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Wednesday August 17, 2022

Stocks retreat as minibudget remains stuck in parliament

By Our Correspondent
January 14, 2022

Stocks fell on Thursday as supplementary finance bill blockade in parliament had investors guessing what’s next, while a burst of Covid variant cases stoked fresh economic fears, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index shed 153.05 points or 0.33 percent to close at 45,763.20 points, hitting an intraday high of 46,002.43 points and a low of 45,693.95 points.

Pearl Securities in its market wrap said the stocks started the day on a positive note, but bears took over and remained in control for the rest of day, thus, the market ended in red zone.

The voting on the finance bill was facing strong opposition in both houses, which kept the market under pressure, the brokerage said.

The report further said international oil prices at $85/bbl coupled with the highest inflation rate in the US of 7 percent also impacted the market.

Lastly, an exponential rise in Covid cases also kept investors at bay, the brokerage said.

Zafar Moti, former director PSX, said the market was in a bit of depression in the day, and saw some selling pressure.

“Trading was witnessed in 3rd tier scrips and IT stocks, where local investors traded, while big ones stayed on the sidelines.”

Minibudget and oil prices would have an impact on the market, he said adding the market would take some time to reach 46,000 points, he said.

Analyst Ahsan Mehanti at Arif Habib Corp said stocks closed bearish on renewed concerns for the Covid pandemic in global equities and uncertainty over approval of supplementary finance bill in the National Assembly to clear IMF (International Monetary Fund) review.

Surging trade as well as current account deficit and uncertainty over the outcome of IMF board review next week to release EFF tranche contributed to the close, Mehanti said.

Failing to buck the trend, the KSE-30 Shares Index also weakened by 69.08 points or 0.38 percent to close at 18,001.32 points.

Traded shares decreased by 187 million shares to 327.60 million from 514.38 million. The trading value dropped to Rs6.48 billion from Rs10.60 billion. Market capital eased to Rs7.832 trillion from Rs7.862 trillion. Out of 353 companies active in the session, 135 posted gains, 196 losses, while 22 remained unchanged.

Topline Securities in a note said it was a range-bound day at the PSX and the benchmark index moved in a band of 308 points.

Refineries, banks, and exploration and production sectors stocks contributed positively with CNERGY, MCB, and POL cumulatively adding 38 points, while TRG, LUCK, and PAKT lost 69 points to profit-taking, collectively, the brokerage said.

The highest increase was recorded in shares of Unilever Foods, which rose by Rs175 to Rs20,324 per share, followed by Sapphire Textile that gained Rs64.51 to rise to Rs924.71 per share.

Nestle Pakistan suffered worst losses by giving up Rs110.06 to close at Rs5,400 per share, followed by Pakistan Tobacco that went down by Rs47.12 to end at Rs1,106.33 per share.

Neelam Naz at JS Research said the bourse remained under pressure throughout the day due to a lack of positive triggers.

“Going forward, we recommend investors to avail any downside as an opportunity for buying in the technology, fertiliser, and cyclical sector stocks,” she said.

Cnergyico PK was the volume leader with 74.07 million shares, followed by WorldCall Telecom that posted a trade of 47.81 million shares.

Stocks that recorded significant turnover included Hascol Petrol, Unity Foods Ltd, TRG Pak Ltd, Media Times Ltd, Dost Steels Ltd, Ist. Dawood Bank, Silk Bank Ltd, and Netsol Technolgy.

Turnover in the future contracts decreased to 66.16 million shares from 96.68 million shares.

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