Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

Stocks barely manage to stay buoyed, looking to market support fund lifeline


May 21, 2019

Stocks on Monday narrowly escaped a negative close, following reports the government was weighing a support fund that would act as a much-needed backstop for the capital market that’s stuck in a virtual free fall for many months, dealers said.

Saad Hashmey, chief economist at Topline Securities, said the market during the session saw a pruning of over 800 points, expecting a significant increase in the benchmark interest rate; however, before the end, the bourse was engulfed with sentiments that the rate may not see a substantial rise.

“Another positive development, which helped improve the confidence of investors, was the government's decision to establish a fund to support the sagging market,” Saad said. Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.25 percent or 83.92 points to close at 33,250.54 points level, while KSE-30 shares index followed suit with a high of 0.12 percent or 18.82 points to end at 15,752.53 points level. Of 343 active scrips, 207 moved up, 122 retreated, and 14 remained unchanged. The ready market volumes stood at 165.485 million shares, as compared with the turnover of 90.373 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said stocks showed recovery led by oversold cement, banking and oil scrips, amid expectations that a disaster support fund worth Rs17 billion might be approved for the PSX soon.

Mehanti said uncertainty over State Bank of Pakistan (SBP) policy rate decision and falling rupee invited mid-session pressure. “Tax amnesty scheme announcement by the government, foreign inflows, upbeat data on trade deficit for July-April FY19, and finance minister’s affirmations for up to Rs600bn PSDP in federal budget led to a bullish close,” Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said reports that no oil and gas reserves were found from offshore block Kekra sent negative signals and market received immediate jerk where OGDC and PPL at one stage suffered a decline of Rs8/share because both the companies were in the joint venture in that exploratory well.

Ahmad added that the expected hike in interest rate also weighed on the share values; however the talk of establishing a market support fund to help improve sentiments at the market where the PE had been on the lowest side as compared to the region, geared up the sentiment helping the market to end green. Topline Securities in a report said recovery was witnessed across the board. “Auto and government-owned stocks remained in limelight, where HCAR, PSMC, and GHNL closed nearly to their upper locks after HCAR’s above expected financial results,” the brokerage said. The Topline added that state-owned stocks like SNGP, SSGC, PSO, PTC, and NBP closed green after it was announced that the government is planning to create a fund under National Investment Trust supervision to support dwindling stock market. The highest gainers were Rafhan Maize, up Rs65.50 to close at Rs6250/share, and Pakistan Tobacco, up Rs57.21 to finish at Rs2579.24/share. Companies that booked highest losses were Colgate Palmolive, down Rs50 to close at Rs1900/share, and Sanofi-Aventis down Rs35.65 to close at Rs677.35/share. K-Electric recorded the highest volumes with a turnover of 12.322 billion shares. The scrip gained Rs0.23 to close at Rs3.90/share. The lowest volumes were witnessed in Pakistan Petroleum recording a turnover of 4.735 million shares, whereas the scrip lost Rs8 to end at Rs157.66/share.

Topstory minus plus

Opinion minus plus

Newspost minus plus

Editorial minus plus

National minus plus

World minus plus

Sports minus plus

Business minus plus

Karachi minus plus

Lahore minus plus

Islamabad minus plus

Peshawar minus plus