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November 15, 2019

Stocks subdued as late selling pares early gains

November 15, 2019

Stocks on Thursday zigzagged to a subdued close mostly owing to mid- to late-session selling by institutions and insurers in pursuit of profits amid record investor participation, showing strong sentiments across the board, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index was up by only 0.21 percent or 76.24 points to close at 37,243.20 points, while KSE-30 index was almost unchanged with a gain of 0.01 percent or 1.85 points, ending at 17,314.62 points level.

As many as 395 stocks were in action today and of that tally 228 gained, 150 lost, and 17 held the status quo. Volumes swelled to 336.365 million shares, up 22.1 percent, against 275.430 million recorded in the previous session.

Ahsan Mehanti at Arif Habib Corporation said, “Stocks closed higher led by cement, banking and textile scrips on strong earnings outlook“.

End of the protest sit-in in the federal capital, reports on surging banking spreads, central bank’s affirmation on measures for exports, gains in textile and cement sectors, and foreign inflows led to a bullish close amid record high trades at the PSX, Mehanti added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “A closing above 37,000 points has been a good omen but with the index recording strong gains over the last week might attract some adjustment”.

“The sit-in staged by Jamiat Ulema-e-Islam (F) in federal capital is over and investors, feeling that the tension will defuse soon, have started building up their positions.”

With the exchange rate stability in place, rise in foreign exchange reserves and continuous foreign investment in debt market are positive news for the capital market, Ahmed added.

Amin Yousuf, Chief Executive Officer at AKY Securities, said, “[In] the recent rally, the index made substantial gains amid good volumes; however policy rate remains a major concern for investors and a 200 basis points cut in the rate of return on NSS (National Savings Schemes) may not necessarily lead to a slash in the benchmark interest rate”. “A small cut in benchmark interest will help set tone of the market.”

However, with expected increase in gas prices to be finalised by the end this month and a rise in prices of food products, inflation was likely to remain in double digits in the near future, so currently all eyes were set on the monetary policy announcement, Yousuf added.

The KSE-100 index saw heavy bouts of buying and selling, while staying above 37,000 points, indicating strong sentiment across the board. The benchmark index opened with a gain of 250 points and touched the session high of 37,507 points; however, with selling by financial institutions especially mutual funds and insurance companies wiped the early gains, dragging the index down to a low of 37,130 points.

The highest gainers were Bata Pakistan, up Rs80.69 close at Rs1883.90/share, and Island Textile, up Rs58.41 to finish at Rs1494.00/share.

Among the highest losers were the following: Colgate Palmolive, down Rs95 to close at Rs1,825.01/share, and Phillip Morris Pakistan, down Rs49.40 to close at Rs2190.60/share.

Maple Leaf recorded the highest volumes with 38.599 million shares and gained Rs0.15 to end at Rs7.26/share.

With a turnover of 8.008 million shares, Fauji Foods Limited posted the lowest volumes, whereas the scrip lost Rs0.16 to end at Rs11.89/share.