Stocks remain plateaued on institutional profit-taking

Stocks on Tuesday ended almost unchanged for second straight session on institutional profit-taking, while investors, mostly in a risk-off mode, are seen sitting on the fence ahead of monetary policy announcement this month, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.03 percent or 11.63 points to close at 43,207.04 points, while KSE-30 ticked 0.01 percent lower or 2.45 points to end at 20,030.06 points.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stock closedlower as institutional investors booked profits in earnings season after reports of dismal auto sales in December 2019 and Fitch ratings report on higher inflation and fiscal deficit in coming months”.

Political noise, investor concerns over subdued economic growth, reports of rising circular debt receivables in energy sector, and surging fiscal deficit weighed on the market, Mehanti added.

Of 376 active scrips, 173 were up, 187 down, and 16 remained unchanged. The ready market volumes were down at 249.669 million shares, compared to 366.135 million on Monday.

Salman Ahmad, head of institutional sales at Abba Ali Habib Securities, said “The market is anxiously waiting for interest rate announcement”.

“The date has yet not been announced but there are expectations of a token cut.” Selective buying was witnessed from institutions, Salman added.

An analyst at Topline Securities said investors opted to book profits after recent bull-run at the index. “Engro Polymer and Chemical closed negatively by 3.78 percent after the company announced issuance of preference shares, raising concerns on dividend payouts to ordinary shareholders,” the brokerage analyst said.

Habib Metro-Financial Service said, “Going forward, we foresee the index to stay sluggish, while fresh triggers will set its near term direction”. “The anticipation of better macro-economic fundamentals would lead us to see a bullish stance in mid-long term,” the analyst added. The market moved both ways during the session and saw bouts of selling and buying. During the session, the index touched a day-low of 43,218 and a high of 43,468 points.

According to a leading trader the some encouraging developments are needed to help boost the index levels. “Investors have been accumulating stocks slowly with some adjustments in sight.” The index before crossing 40,000, 41,000, and 42,000 points marks saw active selling and adjustments, the trader added.

Arif Habib Limited in a note said, “The market replicated yesterday’s performance with a sway from +250 points to -123 points and closing the session with -12 points”.

Mainly cyclicals faced the music as major selling pressure was witnessed in cement stocks (due to higher coal prices) and steel sector shares, the brokerage house added.

The highest gainers were Shezan International, up Rs24.99 close at Rs558.99/share, and Mehmood Textile, up Rs21 to finish at Rs442/share. Companies that booked highest losses were Colgate Palmolive, down Rs100 to close at Rs2,500.00/share, and Nestle Pakistan, down Rs75 to close at Rs8,000/share.

Bank of Punjab recorded the highest volumes with 18.020 million shares and gained Rs0.1 to end at Rs13.38/share. Pakistan Elektron’s turnover was lowest with 6.063 million shares, whereas the scrip gained Rs0.57 to end at Rs28.26/share.