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Tuesday March 19, 2024

Stocks edge lower; market awaits FATF decision

By Our Correspondent
October 16, 2019

Stocks ticked lower on Tuesday as calculated investors picked profits in an overbought environment, anxiously awaiting money laundering and terror financing watchdog’s decision on Pakistan’s status amid mixed sentiments, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.30 percent or 102.73 points to close at 34,083.53 points, whereas KSE-30 edged 0.51 percent or 81.99 points lower to end at 16,007.73 points.

Of 368 active scrips, 185 advanced, 158 retreated, and 25 were unchanged. Around 156.402 million shares changed hands today, compared to 137.932 million shares yesterday.

Ahsan Mehanti from Arif Habib Corp said, “Stocks closed lower on institutional profit-taking amid slide in global crude oil prices and concerns over weak corporate earnings outlook”. Mid-session support remained on speculations on likely avoidance of FATF (Financial Action Task Force) blacklisting as Pakistan showed progress over major targets for compliance, Mehanti said.

“Furthermore, the uncertainty over outcome of finance minister’s meetings with IMF (International Monetary Fund) and WB (World Bank) and concerns over political uncertainty weighed on overbought scrips,” Mehanti added.

The FATF examined Islamabad’s compliance report in its meeting held in Paris on Monday and the proceedings presented that Pakistan’s chances of averting a blacklisting are comparatively brighter now.

The market hit a session-low of 33,929 points, but recovered before the close to touch a high of 34,259 points. The players are anxiously waiting for a positive outcome from the FATF meeting that started on October 13 and would end on 18th.

According to a leading trader, a range of rumors was doing the rounds at the market that hurt the sentiment; however, at the same time hopes were also high that with a number of measures taken since August 2018 meeting to overcome the menace of money laundering and terror financing, Pakistan would emerge safe.

“The government’s drive to document economy to halt the flow of black money might convince the terror financing watchdog to at least keep the country in the grey list for the time being,” he said.

A leading analyst from Arif Habib said, “Largely, oil and gas chain and auto sector kept the index under pressure, which was due to lower international crude prices”.

He said the second day of FATF proceedings, on the whole, gave positive vibes helping investors maintain interest. “Brokerage commission, which also proved to be an issue, had a slight impact on the activity. Volumes, nonetheless, inched up over the day,” the analyst said.

Pakistan Stock Exchange (PSX) on Monday announced standard commission rates to be collected by brokerages from customers for processing orders in different types of transactions, a development that delighted the brokers, but dismayed the day traders.

The PSX, in an official notification, said the minimum commission range would be Re0.3/share or 0.15 percent of the transaction value -whichever was higher. The announcement did not go well with the day traders, who even staged a small protest at the PSX, fearing an increase in the cost of trading.

The highest gainers were Unilever Foods, up Rs321.04 close at Rs6746.99/share, and Colgate Palmolive up Rs50 to finish at Rs1949.99/share.

The top losers were Sanofi-Aventis, down Rs22.50 to close at Rs527.10/share, and Ismail Industries down Rs18 to close at Rs350/share.

WorldCall Telecom recorded the highest volumes with a turnover of 18.275 billion shares, gaining Rs0.01 end at Rs1.07/share. K-Electric Limited’s turnover was the lowest with 4.753 million shares, whereas the scrip lost Rs0.03 to end at Rs3.98/share.