Stocks top up losses on grim growth forecast

Stocks extended losses on Thursday after economy was forecast to grow at under 3 percent during the current fiscal year dropped clues that a semi-stagnant manufacturing sector is going to eat into the earnings of the companies, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.42 percent or 131.32 points to close at 31,433.89 points, while KSE-30 shares index eroded 0.72 percent or by 105.95 points to end at 14,659.21 points.

Of 359 active scrips, 146 were upwardly mobile, 186 shed value, and 27 remained inert. On a day-on-day basis, trading volumes increased to 124.475 million shares from 104.764 million in the previous session.

Madiha Javed, head of research at Ismail Iqbal Securities said, “The KSE-100 index remained volatile throughout the session to close in red”.

Asian Development Bank (ADB) forecast Pakistan’s GDP growth rate to weaken to 2.8 percent for the current fiscal year, however, at the same time it praised the government’s policies for stabilising the economy, she said.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The Asian Development Bank estimate that economy will remain under pressure and might manage a growth of 2.8 percent, lower from last year’s 3.3 percent, which depressed investors”.

“The coming week might bring some sanity and index might recover from the present levels as several companies’ shares have reached attractive levels,” Ahmad said. Saad Hashmey, Executive Director at BMA Capital Management, said, “The market continued its bearish trend with lackluster activity.

Low volumes did not provide opportunities of trading and most of short-term traders preferred to stay out of the market”. Hashmey added that today volumetric contraction was very clear and only low-priced penny stocks like KEL and WTL were volume leaders.

“We expect a volatile secession tomorrow as the last day of week and future contract rollover,” he said. A leading trader said the auto and cement sectors have been on the losing side. Auto sector received fresh beating after companies said sales have been stagnant with stock piles in thousands because of higher prices and slower economic growth, the trader added.

He said this factor would further translate into trimming of profits when they would start reporting financial numbers for the quarter ended September 30, 2019. Moreover, cement sector was also dull because in almost three months the release of funds for public sector development programmes has been quite small.

To date, against the target of Rs701 billion only around Rs 91 billion has been released under this head. The slower release of funds for development has badly affected the cement sales in the country, said an analyst.

The highest gainers were Siemens Pakistan, up Rs25 close at Rs650/share, and ICI Pakistan, up Rs16.30, to finish at Rs482.19/share. Companies that booked highest losses were Colgate Palmolive, down Rs63.51 to close at Rs1985.49/share, and Wyeth Pakistan Limited, down Rs32.75 to close at Rs627.25/share.

K-Electric Limited recorded the highest volumes with a turnover of 31.426 billion shares, gaining Rs0.21 end at Rs3.52/share, while Hascol Petrol’s volumes were lowest at 2.294 million shares, while it lost Rs0.88 to end at Rs20.33/share.