Stocks flatline as finance minister ouster noise mutes sentiment

Stocks on Monday drew to a dull close in the wake of rumours that sitting finance minister might be shown the door for not being able to deliver as expected, in spite of reports that a bailout deal with the lender of the last resort has almost been reached, dealers said.

Ahsan Mehanti at Arif Habib Corporations said stocks closed higher led by cement and banking scrips amid speculation in the pre-budget season at the apex bourse, while mid-session pressure remained on reports of federal cabinet reshuffle and likely removal of Finance Minister Asad Umar.

“Renewed hopes for economic stability ahead of disbursement of IMF bailout package, rupee stability, and likely announcements on finance minister’s proposed tax amnesty scheme later this week led to a positive close,” Mehanti added.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.45 percent or 166.21 points to close at 37,504.08 points, whereas KSE-30 closed 0.58 percent or 102.57 points higher to end at 17,753.12 points.

Of 342 active scrips, 194 moved up, 130 retreated, and 18 remained unchanged. The ready market volumes stood at 172.006 million shares, as compared to 189.356 million in the previous session.

Madiha Javed, head of research from Ismail Iqbal Securities, said the market continued its positive momentum that started after last week's meeting between Pakistan’s economic team and the IMF officials in Washington DC.

"In terms of index points, commercial banks, fertilisers and oil marketing companies were the major contributors to the gains today. Autos remained positive,” Madiha added.

Salman Ahmad, director institutional sales from Aba Ali Habib Securities, said news that the government would soon seal a deal with the IMF on quite realistic conditions, helped the stocks market end in the green zone.

"The agreement with the IMF would pave for fresh foreign investment both direct and portfolio investment, which would prove to be a sigh of relief for the economy," Salman added.

The market got off to a good start to touch the session high of 37,698 points but slipped to 37,281 points owing to heavy selling triggered by the news spurted that the Prime Minister Imran Khan has decided to shake up the cabinet that may result in the departure of the incumbent finance minister, which disturbed the market.

Market consensus is that reshuffling would jeopardise the efforts led by Finance Minister Asad Umar to seek loan from the International Monetary Fund and other reforms tabled during the six months.

However, the the government later clarified that no such decision has been taken and Umar will continue to hold the office of finance ministry. The highest gainers were Nestle Pakistan, up Rs280.00 to close at Rs8060.00/share, and Bata Pakistan, up Rs53.73 to finish at Rs1656.37/share.

Companies that booked highest losses were Phillip Morris Pakistan, down Rs126.67 to close at Rs3673.33/share, and Sapphire Textile down Rs41.29 to close at Rs1203.71/share. Pakistan Elektron recorded the highest volumes with a turnover of 18.187 million shares, gaining Rs1.09 to close at Rs22.98/share. The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 13.986 million shares, whereas the scrip lost Rs0.13 to end at Rs5.10/share.