Stocks slip despite Saudi loan extension

Stocks fell on Monday as rupee’s relentless degradation versus dollar, which has been driving investors deeper into the sidelines, offset the optimism from a rollover of $3 billion deposits by Saudi Arabia, traders said.

The KSE-100 Shares Index, the touchstone of Pakistan Stock Exchange (PSX), eased by 158.90 points or 0.38 percent to 41,520.59 points. During the day trade the index hit a high of 41,896.62 and a low of 41,502.71 points.

Brokerage Arif Habib Ltd, in its post-session analysis, said, the PSX closed lower after having failed to cross 42,000 points level despite a bullish open. “The rupee continued to lose ground versus the even after SFD (Saudi Fund for Development) rolled over deposits of $3 billion for another year,” it reported.

Sectors contributing to the performance included banks (-63.5 points), cement (-31.0 points), chemical (-30.6 points), OGMCs (-19.2pts) and glass (-14.9 points). The KSE-30 index also edged lower by 45.39 points or 0.29 percent to 15,603.06 points compared with 15,648.45 points recorded in the last session.

Traded shares decreased by 71 million shares to 148.214 million shares from 219.351 million shares, while value dropped to Rs7.519 billion from Rs8.892 billion. Market capital narrowed to Rs6.832 trillion from Rs6.854 trillion. Out of 331 companies active in the session, 93 closed in the green, 215 in the red and 23 remained unchanged.

Topline Securities said the market opened on a positive note on Saudi fund rollover of deposits and the IMF assurance for supporting flood relief and reconstruction efforts. “However, this positivity failed to sustain and the market succumbed to profit-taking to make an intraday low of 174 points,” the brokerage said.

The highest increase was recorded in shares of Sapphire Fibre, which rose by Rs69.82 to Rs1,000.82 per share, followed by Pakistan Tobacco, which increased by Rs55.72 to Rs798.73 per share.

Bhanero Textile was the worst performing stock of the day as it fell by Rs90.18 to Rs1,112.32 per share, followed by Sapphire Textile, which decreased by Rs78.15 to Rs1,091.01 per share. Ahsan Mehanti, an analyst at Arif Habib Corp, said stocks closed lower on rupee uncertainty and global equity sell-off amid surging inflation.

“Political uncertainty and concerns over shrinking forex reserves along with delays on part of bilateral lenders in releasing committed financing hurt the sentiment,” he said. However, he said early gains were witnessed on the finance minister’s assurances that Pakistan was unlikely to default on its debt and SFD’s confirmation of a $3 billion deposit extension.

TRG Pak Ltd was the volume leader with 24.721 million shares. It increased by Rs2.15 to Rs118.34 per share. It was followed by TPL Properties with 11.399 million shares that closed higher by 54 paisas to Rs19.61 per share.

Other stocks that recorded significant turnover included Hascol Petrol, Hum Network, Engro Polymer, Tariq Glass Industries, K-Electric Ltd, WorldCall Telecom, Telecard Limited, and Cnergyico PK. Turnover in the future contracts decreased to 45.949 million shares from 62.830 million shares.