PSX losses deepen as investors punish earnings misses

Stocks landed more losses on Thursday as investors continued to shed names that disappointed them in terms of dividend announcement amid concerns over IMF’s demands to abolish Rs150 billion corporate income tax exemptions and circular debt plan, dealers said.

Pakistan stock exchange (PSX) KSE-100 shares index shed 1.34 percent or 625.4 points to close at 46,142.74 points. KSE-30 shares index shed 1.76 percent or 344.28 points to close at 19,216.31 points. As many as 412 scrips were active of which 140 advanced, 250 declined and 22 remained unchanged.

Topline Securities in its daily market review said after a slightly positive opening, the market slipped into the negative zone and remained there through the day as investors seemed wary of the upcoming rollover period next week.

“We have noticed strong selling in the market where investors booked profits on the prevailing uncertainty about the renewal of circular debt plan as per the IMF conditions,” Muhamad Saeed Khalid at Shajar Capital said.

Kahlid added that investors remained cautious ahead of FATF meeting later in the next week along with the IMF condition to rebut Rs150 billion tax exemptions to corporate sector.

Ahsan Mehanti at Arif Habib Corp said stocks closed bearish amid slump in global equities.

Investor concerns over likely Rs700 billion additional taxes, surge in base power tariff on corporate sector in the reinstated IMF program, and foreign outflows dragged the index down, Mehanti added.

Volumes shrank to 577.95 million shares compared from 701.76 million on Wednesday.

Zaid Aftab at Pearl Securities said the corporate results including Pakistan State Oil, and Engro, Meezan Bank, failed to excite investors during the day, which eroded the blue-chip stocks and ultimately the index.

Sapphire Textile, up Rs66.75 to close at Rs956.86/share, and Bata Pakistan, up Rs58 to close at Rs1,838/share made most of the gains in the day, while Nestle Pakistan, down Rs78.45 to close at Rs6,121.55/share and Mari Petroleum down Rs33.06 to end at Rs1,595.37/share recorded worst losses.

An analyst at JS Global Capital said the equity market was in a bear hug as profit-booking weighed the index down. “Profit-taking also surfaced in the cement sector following Thursday’s rally,” the analyst said.

A report issued by Arif Habib Limited noted the market saw aggressive selling after a spate of financial result announcements that posted consistent earnings but declared lower than expected dividends.

Banking sector saw major attrition today; however, profit booking was also observed in cement, oil and gas marketing companies and E&P sectors, the brokerage said.

The market in the last two trading sessions has seen correction after below average results/payouts by leading listed companies. Going forward, analysts expect the market to remain in a volatile zone.

Sector-wise losses were led by banks (-247 points), followed by cement (-83 points), fertiliser (74 points), and E&P (-68 points).

Dost Steels Limited posted highest trade with 58.66 million shares and shed 66 paisas to close at Rs5.94/share.

Telecard Limited was second on turnover chart with 34.34 million shares. It gained 52 paisas to close at Rs8.28/share.

K-Electric Limited was third with a turnover of 29.3 million shares and it shed 05 paisas to finish at Rs4.10/share.