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Friday March 29, 2024

Stocks end flat in lacklustre trade

By Our Correspondent
October 10, 2019

Stocks on Wednesday ended almost unchanged as adjustment was in full swing with institutional investors sitting back strategically waiting for some correction to reenter the market when the valuations are ripe, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index was up by only 0.14 percent or 47.12 points to close at 33,523.74 points, with its KSE-30 index gaining a paltry 0.12 percent or 19.06 points to end at 15,754.76 points.

Of 379 active scrips, 202 up, 152 retreated, and 25 remained unchanged. The ready market volumes stood at 237.676 million shares, as compared with the turnover of 243.025 million shares in the previous session.

Madiha Javed, head of research at Ismail Iqbal Securities, said, “The market ended on a slightly positive note after being range-bound throughout the day”. For 2QFY20, the central bank aims to raise Rs4.25 trillion from the market through government

securities (fixed and floating) and investors will look ahead to the market treasury bills’ auction where cutoff yields are expected to come down in-line with secondary yields, Javed said.

Pharmaceuticals, oil and gas exploration companies, and commercial banks cumulatively contributed 67 points to the index, she added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “Investors have been anxiously waiting for some announcements from Prime Minister Imran Khan’s visit to China, where news have been afloat that some agreement would be reached with China over a Free Trade Agreement”.

“There’s likelihood that some new products would be added which would give much needed support to Pakistani export.”

Ahmad said the future course of the market would become clear following FATF (Financial Action Task Force) meeting in Paris.

Ahsan Mehanti from Arif Habib Corporations said, “Stock showed recovery in the earnings season rally led by selected scrips across the board as investors weighed recovery in global crude oil prices and foreign inflows”.

“Renewed hopes for expedition in CPEC (China-Pakistan Economic Corridor) projects amid setup of a authority and tax relief in Gwadar and improving relations between two countries kept the sentiment buoyant,” Mehanti said.

A leading trader said to fund the central government, reliance on borrowing through selling of securities was on increasing, with the yields going down, the only hope for the investors was a cut in benchmark interest rate. In over a year’s period of this government interest rate had seen an increase of 5.75 percent, the trader added.

A selling pressure reigned supreme the whole session; however, active buying emerging just before the end helped the market end green amid concerns the rising government debt would further impede the economic growth. In the PTI government alone the central government debt increased by Rs7.5 trillion to Rs32.24 trillion.

The highest gainers were Bata Pakistan, up Rs74.50 close at Rs1618.00/share, and Mari Petroleum, up Rs45.61 to finish at Rs1058.15/share.

Companies that booked highest losses were Unilever Foods, down Rs249 to close at Rs5,551/share, and Colgate Palmolive, down Rs38.35 to close at Rs1775.01/share.

Lotte Chemical recorded the highest volumes with 27.067 million shares and gained Rs1 to end at Rs15.48/share.

Fauji Foods Limited’s turnover was the lowest at 6.421 million shares, whereas the scrip gained Rs0.73 to close at Rs12.56/share.