Stocks flat as rupee fall spurs late exits

Stocks ticked down on Wednesday as rupee was battered further in volatile trade unabated, which spooked investors into booking profits at the eleventh hour, traders said.

The benchmark KSE-100 Shares Index fell 67.81 points or 0.16 percent to 42,458.14 points at Pakistan Stock Exchange (PSX).

Arif Habib Ltd in a post-session market report said stocks got off to a green start after rupee, during the day, snapped its losing streak versus dollar, gaining Rs3.80 in the interbank market a day after the government secured a deal with the International Monetary Fund (IMF).

“However, this gain was short-lived as the rupee lost against the dollar to finish at 211.93,” the brokerage said.

“Investors opted for profit-taking in the last trading hour, which led the index to close in the red zone. Volumes remained healthy in the main board stocks.”

Sectors contributing to the slide included cement (-39.7 points), technology (-28.2 points), E&P’s (-21.4 points), OMC’s (-18.7 points) and pharma (-11.6 points).

KSE-30 Shares Index, however, was also flat, gaining just 2.87 points or 0.02 percent to close at16,258.67 points.

Traded shares decreased by 34 million shares to 266.090 million from 300.592 million shares. The trading value dropped to Rs8.468 billion from Rs9.471 billion. Turnover in the futures contracts decreased to 188.945 million shares from 237.394 million shares.

Market capital narrowed to Rs7.050 trillion from Rs7.059 trillion. Out of 336 companies, 133 closed in the green, 176 in the red, while 27 ended unchanged.

Topline Securities said the day kicked off on a positive note making an intraday high of 354 points cheering the revival of extended fund facility and falling international oil prices.

“However, this positivity didn’t sustain as investors were worried over inflationary pressure and Rs436 billion additional taxes in federal budget 2022-2023.”

The brokerage said FFC, MCB, and BAHL cumulatively added 106 points to the index, whereas COLG, POL, and MEBL dented the index by 55 points.

According to a Topline report, with sharp surge in local petrol prices, currency devaluation, and expected adjustments in power and gas tariffs, there are signs of significant uptrend in inflation going ahead.

“Sensitive Price Index (SPI), which is an indicator used to measure weekly price movements of essential consumer items, was up 3.38 percent WoW (28 percent YoY) during the week ending June 16, 2022 versus last 10-year average weekly increase of 0.2 percent. This is the highest increase in over a decade,” the brokerage said.

The highest increase was recorded in share prices of Pakistan Tobacco, which rose by Rs56.98 to Rs955.98/share, followed by Nestle Pakistan, which increased by Rs20.08 to Rs5,900.08/share.

Colgate Palmolive suffered worst losses as it fell by Rs106.67 to Rs2,118.33/share, followed by Sapphire Fiber, which lost Rs88.90 to settle down at Rs1,110.10/share.

Arif Habib Corp’s Ahsan Mehanti said stocks closed lower on concerns over fresh government commitments to IMF to raise over Rs422 billion in tax targets for FY23 and poverty taxes on firms, which would likely dent corporate profits.

A slump in global crude oil prices, falling rupee and weak global equities sealed the negative close, Mehanti said.

Pakistan Refinery led the volume chart with 23.874 million shares. It closed higher by 13 paisas to Rs18.98 per share. It was followed by TPL Properties with 23.154 million shares. The stocks gained 74 to close at Rs21.97 per share.

Other stocks that recorded significant turnover included Cnergyico PK, Ghani Global Holdings, Unity Foods Ltd, Telecard Limited, Oilboy Energy (R), Lotte Chemical, TPL Corp Ltd, and Hum Network.