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February 21, 2020

Stocks slouch on erratic financial results; all eyes on FATF


February 21, 2020

Stocks edged down on Thursday as they continue to yo-yo since the start of the week, owing to erratic financial results and lack of triggers, amid the anti-terror financing watchdog’s cliffhanger-like pending decision on Pakistan, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.23 percent or 92.87 points to close at 40,481.65 points level. KSE-30 shares index followed suit with a low of 0.38 percent or 71.44 points to end at 18,721.68 points level.

Ahsan Mehanti from Arif Habib Corporation said stocks closed lower amid thin trade at the PSX on investor concerns over foreign outflows, fiscal risks, and prevailing economic uncertainty. Textile and banking stocks outperformed on strong financials and upbeat data on exports, Mehanti said.

“Weak financial results in autos, cement, and concerns over IMF (International Monetary Fund) resistance over revised revenue targets and tariff reduction brought the index down,” he added.

Of 330 active scrips, 129 made gains, 183 suffered losses, and 18 closed without any change. Volumes retreated to 112.084 million shares as against 142.964 million in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the market witnessed lack of support because of the any enticing development to help improve the overall trend.

“An FATF (Financial Action Task Force) decision on Pakistan is pending as its Paris meeting is in process, but word has it that it will remain in the grey list for now; however its plenary committee acknowledged that the country has taken a number of steps in the right direction,” Ahmed said.

Ahmed emphasised that clarity on the FATF front would help build a rally at the market. Faisal Shaji, strategist at Standard Capital, said, the market activity remained lackluster amid foreign selling figures during the ongoing week.

“The market is devoid of momentum wherein investor participation is weak,” Shaji added. A leading trader said the overall tone had been depressed because of the financial results announced by the company belonging to choice scrips such as automobile, cement, fertiliser, and chemical sectors.

“A few reported higher profits but dividend announcements were below expectations, which triggered selling in patches,” he added. The financial results are a reflection of economy’s true picture as all the key international financial institutions have projected a lower growth in the current fiscal year and it would be lower than 3 percent. During the last fiscal year the

economy recorded a growth of 3.3 percent.

Arif Habib Limited in their daily market round-up said, “Crude oil price went up in the international market, but listed oil & gas chain didn’t respond to it and faced selling pressure”.

The HBL lost significantly over the day after news relating to its exposure in UAE (United Arab Emirates) broke whereby UAE Central Bank hinted at probing the matter”, brokerage house added.

Colgate Palmolive, up Rs98.33 to close at Rs2138.33/share, and Unilever Foods, up Rs50 to finish at Rs7,350/share, were the top gainers of the day. Companies that booked highest losses were Otsuka Pakistan, down Rs23.28 to close at Rs345.11/share, and Bata Pakistan, down Rs20 to close at Rs1,760/share.

Hascol Petrol led the turnover with 8.775 million shares, but it lost Rs0.66 to end at Rs22.47/share. Fauji Foods Limited was the lowest-volume-maker with 2.410 million shares, whereas it shed Rs0.17 to end at Rs11.57/share.