Stocks down as banks punished for peanut dividends

Stocks fell on Monday, the first day of the futures’ rollover week, with banks leading the losses after furious investors buffeted the sector for disappointing dividend announcements, dealers said.

Pakistan stock exchange (PSX) KSE-100 shares index shed 0.73 percent or 337.61 points to close at 45,890.04 points. KSE-30 shares index shed 0.89 percent or 171.55 points to close at 19,059.09 points. Volumes increased to 722.052 million shares from 694.8 million in the last trading session. Out of 414 active scrips, 162 advanced, 230, retreated, and 22 remained unchanged.

Ahsan Mehanti At Arif Habib Corp said stocks closed bearish amid pressure in the future contracts rollover week and uncertainty over FATF meeting decision on Pakistan’s exit from grey list.

“Fertiliser and banking sector outperformed on surge in local fertiliser prices and strong banking financials. However, investor concerns over likely Rs700 billion additional taxes in reinstated IMF program, 27 percent decline in foreign direct investment in January and political noise weighed on trade.”

Topline Securities in its daily market review said equities witnessed profit-taking as investors took cautious stance owing to the virtual FATF plenary session and the futures rollover week, both staring Monday.

Banks were the major laggards with HBL, UBL, and MCB Bank cumulatively lost 190 points, while Oil and Gas Development Company, Pakistan Petroleum Limited, and Pakistan Oilfields (POL) dented the index by 70 points, the brokerage report added.

An analyst at Arif Habib Limited said market fell on the first day of the rollover week, mostly because of the disappointing dividend announcements by banks, while UBL’s result, scheduled for Wednesday, was also being anticipated to be in line with bleak market expectations .

“FATF plenary session starts today with the anticipation of status quo, which has also caused a bit of concern among investors holding on to the positions in hope of positive conclusion,” the Arif Habib Ltd analyst added.

Banking sector came under selling pressure and as a result UBL lost 4.1 percent, HBL 3.5 percent, Bank Al-Falah 3.3 percent, and BOP closed 2.0 percent down.

Cement sector was no different. Kohat Cement lost 3.1 percent, Cherat Cement 2.3 percent, while Fauji Cement and D.G Khan Cement shed 1.1 percent each.

Moving forward, analysts except the market to remain volatile due to the ongoing FATF meeting and recommend investors to avai any downside as an opportunity to build positions in the cement, steel and refinery sectors.

Bhanero Textile, up Rs33.33 to close at Rs930/share, and Hinopak Motors, securing Rs23.65 to close at Rs372.2/share, were the top gainers of the day, while Rafhan Maize, down Rs388 to close at Rs9,712/share, and Nestle Pakistan, down Rs79.94 to end at Rs6,120.06/share ended up as the worst losers.

With 114.34 million traded shares, Hum Network led volumes, while it gained 52 paisas to close at Rs8.13/share. Byco Petroleum was the second highest traded stocks with 109.099 million shares and it gained 67 paisas to close at Rs10.97/share. TRG Pakistan was third on the volume chart with 46.40 million shares. It gained Rs9.75 to finish at Rs146.59.