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March 12, 2019

Stocks flatline on macroeconomic dreads, missing drivers


March 12, 2019

Stocks on Monday were mostly unchanged as investors lazed the whole day in the risk-aversion-zone, fearing further macroeconomic deterioration, whereas the want of market-moving factors also weighed, dealers said.

Topline Securities in its daily market review said the session remained listless despite Finance Minister Asad Umar’s assurance, over the weekend, that Pakistan would receive $4.1 billion (50 percent of SBP’s current foreign exchange reserves) in the coming weeks.

“A delay in finalisation of an International Monetary Fund (IMF) bailout deal with Pakistan also added to the investors’ skepticism about the market’s outlook,” the brokerage said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.07 percent or 26.12 points to close at 38,924.11 points level. KSE-30 shares index followed suit with a low of 0.11 percent or 20.49 points to end at 18,559.88 points level. Of 339 active scrips, 148 moved up, 167 retreated, and 24 remained unchanged. The ready market volumes stood at 67.742 million shares, as compared with the turnover of 73.984 million shares in the previous session.

Madiha Javed, head of research at Ismail Iqbal Securities, said the benchmark index remained range-bound today as investors looked towards progress on IMF bailout package. “Lack of triggers led to another session of low volumes with only 68mn shares traded,” Madiha added.

Another analyst said investors were slowly and gradually losing confidence on KSE-100 index, which was trading just shy of 39,000 points’ level, given higher interest rate scenario and low growth prospects.

“Upcoming review of FATF in May is critical for Pakistan, an area where the government is already taking stiff actions against banned outfits in a bid to get Pakistan out of the grey list,” the analyst added.

Cement shares were in the buying chart and made healthy gains despite dull stock market. The main reason behind this increment in share price was the downward trend in international coal prices.

Richard Bay, trading at $79.60/ton, might help cement stocks to catch attraction for trading in coming sessions but traders recommend profit-taking due to weak industry dynamics.

Cement numbers recently showed slower growth, depicting overall economic pictures. A leading trader said if Pakistan received $4 billion from China and UAE before the next fiscal year, as reported, it would cushion the foreign exchange reserves and help support local rupee, a fact that was totally ignored by the players.

The main factor behind the depressing tone was ongoing tensions with the neighboring India. Though, situation is not as bad as anyone would have us believe, some investors are still afraid of making long position in the capital market.

The highest gainers were Phillip Morris Pakistan, up Rs136.38 to close at Rs3265.27/share, and Sanofi-Aventis, up Rs34.28 to finish at Rs888.37/share.

Companies that booked highest losses were Wyeth Pakistan Limited, down Rs58.01 to close at Rs1142.66/share, and Jubile Life Insurance down Rs20.00 to close at Rs420.00/share.

BOP recorded the highest volumes with a turnover of 16.285 billion shares. The bank’s scrip gained Rs0.23 to close at Rs14.09/share. The lowest volumes were witnessed in Unity Foods Limited recording a turnover of 2.790 million shares, whereas the scrip lost Rs0.28 to end at Rs16.78/share.

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