Stocks end lower on renewed economic concerns

Stocks on Friday booked losses as investors remained on tenterhooks waiting for the International Monetary Fund (IMF) verdict on the state of the country’s beleaguered economy, amid renewed macroeconomic concerns, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index lost 0.52 percent or 212.18 points to close at 40,243.26 points level, while KSE-30 shares index followed suit with a low of 0.29 percent or 54.69 points to end at 18,598.66 points level.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed bearish amid thin trade on investor concerns over economic uncertainty”.

Foreign outflows, dismal data on private sector credit off-take for July-January period, weak financial results in cements and steel makers and concerns over IMF resistance over revised revenue targets and tariff reduction overwhelmed the stocks, Mehanti added.

Of 326 active scrips, 95 moved up, 211 settled lower, and 20 ended unchanged. The ready market volumes shrank to 117.597 million shares, as compared with the turnover of 197.436 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said “The tone of the market was generally mixed to downward, where no final word from the International Monetary Fund and finance minister over the recent parleys force the investors to stay on the back foot”.

“The market gained momentum two sessions ago on reports that IMF and finance ministry talks have concluded and several agreements have been reached including tax revision and no-mini budget was on cards, which raised investor hopes.”

However, a delay in announcement of the outcome of the IMF-Pakistan meetings, with FATF meeting next week, added to the selling pressure in key scrips, Salman added.

A leading analyst said overall sentiment was negative because of renewed concerns over slower economic growth, below target agriculture growth, power and gas tariff restructuring, IMF’s continuous pressure for hiking energy/power prices to overcome losses and pilferage in the state-run companies.

“Moreover, the reflection of economic slowdown can easily be seen in the corporate financial results as several announcements came below expectation, which further triggered selling in selected stocks,” he added.

According to media reports both sides (Pakistan and IMF) were busy ironing out differences over revenue generation efforts as the Federal Board of Revenue wants a further reduction in its revised target of Rs5.238 trillion but the IMF desires to see the plan aimed at removing distortions and expanding a narrow tax base on a permanent basis.

Reportedly IMF was still insisting that if the need arises, the government must take measures to correct the situation halfway instead of waiting for the worsening of the situation till next fiscal year.

The highest gainers were Shezan International, up Rs22.79 close at Rs415.99/share, and Colgate Palmolive, up Rs22.50 to finish at Rs2,100/share.

Companies that booked highest losses were Pakistan Tobacco, down Rs136.11 to close at Rs2,134/share, and Sapphire Fibre, down Rs48 to close at Rs762/share.

Pakistan International Bulk recorded the highest volumes with a turnover of 17.542 million shares and gained Rs0.13 to end at Rs11.23/share.

Pakistan Refinery’s turnover was lowest of the day with 2.710 million traded shares; however, the scrip gained Rs0.87 to end at Rs22.11/share.