Stocks in limbo, awaiting State Bank, FATF decisions

Stocks on Wednesday drifted to a yet another dull end as investors stuck with profit-selling, waiting for the central bank’s monetary policy announcement and global terror financing watchdog’s verdict on Pakistan, dealers said.

The KSE-100 shares index, the bench mark of the Pakistan Stock Exchange (PSX), lost 0.15 percent or 64.14 points to close at 42,282.28 points, while volumes shrank to 489.600 million shares against 662.804 million on Tuesday.

Faisal Shaji, strategist at Standard Capital, said, “The market has been choppy and volatile during last two weeks in continuation”.

“Investors are anxiously awaiting Monetary Policy Committee announcement, scheduled for September 21,” he said.

Investors were concerned about spike in inflation and at least on paper they saw a small hike, Shaji said adding that however, the government wanted to 'appease' the business community with a status quo at best.

How the market fares in the future would remain depended upon the key economic events, the strategist said.

”Also the government is struggling getting FATF-related bills passed in Senate, which investors were indeed watching curiously,” Shaji added.

KSE-30 shares also gave up 0.18 percent or 31.65 points to end at 17,910.68 points.

Muhammad Saeed Khalid, head of research at Shajar Capital, said, “Selling pressure continued at the PSX; however, the index marked an intra-day high of 198 points".

“The market remained volatile mainly on the intra-day profit-taking activity, despite the healthy Large Scale Manufacturing date along with the passing of anti-terrorism bill in the National Assembly,” Khalid added.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed lower in thin volumes on concerns over economic uncertainty”.

LSM (Large Scale Manufacturing) growth up 5.02 percent YoY in July and surging global crude oil prices invited mid season support, he added.

“ADB projections on slower growth GDP growth for FY21, weak global equities, and uncertainty over exports in cement and textile sector proved a drag for stocks,” Mehanti added.

Trading activity was recorded in 414 active scrips, of which 148 gained, 250 lost, and 16 remained unchanged.

Shahab Farooq, director research at Next Capital, said, “With relatively reduced volumes compared to the recent trends, the market continued to experience profit-selling mainly in banks, while remaining extremely volatile”. Moreover, the value buying at lower levels resulted in the KSE-100 index closing marginally lower, Farooq added.

Umair Naseer from BMA Capital sales desk said, “Profit-taking persisted amid thin trad due to uncertainty over the outcome of FATF review of Pakistan’s progress on compliance targets”.

“Going forward, sentiment will largely depend on any positive developments on FATF and Monetary Policy announcement (scheduled for September 21) fronts,” Naseer added.

The top gainers included Hinopak Motor, up Rs40.08 to close at Rs759.76/share, and Bata Pakistan, up Rs25.85 to finish at Rs1621.50/share, while the top losers comprised Pakistan Tobacco, down Rs65.20 to close at Rs1,724.80/share, and Island Textile, down Rs40.50 to close at Rs966.50/share.

With 70.582 million shares K-Electric was on top of volumes chart, down Rs0.05 to end at Rs4.07/share, while TRG Pakistan Ltd with 14.900 million traded shares was at the bottom and it lost Rs0.54 to end at Rs57.43/share.