close
Advertisement
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!
June 11, 2019

Budget jitters, Zardari’s arrest jolt stocks

Business

June 11, 2019

The capital market on Monday declined 2.7 percent after a tumultuous post-Eid session on the eve of an expectedly harsh budget and rupee depreciation, while the negativity was compounded by political noise created by former president Asif Ali Zardari’s arrest on corruption charges, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Panic selling was witnessed at the Pakistan Stock Exchange on pre-budget uncertainty and lack of institutional support on execution delays by market support funds approved by the Economic Coordination Committee.” Likely withdrawal of zero-rated facility on exports, reports on imposition of higher taxes on corporate sector in the federal budget FY20, dismal data on CPI inflation surging to 9.1 percent in May 2019, and instability in rupee parity played a catalytic role in the bearish close, he added. Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 2.64 percent or 937.74 points to close at 34,567.55 points level. KSE-30 shares index followed suit with a low of 3.05 percent or 511.46 points to end at 16,276.23 points level.

Of 314 active scrips, 49 moved up, 246 retreated, and 19 remained unchanged. The ready market volumes stood at 91.736 shares, as compared with the turnover of 124.639 billion shares in the previous session.

Faisal Shaji, strategist at Standard Capital said the benchmark KSE-100 shares index remained lacklustre after the prime minister’s televised speech calling the public to cooperate on the tax amnesty scheme. “Weak holders remained sceptical on ‘negatives’ in budget,” he explained. Currency fluctuations also fuelled negative sentiments.

People tend to forget that there might be a strategic fund in place to ‘support’ the market in coming days. “The economic stabilisation measures taken by the government will take considerable time to rehabilitate the market” he added.

Topline Securities in its post-market note said the index succumbed to the upcoming budgetary measures after the long weekend, and lost 938 points or 2.64 percent, highest single day loss in 127 sessions. Muhammad Faizan Munshey, head of foreign institutional sales, Next Capital Limited, said selling was seen across the board with cements, oil, and financial stocks contributing most of the points to the decline in the index. “Negative sentiments were fuelled by the fears that the budget will bring tax increases along with withdrawals of subsidies.”

Pakistani rupee lost 1.5 percent against the dollar to hit Rs151.24 in the interbank market, he added.

Salman Ahmad, head of institutional sales at Aba Ali Habib said a number of key measures expected in the budget, such as increase in sales tax, federal excise duty and customs duty kept the market sideways. Till the final announcement appeared through the budget announcement, uncertainty would keep a stranglehold on market movement, he added.

The highest gainers were Shield Corporations, up Rs9.50 to close at Rs199.50/share, and AL-Abbas Sugar, up Rs6.16 to finish at Rs191.90/share. Companies that booked highest losses were Nestle Pakistan, down Rs201.48 to close at Rs6,947.02/share, and Bata Pakistan, down Rs41.56 to close at Rs1,390.63/share.

K-Electric Limited recorded the highest volumes with a turnover of 18.529 billion shares. The scrip gained Rs0.18 to close at Rs4.27/share. The lowest volumes were witnessed in WorldCall Telecom, recording a turnover of 2.468 million shares, whereas the scrip lost Rs0.06 to end at Rs0.81/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