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March 15, 2019

Stocks slip on economic scares, oil deal disappointment


March 15, 2019

Stocks on Thursday edged lower with a lean turnover, mainly on the prevailing economic scares that continue to haunt investors in a market that remains devoid of strong trade triggers, dealers said.

Topline Securities in its daily market review said the benchmark index maintained its dull momentum with 8 percent decline in volumes.

“Reports of non-materialisation of $3.2 billion oil facility from United Arab Emirates dismayed investors, who preferred to stay on the sidelines,” the brokerage said. Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.31 percent or 120.32 points to close at 38,808.61 points level. KSE-30 shares index followed suit with a low of 0.51 percent or 94.94 points to end at 18,425.85 points level. Of 329 active scrips, 106 moved up, 212 retreated, and 11 remained unchanged. The ready market volumes stood at 85.867 million shares against a turnover of 93.538 million shares in the previous session. Analyst Ahsan Mehanti from Arif Habib Corporations said stocks received a battering amid thin trade on investor concerns over ongoing geopolitical uncertainty.

“Foreign outflows, concerns over hike in power tariff, surging fiscal deficit, and CPI inflation for February led to a bearish close,” Mehanti added. Madiha Javed from Ismail Iqbal Securities said “news that Pakistan will not receive oil on deferred payments from UAE as promised earlier kept the market under pressure throughout the day. “Fitch downgraded Pakistan’s growth outlook to 4.1 percent in FY20 given economic imbalances that continue to exert pressure,” Javed said.

Salman Ahmad, head of institutional sales at Aba Ali Habib said number of factors kept investors away from the market which resulted in lower volumes.

Ahmed said number of audits of the stockbrokers had been called under “now your customer”, which were keeping the investors to reduce their buying orders and staying away from the market.

“Another reason which has upset the investors is the agreement to be signed with the International Monetary Fund (IMF).” Singing of the agreement with the IMF would force the government to take number of steps like rise in utilities tariff, devaluation, and even hike in benchmark interest rate, Ahmed added.

According to an analyst the market received fresh pruning because of the media reports that UAE has refused to provide oil on deferred payments.

However, the Finance Minister Asad Umar said that the government would make another arrangement, the analyst added. A leading trader said there had been some worries about the dull trend in exports but the encouraging thing was a drop in imports, which would help provide some cushion to falling foreign exchange reserves. He added that some of the positive developments have been ignored recently due to geopolitical situation and ongoing tension with India, which had now subsided, but still war of words could be heard clearly.

The highest gainers were Phillip Morris Pakistan, up Rs96.56 to close at Rs3687.50/share, and Archroma Pakistan, up Rs23.95 to finish at Rs611.20/share.

Companies that booked highest losses were Colgate Palmolive, down Rs30.00 to close at Rs2000.00/share, and Siemens Pakistan down Rs24.00 to close at Rs755.00/share. Unity Foods Limited recorded the highest volumes with a turnover of 11.782 billion shares. The scrip gained Re1 to close at Rs14.17/share. The lowest volumes were witnessed in BOP, which recorded a turnover of 18.461 billion shares, whereas the scrip lost Rs0.04 to end at Rs14.37/share.

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