More losses for PSX as investors sell for profits

Stocks on Thursday threw away a good deal of gains as profit-selling persisted in the absence of buying triggers amid rollover week worries, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares Index shed 0.67 percent or 323.27 points to close at 48,157.63 points. The ready market volumes stood at 1.11 billion shares compared with the turnover of 936.6 million shares in the last trading session.

Topline Securities in its daily market review said equities closed negative as profit-taking was witnessed in the second half because investors preferred to keep their guard up owing to the rollover week ahead and lack of positive triggers.

HUBC and TRG Pakistan hurt the index the most, the brokerage said.

As many as 413 scrips were active of which 116 advanced, 283 declined and 14 remained unchanged.

Ahsan Mehanti at Arif Habib Corp said stocks fell sharply lower amid consolidation in the post-budget session, slump in crude oil prices, and weak global equities.

Investor concerns over hike in power tariff, foreign outflows, and political noise pulled the index down, Mehanti added. KSE-30 Shares Index lost 0.65 percent or 126.68 points to close at 19,421.09 points.

An analyst said market tumbled as refineries, oil and gas marketing companies, cement, engineering, banking, fertiliser, and technology stocks saw persistent selling pressure despite budget incentives announced last Friday.

Exploration and production (E&P) companies were relatively unscathed because of stable oil prices, which hovered around $74/bbl.

An analyst at Pearl Securities said the market ended the day in the red territory where banking, power, and oil marketing companies cumulatively eroded 140 points from the index. “Volatility prevailed as IMF (International Monetary Fund) programme has been delayed for three months and investors were also concerned over FATF (Financial Action Task Force) meeting which is due next week,” the analyst said.

Furthermore, he said the ECC (Economic Coordination Committee) had decided to defer the payments of Independent Power Producers (IPPs), which further drop the market sentiment.

“It is hoped there will be good news for Pakistan at the FATF's Plenary Session starting June 21 as Pakistan has implemented 26 of the 27-points of the FATF Action Plan,” the Pearl Securities analyst said. According to Finance Minister Shaukat Tarin, the talks with the Fund over the sixth economic review have remained inconclusive. “The government cannot put burden on the poor,” Tarin said adding that talks with the Fund would continue.

The IMF would review the country’s economic performance over the next two to three months in September 2021.

Both sides are working to reach a sweet spot over new taxation measures amid the government’s willingness to jack up sales tax rate on fertiliser to 10 percent and impose a 17 percent tax on the import of crude oil to raise Rs115 billion. Analysts said the market is expected to keep swinging, and profit-booking on strength is the best advisable course of action.

Wyeth Pakistan, putting on Rs82.45 to close at Rs2,325.83/share, and Nestle Pakistan, securing Rs30 to close at Rs5,780/share, were the best gainers of the day. Island Textile, shedding Rs50.01 to close at Rs2,250/share, and Pak Services, giving up Rs30.67 to end at Rs910.12/share, ended the day with most losses. Highest volumes were witnessed in Worldcall Telecom that posted a turnover of 243.17 million shares. The scrip gained 17 paisas to close at Rs4.01 share. Silk Bank was second with a turnover of 188.56 million shares. It gained 23 paisas to close at Rs1.8/share. K-Electric was third with a turnover of 57.43 million shares. It shed 11 paisas to finish at Rs4.36.