Stocks flat as investors value profits in volatile trade

Stocks were little changed on Friday as investors went after profits in an erratic trade, which was punctuated by small corrections throughout the session; however, a regional lender’s approval of new loans to Pakistan spurred late institutional support, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index ticked 0.22 percent higher (91.15 points) to close at 40,732.25 points, whereas KSE-30 edged up 0.15 percent or 27.53 points to end at 18,598.68 points level.

Of 382 active scrips, 185 advanced, 185 retreated, and 12 ended neutral. Around 416.921 million shares changed hands on Friday, compared to 507.900 million Thursday.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The market, after some early adjustment or expected profit-taking, saw a boost in sentiments [on the notion] that correction is over”.

Investors also cheered Asian Development Bank’s (ADB) approval for a loan for Pakistan including an amount for budgetary support to help resolve circular debt issues, Ahmad said.

“Next week, the market may face some resistance as index is nearing the 41,000 points’ level, closing above which is quite important for the market to see some more recovery in near term,” he added.

The ADB on Friday approved $1 billion in immediate budget support to Pakistan to shore up the country’s public finances and help strengthen a slowing economy.

The financing was approved after the government implemented a series of IMF-supported reforms and actions to improve its current account deficit, strengthen its revenue base, and protect the poor against the social impact of the economic crisis.

The lender in a statement said quick dispersing Special Policy-Based Loan was part of a comprehensive multidonor economic reform programme led by the International Monetary Fund to stabilise Pakistan’s economy.

Analyst Ahsan Mehanti at Arif Habib Corporation said bullish activity was witnessed at the PSX in selected scrips across the board in the pre-earnings season rally on renewed foreign inflows, upbeat economic data on foreign exchange reserves, and Moody’s upgrade of economic and banks outlook.

“Reports of upbeat petroleum products, cement, and fertiliser sales contributed to the bullish close,” Mehanti added.

Investors in the first half of the session were quite cautious and profit-taking set in on concerns over mini-budget due to lower than targeted tax collections and accumulation of tax refunds; however, exemption of naya housing scheme from taxes helped revive the sentiment to some extent.

Faisal Shaji, strategist at Standard Capital, said, “The market continued to be volatile with short-term intraday corrections”.

Investor participation is increasing amid higher volumes, Shaji added.

The highest gainers were Nestle Pakistan, securing Rs345 to close at Rs7,245/share, and Colgate Palmolive, gaining Rs99.22 to finish at Rs2,083.72/share.

Companies booking highest losses were Bata Pakistan, losing Rs47.51 to close at Rs2078.98/share, and Wyeth Pakistan Limited, down Rs26.18 to close at Rs837.15/share.

United Foods Limited recorded the highest volumes with a turnover of 53.506 billion shares, while the share strengthened Rs0.82 to end at Rs11.26/share. The lowest volumes were witnessed in Sui Northern Gas recording a turnover of 8.870 million shares, whereas the scrip gained Rs2.87 to end at Rs82.10/share.