Stocks end flat as investors await outcome of IMF meeting

Stocks ended flat on Tuesday, closing the first session of Ramazan dull with volumes on the lower side, as investors anxiously wait for the outcome of the government and International Monetary Fund (IMF) meeting, likely to end this week, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks showed recovery led by the financial sector as investors expect banking reforms and likely surge in key policy rate once government finalises terms of IMF programme this week.”

Oil stocks were battered on falling global crude oil prices and dismal data on sales, which dropped by 24 percent for July-April 2019.

Easing debt concerns, foreign inflows played a catalytic role in the positive close, Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.07 percent or 25.64 points to close at 35,631.06 points level. KSE-30 shares index followed suit with a high of 0.20 percent or 34.31 points to end at 16,824.71 points level.

Of 284 active scrips, 78 moved up, 184 retreated, and 22 remained unchanged. The ready market volumes stood at 65.363 million shares, as compared with the turnover of 71.418 million shares in the previous session.

An analyst from Topline Securities said, “After five consecutive negative sessions, the index closed flat today by gaining a meagre 26 points.” Investors continue to wait for key economic developments in coming months, where an agreement with IMF can provide short-term relief to the index. “Further, this programme will be a road map in bringing fiscal discipline in the economy.”

Appointment of tax consultant and auditor Shabbar Zaidi as the chairman of Federal Board of Revenue stumped several analysts and investors. However, several investors hope that his appointment would bring good change in the authority.

The government has been working hard to bring a new tax amnesty scheme during the current month, either before the announcement of the budget or along with the federal budget announcement. The tax machinery hopes to raise around Rs170 billion from the amnesty scheme to improve the country’s economy and widen the tax base.

However, general perception was that the government should start working on some roadmap to bring the economy out of the woods. Since the new government took charge, the index has lost substantially, plunging by more than 5,600 points or 16 percent.

Moreover, several share prices have suffered declines in the range of 30 to 60 percent, and though they promise good returns, the delay in the IMF deal has been hurting the sentiment.

The highest gainers were Nestle Pakistan, up Rs225.00 to close at Rs7,465.00/share, and Phillip Morris Pakistan, up Rs171.11 to finish at Rs3,670.00/share.

Companies that booked highest losses were Mari Petroleum, down Rs19.81 to close at Rs1,107.14/share, and Hinopak Motors, down Rs18.25 to close at Rs346.88/share.

K-Electric Limited recorded the highest volumes with a turnover of 10.190 billion shares. The scrip lost Rs0.15 to close at Rs4.45/share.

The lowest volumes were witnessed in Pioneer Cement, recording a turnover of 1.848 million shares, whereas the scrip lost Rs0.7 to end at Rs24.02/share.