Stocks out of multi-session rout on macroeconomic clarity

Stocks on Tuesday came out of three-session rout to end flat as investors were off the tenterhooks after International Monetary Fund’s (IMF) acknowledgement that Pakistan had successfully delivered on the prior actions, which means economy may find a direction, dealers said.

Topline Securities in its market review said stocks ended green after losing for multiple sessions as IMF’s staff report had provided some certainty to investors on macroeconomic front including quarterly adjustment of utility rates, monetary tightening, and the tax collection target.

The brokerage, however, added that trading volume continued to remain flat; up by mere 1 percent as investors remained reluctant to add fresh equity into the market.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.33 percent or 112.90 points to close at 33,855.58 points level, while KSE-30 shares index went down by 0.31 percent or 48.60 points to end at 15,955.06 points level.

Of 303 active scrips, 152 moved up, 130 retreated, and 21 remained unchanged. The ready market volumes stood at 60.158 million shares, as compared to a turnover of 59.555 million shares in the previous session.

Salman Ahmed, head of institutional sales at Aba Ali Habib Securities, said the market recovered sharply after Monday’s decline on the grounds that the IMF statement gave clarity to market observers that most of the indicative targets before getting approval had almost been met.

“The turnover was still low as a lot of investors are waiting for monetary policy announcement, due in the last week of this month. The stance of the SBP (State Bank of Pakistan) would further clear the dust from the key indicative targets,” Ahmad said.

Samiullah Tariq, director research at Arif Habib Corporation, said the market recovered as economic uncertainty had reduced to a certain extent after the release of the IMF staff report. He added that after the projections, released by the IMF on Pakistan’s economy, which appeared to be quite encouraging, further revealed that inflation after reaching a high of 13 percent in current fiscal year would taper off.

“Moreover, a fall in the inflation rate might lead to some clippings in benchmark interest rate which will bode well for overall economy and our manufacturing sector,” he said. Arif Habib Limited in their market review said, “The last half hour of trading brought the market back in the positive territory, while overall volumes remained low at 60 million shares for the third consecutive session”.

Cement sector led the volumes table with 12 million shares, followed by chemical sector with 10 million shares. LOTCHEM, on the back of all time high product margins, remained in demand and hit the highest volume with 6.2 million shares, followed by MLCF (5.6 million), the brokerage house said.

The highest gainers were Wyeth Pakistan Limited, up Rs19.99 to close at Rs719.99/share, and Abbott Laboratories, up Rs9.51 to finish at Rs434.00/share.

Companies that booked highest losses were Sapphire Fiber, down Rs52 to close at Rs993/share, and Indus Motor Company, down Rs28.22 to close at Rs1209.39/share. Maple Leaf recorded the highest volumes with a turnover of 5.609 million shares, losing Rs0.09 to close at Rs23.18/share. The lowest volumes were witnessed in Bank of Punjab, recording a turnover of 1.634 million shares, whereas the scrip lost Rs0.02 to end at Rs8.75/share.