomb blast in Kashmir and another in Afghanistan also sent negative vibes through the market.

Auto sector mainstays i.e., HCAR, INDU and PSMC closed at their respective upper caps as investors reacted positively to the removal of law barring non-tax filers from purchasing motor vehicles.

An analyst said the main factor behind this initial surge was passing of supplementary bill whereby the government allowed non-filer to purchase vehicles up to 1300cc.

Arif Habib Limited in their market review said “LOTCHEM & DOL appear in the top 10 volumes table in addition to price increase. E&P sector was also among the sectors that caused selling pressure and pushed the index down.

Rumors of foreigners selling block of OGDC’s shares added pressure to the already declining stock price, brokerage house said.

The highest gainers were Bata Pakistan, up Rs83.37 to close at Rs1750.91/share, and Indus Motor Company, up Rs64.25 to finish at Rs1349.29/share.

Companies that booked highest losses were Rafhan Maize, down Rs350 to close at Rs6900/share, and Unilever Foods down Rs200 to close at Rs7400/share.

Lotte Chemical recorded the highest volumes with a turnover of 5.387 million shares. The scrip gained Rs0.22 to close at Rs15.02/share. The lowest volumes were witnessed in BOP recording a turnover of 8.511 million shares, whereas the bank’s scrip lost Rs0.16 to end at Rs13.84/share.