Stocks slid lower on Tuesday, as investors booked profits in commercial banks, exploration and production companies, and engineering sector amid concerns that the International Monetary Fund (IMF) would insist on tougher conditions to reach a deal for a rescue package, dealers said.
Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closed bearish amid pressure in selected scrips across the board on investors’ concerns over economic uncertainty and tough conditions of IMF bailout package.”
Imminent rise in gas tariff by the next fiscal year, risks over MSCIs downgrade to frontier market status and pre-budget uncertainty played a catalytic role in the bearish close, he added.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.33 percent or 122.13 points to close at 37,381.95 points level. KSE-30 shares index followed suit with a low of 0.33 percent or 58.27 points to end at 17,694.85 points level.
Of 347 active scrips, 137 moved up, 188 retreated, and 22 remained unchanged. The ready market volumes stood at 139.977 billion shares, as compared with the turnover of 172.006 billion shares in the previous session.
Madiha Javed, head of research at Ismail Iqbal Securities, said, “The market opened in the green continuing (Monday’s) momentum on news related to IMF bailout package, but closed on a negative note with investors preferring to book profits.”
As per news, the finance minister has stated that Pakistan and IMF have agreed on major policy issues to get an IMF loan in the range of $6 billion to $8 billion for three years. Commercial banks, E&Ps and engineering sectors were the major contributors to the index’s loss today, she added.
Salman Ahmad, head of institutional sales at Aba Ali Habib, said the turnover has improved, while the market showed small downward slide owing to almost 1,000 points or 2.5 percent gains in the last three trading sessions.
“Now the market has registered a clear cut message that the government has finally agreed to fetch loans from the IMF; however, the volume would be decided when final agreement was signed with the international donor agency,” he said.
The market would likely remain mixed in the coming sessions, looking at the government unfold the conditions attached to the loan.
Another analyst said the government should force the IMF to agree without harsher conditions, as the central bank has already increased the benchmark interest rate and devalued the currency against the dollar. The agreement would help attract foreign investment.
Auto sector showed brisk activity following the decision by several companies to launch new variants soon, which would improve the sale of the companies especially models below 800cc category.
The highest gainers were Rafhan Maize, up Rs328.00 to close at Rs7,000.00/share, and Bata Pakistan, up Rs43.31 to finish at Rs1,639.68/share.
Companies that booked highest losses were Phillip Morris Pakistan, down Rs183.66 to close at Rs3,489.67/share, and Nestle Pakistan, down Rs161.00 to close at Rs7,899.00/share.
Pakistan Elektron recorded the highest volumes with a turnover of 13.128 billion shares. The scrip gained Rs0.11 to close at Rs23.09/share.
The lowest volumes were witnessed in Unity Foods recording a turnover of 16.335 billion shares, whereas the scrip lost Rs0.75 to end at Rs1.54/share.
(This news/article originally appeared in The News on 17th, 2019)