Stocks end flat as investors focus on budget

Stocks on Thursday ended little changed as investors clung to the sidelines waiting for the federal budget with a bated breath to see as to what extent the government keeps its promises of incentives to revive industry and economic growth, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.18 percent or 63.50 points to close at 35,128.58 points, while its KSE-30 index was up 0.12 percent or 18.46 points to end at 15,330.27 points.

Topline Securities in a report said, “The market opened on a positive note making an intraday high of 188 points, but failed to sustain the rally, and the downward momentum eroded gains as investors interest seems to be transfixed on the FY21 budget”.

However, interest was seen in the chemical sector as DOL and SPL both closed at their upper circuits. Meanwhile MEBL from the financials gained to close 3.59% higher as the bank crossed Rs1trn mark in terms of deposits, the brokerage said.

Of 371 active scrips, 210 moved up, 131 retreated, and 30 remained unchanged. The ready market volumes increased to 270.629 million shares, compared to 218.656 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “Market showed stability amid limited gains in the selected sectors. Mostly, investors are in a positive frame of mind on reports filtering out from the government’s budget-making corridors on fiscal measures to be announced in the federal budget”.

Statements from the government officials that budget would be business-friendly, and incentives would be announced to revitalise the economy hit by the COVID-19 was strengthened sentiments, Ahmad said.

Sateesh Balani, director research at Ismail Iqbal Securities said, “Pakistan's equities remain range-bound through the session as investors remained sidelined ahead of federal budget announcement on Friday”.

SAZEGAR closed at its upper lock, gaining 8.5 percent as Economic Coordination Committee approved electric vehicle policy for 2-3 wheelers, Balani added.

An analyst from Habib Metro-Financial Service, said, “The bourse has found some support during this week on hopes of swift economic recovery and fiscal policy relief in FY21 budget, despite the steep rise in domestic virus cases”.

The FY21 budget, scheduled for tomorrow, was expected to set the direction for the stock market for the near to medium term, he said.

Advisor to the Prime Minister on Finance Abdul Hafeez Shaikh on Thursday presented the Pakistan Economic Survey 2019-20, highlighting the state of the Pakistani economy in the outgoing fiscal year. Shaikh highlighted the fragile state of the economy, which was ravaged considerably by the COVID-19 pandemic in the last quarter of the year.

He revealed that the GDP was expected to contract 0.38 percent in FY2020 despite 2.67 percent growth in the agricultural sector, as the industrial and services sectors see growth of -2.64 percent and -0.59 percent respectively this year.

Unilever Foods, which gained Rs108 to close at Rs9418.00/share, and Rafhan Maize that put on Rs40 to finish at Rs7,000/share emerged as the highest gainers, while Nestle Pakistan, losing Rs175 to close at Rs6,475/share, and Sanofi-Aventis, shedding Rs23.45 to close at Rs816.55/share, were the top losers.

Power Cement recorded the highest volumes with 19.238 million shares and gained Rs0.28 to end at Rs6.35/share. Ghani Global’s turnover was lowest with 5.923 million shares, whereas the scrip gained Rs0.25 to end at Rs13.89/share.