Stocks drift as cracks in economy widen

Stocks on Tuesday drifted to another dull close, as IMF talks deadlock drove investors out of the market amid deepening economic concerns, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index closed lower by 163.20 points or 0.36 percent to settle at 45,255.97 points with the highest and the lowest of the day being 45,516.77 and 45,213.62 points.

Topline Securities in a post-market note said, sentiment remained low in the absence of any positive trigger as there was no progress on IMF programme front and no update on Saudi oil deferral payment facility.

The brokerage said it as yet another lacklustre day with range-bound activity, where the benchmark index cycled in 270 points during trading hours.

During the day, technology, E&P, and banking sector’ stocks saw some profit-taking where TRG, MARI, HBL, UBL, PPL, and OGDC cumulatively lost 182 points while, SYS, MEBL, and HUBC provided some support by contributing 86 points positively.

KSE-30 Shares Index lost 81.51 points or 0.46 percent to close 17,779.19 points against 17,455.54 points.

A total of 163.08 million shares worth Rs5.62 billion were traded in the market.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks closed lower on economic uncertainty and concerns over surging circular debt near to Rs2.3 trillion.

Falling rupee, foreign outflows, and lack of clarity over the outcome of Pakistan-IMF talks contributed to the bearish close, Mehanti said.

Pakistan’s total foreign loans hit $3.2 billion during the first quarter (July-September) of this fiscal year against the disbursement of $2.9 billion in the same period of the fiscal year 2020-21.

In the wake of the rising current account deficit that had already ballooned to $3.2 billion in the first quarter of the current fiscal year, the demand for foreign loans might further go up in order to avoid depletion of foreign exchange reserves.

Pakistan was eyeing to generate $14 billion in shape of foreign loans in the current fiscal year.

On the corporate announcement front, MARI posted 1QFY22 EPS at Rs68.21 (0 percent year-on-year, up 12 percent QoQ). The company’s earnings were in line with industry expectations. ISL declared EPS of Rs6.13 1QFY22 (up 377 percent YoY, up 15 percent QoQ). Earnings were higher than industry expectations.

Ismail Iqbal Securities in its market wrap said stocks traded in a narrow band as there were no triggers in the market.

Trading volume remained flattish with low participation with exploration and production, banks and cements being the major draggers.

HUMNL remained the volume leader with 24.88 million shares with an increase of 14 paisas to Rs6.84/share. It was followed by GGL XB with 8.36 million shares that closed higher by 25 paisas to Rs29.90/share.

Stocks that recorded significant turnover included LOTCHEM, UNITY, TELE XB, BYCO, WTL, TREET, ASL, and TRG.

Top scrips that recorded an increase in the prices included NCML, KOIL, UVIC, HICL, PIL, BUXL, AWTX, KML, STJT, and OML.

Top decliners of the day were SLL, FIBLM, BFMOD, RICL, SGPL, ASHT XB, FPJM, MODAM XD XR, GAMON, and IML.

In the futures market, a total of 132.26 million shares were traded having a value of Rs4.74 billion.