Stocks fall over one percent on IMF deal uncertainty

Stocks continued a weekly downtrend to Friday, as investors remained cautious about delays in IMF programme and prevailing political uncertainty in the country, traders said.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index closed lower by 434.05 points or 1.08 percent to 39,942.05 points against 40,376.10 points recorded in the last session. The highest index of the day remained at 40,456.22 points while the lowest level of the day was recorded at 39,923.10 points.

“The market started off in the red zone and continued to trade in the negative territory for the majority of the trading session, shedding 453.21 points during the day due to the prolonged SLA [staff level agreement] between the government and IMF to unlock the 9th tranche of the Extended Fund Facility,” brokerage Arif Habib Ltd said.

Investors’ participation had remained dull throughout the session drying up volumes in the main board while side board scrips remained the volume leaders, it reported. KSE-30 index also decreased by 177.23 points or 1.19 percent to 14,738.52 points compared with 14,915.75 points recorded in the last session.

Traded shares plunged by 102 million shares to 46.728 million shares from 148.452 million shares. The trading value dropped to Rs1.294 billion from Rs3.917 billion. Market capital narrowed to Rs6.107 trillion from Rs6.172 trillion. Out of 290 companies active in the session, 77 closed in green, 194 in red and 19 remained unchanged.

One analyst said that the market had decreased amid very low volumes, as trading time decreased amid Ramadan month. He added the major reason behind the cautious activity was a delay in the staff-level agreement with the IMF and political uncertainty in the country.

The highest increase was recorded in shares of Nestle Pakistan, which rose by Rs99.95 to Rs5,100.10 per share, followed by Sapphire Fiber, which increased by Rs71.60 to Rs1,026.39 per share.

A significant decline was noted in shares of Pak Services, which fell by Rs89 to Rs1,099 per share, followed by Pak Tobacco, which decreased by Rs52.50 to Rs665.10 per share.

Analyst Ahsan Mehanti at Arif Habib Corp said, “Stocks fell sharply lower after Govt treasury bond yields rose to 22 percent amid an expected rise in key policy rate next month.”

He stated that reports of delays over the completion of IMF conditions for ensuring fund receipts from supporting friendly countries and a slump in global crude oil prices played a catalyst role in the bearish close.

Sectors contributing to the performance included E&P’s (-61.7 points), technology & communication (-60.3 points), miscellaneous (-47.9 points), commercial banks (-47.3 points), and cement (-40.2 points).

WorldCall Telecom remained the volume leader with 4.011 million shares which decreased by one paisa to Rs1.20 per share. It was followed by Telecard Limited with 3.877 million shares, which decreased by 51 paisas to Rs7.06 per share.

Other significant turnover stocks included TPL Properties, Pak Elektron, Fauji Cement, Ghani Glo Hol, TRG Pak Ltd, Cnergyico PK, Fauji Foods Ltd and Hascol Petrol. Shares’ turnover in the future contracts decreased to 22.377 million shares from 37.411 million shares.