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Tuesday March 19, 2024

Stocks end flat after seesaw session on FATF, investor wariness

By Our Correspondent
October 19, 2019

Stocks ended flat on Friday in choppy trade as investors worried that a not so positive review on Pakistan by an anti-terror financing watchdog may erode recent gains in equities, dealers said.

The anti-terror financing taskmaster told off Pakistan for faltering on most of its assignments, giving Islamabad only four months to complete its homework to avoid blacklisting.

Pakistan Stock Exchange’s (PSX) KSE-100 shares index eased 0.08 percent (-28.41 points) to close at 33,870.15 points; however, KSE-30 was up 0.04 percent (6.43 points) to end at 15,828.63 points.

Activity was witnessed in 367 stocks and a breakdown shows that 136 gained, 207 lost, and 24 ended neutral, while turnover thinned to 115.228 million shares, compared to 137.994 million in the previous session.

Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed lower on selling pressure after FATF (Financial Action Task Force) raised concerns over the overall lack of progress by Pakistan in addressing its terror financing risks and its failure to complete its action plan, urging Islamabad to complete it by February 2020”.

Mehanti said strong quarterly financial results in oil and banking sectors were seen to have invited an early session rally, but it did not sustain.

“Investor concerns over political and economic uncertainty weighed on the market,” Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The market was mixed-to-down owing to FATF decision keeping Pakistan on grey list, concerns over likely political tumult as some parties are set to stage sin-downs in Islamabad, and weekend considerations”.

There was a need of some positive development on the economic horizon to cheer up investors especially in the form of foreign direct investment by company or a country, Admad added.

At the end of its plenary meeting in the French capital, the FATF said,” Pakistan has been asked to swiftly complete its full action plan by February 2020”. “Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan,” the terror financing watchdog said in its statement.

“While noting recent improvements, the FATF again expresses serious concerns with the overall lack of progress by Pakistan to address its terrorism financing risks,” the intergovernmental organisation added.

The market was going up during the first half, but started falling in the second; however, it closed almost flat mostly reacting to FATF decision which was in line with market expectations. Still, some analysts were expecting that Pakistan might see a movement towards the white list from the grey but it failed to happen.

The stock market remained unmoved despite the announcement of some upbeat numbers, especially foreign investment.

Top gainers were Unilever Foods, up Rs299.50 close at Rs6999.50/share, and Nestle Pakistan, up Rs239.24 to finish at Rs5764.24/share.

Phillip Morris Pakistan, down Rs152.50 to close at Rs2897.50/share, and Pakistan Tobacco, down Rs99 to close at Rs2300.00/share, were the top losers of the day.

Lotte Chemical saw the highest volumes with 18.392 million traded shares, but lost Rs0.48 to end at Rs16.13/share.

Maple Leaf’s turnover was the lowest with 2.561 million traded shares, while it shed Rs0.09 to end at Rs16.79/share.