Market ends flat in range-bound trade; investors wait for IMF report

Stocks ended flat in range bound trade on Monday, the first day of the new fiscal, as investors and financial institutions remain cautious ahead of the International Monetary Fund (IMF) board meeting scheduled for July 3 to approve Pakistan’s request for a loan, dealers said.

Muhammad Faizan Munshey, head of foreign institutional sales at Next Capital, said that throughout the day, the market traded within a thin trading range of 243 points. Pakistan has adopted stringent demands under the (IMF) bailout package and that was reflecting poorly on the stock market.

“The news reports of Pakistan receiving the first tranche of $500 million from Qatar failed to excite investors who preferred to stay cautious on the market,” Faizan added. Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.28 percent or 94.75 points to close at 33,996.33 points level. KSE-30 shares index followed suit with a high 0.51 percent or 80.90 points to end at 15,973.89 points level.

Of 314 active scrips, 155 moved up, 140 retreated, and 19 remained unchanged. The ready market volumes stood at 48.046 million shares, as compared with the turnover of 213.909 billion shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib said there were expectations that the agreement with the IMF after two days would lift the stock market. “Hopefully July would be better compared with June due to oversold positions and some key developments expected within a short time.”

As soon as some positive triggers arise on the economic front, the market would likely behave accordingly, Salman added. Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks showed recovery led by selected auto, oil and banking scrips on strong valuations.”

Investor confidence over fiscal stability measures in the federal budget FY20, reports on higher banking spreads, surge in local auto prices, and higher global crude oil prices played a catalytic role in the bullish close, Mehanti added.

The share market moved in a tight band ahead of IMF board meeting, as investors wait for the country report which would outline the measures the government has to adopt for the three programmes.

Other factors which deterred investors included the developments related to price increase of a number of utility items such as gas, electricity, and CNG, as well as commodity prices of cement, fertiliser, aerated water, and packed food products. This indicated that inflation would go up further putting immense pressure on the monetary policy decision.

Rise in fertiliser price by Rs210/bag has been beneficial for the companies, as the companies listed at the stock market recorded sharp increase. Fauji Fertilizer was up Rs2.40/share and Engro Fertilizer went up Rs1.08/share.

The highest gainers were Nestle Pakistan, up Rs332.13 to close at Rs6,999.00/share, and Bata Pakistan, up Rs59.69 to finish at Rs1,440.00/share. Companies that booked highest losses were Phillip Morris Pakistan, down Rs179.00 to close at Rs3,401.00/share, and Murree Brewery, down Rs20.47 to close at Rs743.17/share.

Unity Foods Limited recorded the highest volumes with a turnover of 13.905 billion shares. The scrip gained Rs0.58 to close at Rs10.88/share. The lowest volumes were witnessed in Fauji Cement, recording a turnover of 1.053 million shares, whereas the scrip lost Rs0.05 to end at Rs15.68/share.