PSX flat as political, economic noise mutes trade

Stocks on Monday ended barely changed as ongoing economic and political uncertainties reduced participation to mere insignificance, thinning the volumes drastically, traders said.

With a loss of 12.89 points or 0.03 percent, Pakistan Stock Exchange's (PSX) benchmark KSE-100-share Index closed at 45,736.26 with the highest and lowest of the session being 45,910.68 points and 45,544.99 points, respectively.

Zafar Moti, former director of the PSX, said investors avoided entering the market, which kept the volumes very low. Some buyers did enter, but they were unable to influence the market because their part in trade was very small, he said.

“Besides, there was political uncertainty in Islamabad, which created negativity in the capital market,” Moti added. Arif Habib Corp’s Ahsan Mehanti said stocks closed lower in thin trade on concerns over political noise and economic uncertainty.

A one percent raise in Cash Reserve Requirement (CRR) for the banking sector, surge in government bond yields, and uncertainty over Pakistan-IMF resolve for resumption of loan programme weighed on trade, he said.

KSE-30 Shares Index, however, managed to inch up 20.34 points or 0.11 percent to end at 17,746.20 points.

Traded shares decreased 20 million shares to 172.85 million from 192.46 million, while traded value dropped to Rs5.13 billion from Rs7.66 billion. Market capital decreased to Rs7.807 trillion from Rs7.818 trillion. Out of 345 active names, 125 advanced, 191 retreated, while 29 remained unchanged.

Brokerage Topline Securities in a post-market note said equities initiated the week with lackluster activity as the market remained directionless during the trading hours amidst the low volumes.

PSX opened on a slightly bearish note, made an intraday low at 45,545 index level (down 204 points or 0.45 percent) mostly because of 28-week high weekly inflation (SPI) numbers, remittances falling month-on-month and upward revision in CRR by the central bank over the weekend, the brokerage said.

SBP tightened the money supply by increasing the CRR by 100bps to 6 percent. As per SBP’s notification, this will moderate the money supply and domestic demand, so that economy does not overheat and continue its growth trajectory. This will also help in achieving the government’s medium-term inflation target.

However, in the latter half of the day, according to Topline report, fresh buying at lower levels helped the benchmark index to hit a day-high of 45,911 points, up 162 points or 0.35 percent.

Major laggards of the day were LUCK, TRG, MCB, UNITY, and SEARL as they cumulatively killed 101 points, while SYS, HBL, and ENGRO together added 92 points to the benchmark index, the brokerage report said.

Day’s top gainer was Colgate Palmolive, up Rs68.99 to close at Rs2,500/share, followed by Bata (Pakistan) that jumped Rs59.83 to Rs1,909/share.

Unilever Foods was the most battered stock, down Rs529.50 to end at Rs18,949.50/share, followed by Ismail Industries that fell Rs35.03 to Rs432.12/share.

Hascol Petrol led volumes chart with 18.57 million shares, while Ghani Global Holdings was the second highest traded stock with 17.84 million shares.

Stocks that recorded significant turnover included WorldCall Telecom, Unity Foods Ltd, Fauji Foods (R), Byco Petroleum, Telecard Limited, Merit Pack (R), K-Electric, and Engro Polymer. Turnover in the future contracts decreased to 47.37 million shares from 62.58 million on the last trading day.