Stocks on Tuesday sat on the fence as investors mostly remained busy steeling themselves for a widely expected volley of taxes in the federal budget for the new fiscal year (2019-20), which they fear will blow big holes in the profits of corporate sector at large, dealers said.
Madiha Javed, head of research at Ismail Iqbal Securities said, “The benchmark index remained range-bound throughout the session today. News regarding former President’s arrest by NAB (National Accountability Bureau) yesterday created political uncertainty in country”. Moreover, Javed said, budget FY20, which was to be presented later today in the National Assembly kept investors at bay.
“Exploration and production stocks like Mari Petroleum (-1.98 percent), Oil and Gas Development Company (+2.47 percent), Pakistan Oilfields Limited (-1.29%) and Pakistan Petroleum Limited (+1.12%) showed mix performance with a drop in international crude oil prices.”
Javed added that fertilisers, exploration and production and oil marketing companies being the main gainers, contributed 179.48 points to the index cumulatively.
Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.27 percent or 92.30 points to close flat at 34,659.85 points, whereas KSE-30 put on 0.23 percent or 37.70 points to end at 16,313.93 points. Of 314 active scrips, 177 moved up, 117 retreated, and 20 remained unchanged. The ready market volumes stood at 116.931 billion shares against a turnover of 91.736 million shares recorded in the last session.
Ahsan Mehanti from Arif Habib Corporation said the stocks showed recovery amid higher trades in the pre-budget rally after reports of Rs7.022 trillion worth of outlay for federal budget FY20.
“Upbeat data on current account deficit for July-April FY19, foreign inflows, bull-run in global equities, and hopes for allocation of Rs20 billion disaster support fund next week helped the market stay afloat,” Mehanti added.
A leading analyst said much would depend on the federal budget announcement; knee-jerk reactions might be negative ones as it would introduce a series of new levies on different sectors. However, calm on political fronts and understanding of economic reforms would help stage some recovery next week, he added.
The share market opened on a negative note and hit a low of 34267 points; however, before the close of the market some of the investors placed fresh deals, converting some index losses into gains.
Arrests of Asif Ali Zardari, former president, and, Hamza Shahbaz, the son of former chief minister Punjab, deterred fresh investment.
Rumors that corporate tax is likely to remain unchanged, super tax may stay, and federal excise duty and sales tax on local products can increase, also dismayed investors.
The highest gainers were Indus Motor Company up Rs34.22 to close at Rs1156.40/share, and Sanofi-Aventis, up Rs30.00 to finish at Rs670.00/share.
Companies that booked highest losses were Wyeth Pakistan Limited, down Rs39.85 to close at Rs757.15/share, and Mari Petroleum, down Rs21.77 to close at Rs1080.25/share.
K-Electric Limited recorded the highest volumes with a turnover of 9.041 million shares. The scrip gained Re0.07 to close at Rs4.34/share.
The lowest volumes were witnessed in Sui Northern Gas, recording a turnover of 3.130 million shares, whereas its scrip strengthened by Re0.66 to end at Rs70.19/share.
(This news/article originally appeared in The News on June 12th, 2019)