Budget Anxiety: Stocks tread water for second day

KARACHI: Stocks again trod water on Wednesday as peaking budget anxiety tied investor hands amid no trade triggers, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index eased by 15.25 points or 0.04 percent to 41,553.16 points after swinging between a high of 41,620.71 and a low of 41,391.90 points.

Arif Habib Corp’s senior analyst Ahsan Mehanti said stocks barely changed amid thin trade on pre-budget uncertainty and World Bank’s projection of 4 percent GDP growth rate for FY2023.

Reports on a fall in cement dispatches by 15.85 percent year-on-year in May 2022 and record Rs7.255 trillion tax target set for federal budget FY2023 to resume IMF bailout programme depressed the market, he said.

“However, mid-session support was witnessed on rupee recovery,” Mehanti said.

KSE-30 Shares Index, however, increased by 27.46 points or 0.17 percent to 15,876.86 points.

Ready market volume shrank 6 million shares to 151.126 million shares from 157.436 million shares, while traded value rose to Rs4.487 billion from Rs4.224 billion. Turnover in the future contracts slumped to 40.281 million shares from 63.874 million shares.

Market capital decreased to Rs6.947 trillion from Rs6.956 trillion. As many as 137 names moved higher, 158 lower, while 26 remained unchanged.

Topline Securities in a post-trade note said stocks moved in a tight range, between a high of 52 and a low of 177 points. “Investors are confused over the economic situation and are waiting for the upcoming budget and update on the IMF programme,” the brokerage said.

LUCK, HUBC, and POL supported the index, whereas HBL, FFC and BAFL dented it.

As the best gainer of the day, Rafhan Maize secured Rs155 to reach Rs9,955/share. In terms of gains, the food processing company was followed by Nestle Pakistan that grew by Rs149.98 to Rs5,800/share.

Sapphire Fiber slipped Rs49 to Rs1,100 per share to become the worst loser of the day, while the second most battered scrip was Indus Motor Co that shed Rs28.70 to end at Rs1,198.50/share.

Analysts at Arif Habib Ltd said the PSX was under pressure throughout the day due to concerns regarding adverse upcoming budget and mounting inflation.

“It was a volatile session and investors remained on sidelines sideways amid thin volume in the main board stocks,” the brokerage said.

It added that the banking sector stayed in the red zone due to expectation of higher super tax and an increase in other taxes in the upcoming budget.

Negative contributions came from banks (-62.9 points), fertiliser (-18.2 points), textile (-15.7 points), automobile assemblers (-14.2 points), and insurance (-8.9 points).

Unity Foods Ltd led the volume with 11.825 million shares, followed by DGK Cement that recorded a trade of 9.623 million shares.

Oilboy Energy (R), TPL Properties, Pakistan Refinery, Sui North Gas, Cnergyico PK, Flying Cement, Maple Leaf Cement, and Ghani Global Holdings also added to the trade volume.

“Going forward, we expect the range-bound activity to continue and recommend investors to adopt a buy-on-dips strategy, focusing on dividend-yielding stocks,” JS Research said in its market wrap.