Stocks slip over weak political, economic outlook

Our Correspondent
Saturday, Mar 18, 2023

Stocks ended the week on a declining note on Friday, as both political and economic uncertainty affected investor sentiment, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 364.14 points or 0.87 percent to 41,329.95 points against 41,694.09 points recorded in the last session. The highest index of the day remained at 41,808.88 points while the lowest level of the day was recorded at 41,270.82 points.

Brokerage Arif Habib Ltd said to cap off the business week, the PSX recorded a negative session.

“The market opened in the negative zone but continued to trade both ways during the opening session, as anticipated SLA (staff level agreement) between the government and the IMF is prolonged,” it reported. “The second session commenced, and investors chose to book profits as the index fell to an intraday low of 423.28 points due to the current political uncertainty and the impending uncertain weekend on both the political and economic fronts.”

Investors’ participation remained sluggish although dull volumes were witnessed across the board.

KSE-30 index also decreased by 166.23 points or 1.07 percent to 15,352.01 points compared with 15,518.24 points recorded in the last session.

Traded shares decreased by 62 million shares to 172.605 million shares from 234.696 million shares. The trading value rose to Rs8.019 billion from Rs7.462 billion. Market capital narrowed to Rs6.319 trillion from Rs6.354 trillion. Out of 313 companies active in the session, 121 closed in green, 171 in red and 21 remained unchanged.

Nabeel Haroon, analyst at Topline Securities, said KSE 100 Index largely traded in a negative zone during the trading session to close at the 41,330 level (down by -0.87 percent).

Major positive contributions to the index came from DAWH, LOTCHEM, UNITY, HMB and SNGP, as they contributed 32 points to the index. On the flip side SYS, PSEL, FFC, HBL and HUBC lost value to weigh down on the index by -232 points.

The highest increase was recorded in shares of Ismail Ind, which rose by Rs30.21 to Rs433.11 per share, followed by J.D.W. Sugar, which increased by Rs26.70 to Rs382.79 per share. A significant decline was noted in shares of Rafhan Maize, which fell by Rs200 to Rs7,800 per share, followed by Pak Services, which decreased by Rs91.47 to Rs1,500 per share.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks closed lower after FM reports of IMF deal delay and hurdles over carryover of nukes, missiles program.”

He added that uncertainty over outcome of IMF conditions on seeking assurance over funding gaps in the balance of payments from friendly countries over support commitments played a catalyst role in the bearish close.

Sectors contributing to the performance included technology and communication (-103.7 points), fertiliser (-71.2 points), commercial banks (-50.1 points), miscellaneous (-47.9 points), and E&P’s (-36.9 points).

Habib Bank remained the volume leader with 9.176 million shares which decreased by Rs1.66 to Rs75.61 per share. It was followed by Hascol Petrol with 9.153 million shares, which rose by one paisa to Rs6.32 per share.

Other significant turnover stocks included Pak Int. Bulk, WorldCall Telecom, Fauji Foods Ltd, Unity Foods Ltd, Fauji Fert., Bankislami Pak., D.G.K. Cement and Sui North Gas.

Shares’ turnover in the future contracts decreased to 39.743 million shares from 59.302 million shares.