Stocks fall on correction in global crude prices

Stocks on Wednesday shadowed international crude oil prices that slipped after Saudi Arabia announced that supplies, disrupted after attacks on its refineries, would be restored earlier than expected before, which dealers said weighed on the index-heavy oil shares big time.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 1.11 percent or 353.45 points to close at 31,555.47 points level, while its KSE-30 index followed the suit with a low of 1.40 percent or 210.96 points to end at 14,822.24 points level.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Pressure remained at the PSX on investor concerns over weak earnings outlook”.

“Weak FDIs (foreign direct investment) numbers at $157 million during July-August 2019 period - a fall by 58 percent, dismal data on cement and auto sales in August, uncertainty in global equities and concerns over political noise knocked over a percent out of the index,” Mehanti added.

A total of 356 stocks were active today. Of which, 101 were bullish, 230 ended up bearish, while 25 remained neutral. The turnover was lower at 99.363 million shares, as compared with 122.012 million in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said,” The capital market fell sharply mainly owing to trimming of share values in oil stocks after their weightage grew heavier in the benchmark index.

The Oil and Gas Development Company and Pakistan Petroleum recorded significant trimming in their respective share values, Ahmad said.

He said crude oil prices on global trading were down by more than $2 per barrel (average) both for WTI (West Texas Intermediate), the USA brand, and Brent (British brand) from yesterday’s trading.

“Moreover this dent was also because of technical reasons as most of the investors booked available profits, despite having some positive news from the economic fronts,” Ahmad added.

Oil prices fell after Saudi authorities said half of production, hit by an attack over the weekend, had already had been brought back on line.

Oil prices tumbled 6 percent on Tuesday after the Saudi energy minister said the kingdom had reestablished oil supplies to customers at their level before the attacks by drawing from its inventories. Saturday’s attacks effectively shut 5 percent of global oil output.

The International Monetary Fund (IMF) technical team held meetings with Dr Hafeez Shaikh, advisor to Prime Minister on Finance, Dr Baqar Raza, governor State Bank of Pakistan, and even the Prime Minister Imran Khan. Reportedly, the Fund officials seem satisfied with the measures and reforms taken by the government to help strengthen the economy.

Arif Habib Limited in their daily market analysis said, “Oil chain including exploration and production, oil marketing companies, and refineries drove the market with volume amid declining prices”.

“The IMF nod on government’s measures failed to give confidence to the investors on the macro-economic front,” the brokerage house added.

The top gainers were Colgate Palmolive, up Rs49.67 close at Rs2199.00/share, and Bhanero Textile, up Rs39.05 to finish at Rs820.11/share.

The top losers were Bata Pakistan, down Rs60 to close at Rs1200.00/share, and Sapphire Fibre, down Rs37.94 to close at Rs720.94/share.

WorldCall Telecom posted the highest turnover at 10.331 billion shares today, gaining Rs0.03 to end at Rs1.01/share, while DG Khan Cement’s trading volume was the lowest with 2.472 million shares and it lost Rs0.42 to end at Rs47.56/share.