Stocks tumble as institutions hedge bets
Stocks took a major battering on Monday after institutions launched a position-squaring spree amid lukewarm sentiment owing to MSCI worries and FATF letdown, dealers said.
Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index lost 601.01 points or 1.26 percent to close at 47,002.35 points, hitting a day high of 47,659.19 points and a low of 46,900.26 points.
Haris S Khan, an analyst at brokerage Topline Securities, said equities opened the week on a bearish note and came under selling pressure due to an outstanding futures position, June 2021 financial close, and concerns regarding the MSCI reclassification review.
Moreover, the FATF (Financial Action Task Force) decision to keep Pakistan on the grey list and a current account deficit of $632 million further dampened investor sentiment at the bourse, Khan added.
Selling ruled supreme across the board especially in cement, banks, and E&P (exploration and production) sectors. Major laggards were HBL, LUCK, UBL, HUBC, and MCB that together ejected around 220 points.
KSE-30 Share Index also decreased 240.64 points or 1.26 percent to 18,873.04 points against 19,113.68 points.
Investor interest remained in cements and financial sector, where CHCC, LUCK, UBL, and HBL were the major gainers. Turnover shrank 106 million shares to 655.12 million against 761.42 million shares previously. Trading value fell to Rs18.86 billion against Rs21.74 billion, while market capital dropped to 8.224 trillion from 8.316 trillion. Out of 416 companies’ active in the session, 78 gained, 315 ended in the red, while 23 were unchanged.
Analyst Ahsan Mehanti at Arif Habib Corp, said stocks fell across the board on institutional selling amid likely MSCI downgrade to frontier market status by September 7 this year and FATF decision on Pakistan action plan keeping it on grey list.
Support remained on higher global crude oil prices, reduction of taxes in the auto sector, and rupee stability. Foreign selling, reports of $632 million current account deficit in May 2021 and concerns over IMF conditions for raising power tariff, taxes led the losses in the session, Mehanti added.
Highest gains were recorded in shares of Hinopak Motor, which rose Rs42.95 to close at Rs615.62 per share, followed by Pak Tobacco that gained Rs24.40 to Rs1,401 per share. Major decline was noted in shares of Bata (Pak), which fell Rs70.60 to Rs1,660.43 per share, followed by Sanofi-Aventis that lost Rs46.94 to end at Rs923.06 per share. Zafar Moti, a senior member of PSX, said HASCOL was put on defaulter counter, which created the pressure.
Moti said the company did not give divided for two year adding besides, political crisis, Afghanistan issue, dollar-rupee parity and oil price hike also affected the market sentiment.
He was of the view that investors were also taking money out for the Eid-ul-Azha. Significant turnover was recorded in WorldCall Telecom, Byco Petroleum, Jahangir Siddiqui (R), K-Electric Ltd, Treet Corp, Silk Bank Ltd, Waves Singer, Ghani Global Glass, Hum Network, and Unity Foods Ltd.
WorldCall Telecom remained the volume leader with 98.86 million shares with a drop of 14 paisas to Rs3.81 per share. It was followed by Byco Petroleum with 52.86 million shares. The share lost 75 paisas to close at Rs11.40 per share.
Shares’ turnover in the future contracts reduced to 123.61 million shares from 354.06 million shares traded in the previous session.
