Stocks move sideways to end lower in a trigger-less market

Stocks on Friday dropped after remaining adrift in a financial results-driven market that was in dire need of strong triggers to find a direction, as investors await the upshot of anti-terror financing watchdog’s meeting in Paris, dealers said.

KSE-100, the benchmark index of Pakistan Stock Exchange (PSX), suffered a loss of 0.57 percent or 232.43 points to close at 40,249.22 points, while KSE-30 took a hit of 0.66 percent or 123.71 points to end at 18,597.68 points.

Topline Securities in a note said the market traded sideways during the first half of trading session; however it came under pressure during the second half after index heavy weight Engro Corporation Ltd announced a below-expectation result for 4Q2019.

“Skimpy participation was observed by investors in today`s trading session as they preferred to remain on the sidelines before the FATF (Financial Action Task Force) announcement expected later today (Friday),” the brokerage said.

Activity was witnessed in 330 scrips. A breakdown shows that 131 shares gained 172 weakened, and 23 ended unchanged. The ready market volumes stood at 85.597 million shares, as compared to a turnover of 112.084 million shares in the previous session. Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the market was anxiously waiting for some positive development from the economic and political fronts as all the hurdles now had been overcome.

“With China’s meticulous handling of coronavirus outbreak, global capital markets are on road to recovery. So far, no harsh words have came from the FATF meeting, where Pakistan is likely to get ample time to achieve the set targets. Inflation is also expected to go down as supply side issues have been resolved,” Ahmed said.

Sateesh Balani, director research at Ismail Iqbal Securities, said, “Result announcements are mainly guiding investor sentiment as lower than expected full-year result of Engro Corporation took a toll on its stock price, while better second quarter earnings of Kot Addu Power Company dominated investor interest”.

The trading activity remained lackluster in the absence of any major macroeconomic trigger, Balani said.

Kot Addu Power Company Limited’s profit for the first six months of the current fiscal year jumped 86 percent to Rs11.727 billion (EPS: Rs13.32), compared to Rs6.321 billion (EPS: Rs7.18) posted in the first half of FY2018-19.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Pressure remained in selected scrips across the board amid reports of Pakistan’s persistence in FATF’s grey list until October 2020”.

Strong financial results in fertiliser, oil, and banking sector supported the sentiments, Mehanti said.

“Foreign outflows and concerns over economic uncertainty amid high inflation catalysed a bearish close at the apex bourse,” Mehanti added.

Unilever Foods, up Rs150 close at Rs7,500/share, and Phillip Morris Pakistan, up Rs90.90 to finish at Rs2,488.85/share, emerged as the highest gainers of the day.

On the other hand, Sapphire Textile down Rs61.72 to close at Rs887.95/share, and Sapphire Fibre, down Rs48.94 close at Rs707.91/share, turned out to be the top losers.

Maple Leaf Cement led volumes with 8.083 million traded shares and gained Rs0.30 to end at 23.67/share, while Fauji Foods Limited recorded the lowest turnover with 2.391 million shares, losing Rs0.23 to end at Rs15.33/share.