Saturday January 22, 2022

Stocks down as MSCI rebalancing bites

December 01, 2021

Despite five-month high volumes, stocks fell on Tuesday in volatile trade courtesy of MSCI rebalancing amid uncertainty over International Monetary Fund (IMF) loan deal terms and minibudget scares, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index lost 257.67 points or 0.57 percent to 45,072.38 points, testing a day high and a low of 45,757.60 and 44,735.37 points.

JS Research in its market wrap said foreign flows were talk of the town in Tuesday’s session, where MSCI-related stocks were the most prominent.

Healthy activity from foreigners as well as locals was witnessed.

“Going forward, details on the Saudi Package realisation and IMF agreement will decide the market’s direction, the brokerage added.

Ahsan Mehanti at Arif Habib Corp said stocks closed lower on concerns over surge in PIBs’ (Pakistan Investment Bonds) yields up to 246 basis points, weak global equities, and a slump in global crude oil prices.

Uncertainty over conditions of resumed IMF programme, mini-budget taxes, development spending, and petroleum development levies contributed to the bearish close, Mehanti said.

Following the benchmark’s suit, KSE-30 Shares Index also fell 120.87 points or 0.69 percent to 17,429.62 points.

Traded shares, however, increased 143 million to 411.46 million from 268.23 million, while trading value increased to Rs34.82 billion from Rs10.90 billion. Market capital dropped to Rs7.720 trillion from Rs7.758 trillion. Out of 345 companies active in the session, 125 posted gains, 198 losses, while 22 remained unchanged.

Topline Securities in a post-market note said being the cut-off date for Pakistan’s reclassification to the Frontier Market from the Emerging Market above-average activity was seen at the bourse by both local and foreign investors.

The total traded volume hit a 5-month high, while abnormal market volume was witnessed in the negotiated deal market (NDM), where 24.06 million shares worth Rs3.1 billion ($17.62mn) exchanged hands, the brokerage said.

Out of the MSCI list of outgoing stocks, HBL led the volume charts with 31.48 million shares, followed by UBL with 20.84 million shares, and MCB with 20.43 million shares.

In value terms, the largest value was seen in LUCK of Rs5.93 billion ($33.69 million) followed by HBL with Rs3.88 billion ($22.05 million) and MCB with Rs3.17 billion ($18.01 million).

The highest increase was recorded in the shares of Rafhan Maize, which rose Rs237.63 to Rs9,737.63/share, followed by Nestle Pakistan that jumped Rs109.84 to Rs5,390.18/share. Highest decline was noted in shares of Colgate Palm, which fell Rs61.67 to Rs2,425/share, followed by Colgate Palmolive that lost Rs61.67 to end at Rs2,425/share.

Arif Habib Ltd (AHL) in a report said on the MSCI rebalancing day, the index witnessed a volatile session as it made a dicey move of more than 1,000 points, making a close above 45,000 points.

Energy sector stayed in the limelight as the government was considering a scheme to reduce stock of circular debt by declaring dividends for the shareholders of energy sector companies, it reported.

According to AHL analysts, in the last two trading hours, institutional investors bought across the board, while main-board stocks recorded hefty volumes.

Habib Bank was the volume leader with 31.48 million shares, followed by First National Equities with 22.33 million shares.

Turnover in the future contracts slumped to 80.76 million shares from 289.46 million on Monday.