Stocks score subdued gains amid monetary tightening speculations

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Stocks edged up on Tuesday, scoring lean gains, as investors opted to play safe on speculations of a major monetary tightening by State Bank of Pakistan (SBP) this week, amid ongoing economic uncertainties, dealers said.

Adil Ghaffar, Chief Executive Officer at First Equity Modaraba, said in the absence of concrete measures the market was slowly and gradually sliding towards 40,000 index level.

“Though, the market closed in positive territory, but throughout the session it remained in the negative zone and changed in the last half hour,” Ghaffar said, adding this might be due to short covering and futures rollover.


The prevailing uncertainties in the country, if not addressed, will eventually grab the financial markets, he added.

“If the present crisis between Ukraine and Russia is settled down then Pakistan will benefit from the decreasing oil prices and the historical chart suggests that it will be in the range of $60-$65/barrel for next year, subject to force majeure,” Ghaffar said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.30 percent or 122.67 points to close at 40,894.22 points level. KSE-30 shares index grew 0.56 percent or 107.99 points to end at 19,517.34 points level.

In today’s session, the total number of active scrips was 376, of those 148 moved up, 198 retreated, and 30 remained unchanged. The ready market volumes stood at 132.327 billion shares, compared with the turnover of 135.319 billion shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks showed late session recovery as investors weighed upbeat economic outlook.

Also Read: Stocks lose 98 points in choppy session

Mehanti said concerns for likely hike in power tariff and rupee depreciation invited mid-session pressure, while surge in forex reserves, recovery in global crude prices, upbeat data on fertiliser off-take, improving remittances, and higher local cement and fertiliser prices landed the market in green zone.

Recovery in crude oil prices and the government’s decision to provide gas to industries in the winter season helped capital market record some improvement before the closure where volume was still thin as investors stayed on the sidelines.

Banking sector showed some strength as general market consensus was that the benchmark interest rate is expected to rise by 100 basis points to 9.5 percent.

The monetary policy is due to be announced later this week.

Sugar companies were mostly in the red column because the new crushing season has not yet started. The industry claimed the policy regarding pricing is still unclear.

The highest gainers were Khyber Textile, up Rs25.00 to close at Rs525.00/share, and Glaxo Healthcare, up Rs14.94 to finish at Rs339.99/share.

Companies that booked highest losses were Colgate Palmolive, down Rs94.00 to close at Rs2430.00/share, and Island Textile, down Rs83.96 to close at Rs1595.29/share.

Lotte Chemical recorded the highest volumes with a turnover of 21.471 million shares. The scrip gained Rs0.89 to close at Rs19.64/share.

The lowest volumes were witnessed in Pakistan Elektron, recording a turnover of 11.702 million shares, and losing Rs0.26 to end at Rs 30.61/share.

(This news/article originally appeared in The News on November 28th, 2018)

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