Stocks lose to monetary uncertainties

Stocks on Friday were dragged down by uncertainties ahead of monetary policy announcement on Monday amid renewed security concerns, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Shares Index lost 284.38 points or 0.61 percent to 46,636.08 points touching a top of 47,183.08 points and a low of 46,554.73 points.

Khurram Schehzad, Chief Executive Officer at Alpha Beta Core, a research and analytical advisory platform, said the market recorded positive activity in the morning, but later declined on news that banks would have to pay additional taxes ranging between 2.5 percent to 5 percent if they fail to meet advance-to-deposit ratio (ADR) ceiling.

“Banks having below 40 percent ADR have to pay 5 percent tax, banks having below 50 percent ADR has to pay 2.5 percent tax. If they meet required ceiling, they do not have to pay additions tax,” he said.

KSE-30 index also fell 177.85 points or 0.95 percent to 18,480.32 points.

Traded shares shrank 18 million to 387.29 million from 405.17 million. Traded value slightly dropped to Rs16.23 billion from Rs16.50 billion.

Market capital shrank to Rs8.135 trillion from Rs8.179 trillion. Out of 525 actives, 173 posted gains, 327 losses, while 25 remained neutral.

Analyst Muhammad Arbash at Topline Securities said the index traded in positive zone during the first half of trading session.

However, pressure was observed during the second half, as the index lost gains, he said.

“This pressure in the second half can be attributed to uncertainty over upcoming monetary policy on September 20, 2021 and news that New Zealand cricket team has abandoned Pakistan tour and are making arrangements to leave early citing security concerns,” Arbash said.

The highest gains were recorded in the share price of Gatron Industries, which rose by Rs36.32 to Rs527.50 per share, followed by Ismail Industries that jumped by Rs29.01 to Rs449 per share.

Major decline was noted in share price of Rafhan Maize XD, which fell Rs200 to Rs10,800 per share, followed by Nestle Pakistan that declined Rs77 to Rs5,910 per share.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks closed lower on speculations over central bank policy rate announcement next week and investor concerns on foreign outflows.

Dismal data on current account deficit surging to $1.476 billion in August 2021, weak global crude oil prices, uncertainty over rupee parity led to a bearish close, he said.

WorldCall Telecom was the volume leader after witnessing a trade of 42.41 million shares. The share dropped seven paisas to Rs3.25 per share.

It was followed by TRG Pakistan Ltd with 25.23 million shares that lost Rs2.61 to close at Rs174.05 per share.

Stocks that recorded significant turnover included Byco Petroleum Ltd, TPL Properties, Bank of

Punjab, Telecard Limited, TPL Corp Ltd, Unity Foods Ltd, Bankislami Pakistan, and Silk Bank Ltd.

Share turnover in the future contracts decreased to 94.01 million shares from 117.74 million recorded in the previous session.