Stocks gain as investors mostly bet against a blacklisting at FATF

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SOURCEThe News
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Stocks on Wednesday wound up with decent gains on value-hunting, soaking up strength from an increasingly growing optimism that Pakistan’s grey-listing will endure at the international terror financing watchdog’s meeting in Paris, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index put on 0.58 percent or 197.56 points to close at 34,281.09 points, whereas KSE-30 was up 0.20 percent or by 31.75 points to end at 16,039.48 points.

As many as 387 shares were active today. A breakdown shows that 241 ended higher, 121 lower, and 25 finished unmoved. The turnover lowered to 151.367 million traded shares, as against 156.402 million recorded in the last session.

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Also Read: Stocks edge lower; market awaits FATF decision

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said the market was mixed-too-bullish as several are anxiously awaiting the outcome of FATF (Financial Action Task Force), while a few executed fresh deals following of the financial results of choice and trading scrips.

Furthermore the FATF was set to announce findings related to Pakistan on Friday which would set the direction of the market, while there were some reservations on account of “Azadi March”, Ahmad added.

Ahsan Mehanti from Arif Habib Corporations said, “Stock showed recovery in the earnings season on investor speculation ahead of FATF decisions on outcome of Pakistan review on Octpber 18”.

Surging global crude oil prices, upbeat IMF (International Monetary Fund) outlook on steadfast fiscal adjustment, picking up stability, and speculations on expected expansion of CPEC (China-Pakistan Economic Corridor) projects boosted the sentiments at the PSX, Mehanti added.

A leading trader said most of the investors have been hopeful of a positive response from plenary meetings of FATF because government has been continuously taking steps to curb money laundering and counter terror financing.

In a latest move State Bank of Pakistan has developed a framework to restrict money laundering and terror financing through banking channels, another step to comply Pakistan for removal from grey list in future.

Furthermore, IMF remained optimistic on Pakistan’s economy which is first expected to slow down to 2.4 percent in 2020 and then pick up quickly after stabilisation measures bear result.

However, the IMF has projected that Pakistan’s unemployment ratio will go up to 6.2 percent in FY-2020 against 6.1 percent for FY2019.

According to the World Economic Outlook (WEO) Global Manufacturing Downturn, Rising Trade Barriers released on Tuesday on the eve of annual meeting of IMF/World Bank, the IMF report shows Pakistan’s real GDP stood at 5.5 percent in FY-2018 and it dropped to 3.3 percent in FY-2019.

Punjab to provide targeted subsidy on farm inputs

However, economic authorities do not see the GDP growth falling further and project it to be hovering around 3.5 percent with the help of improved agriculture sector growth.

The highest gainers were Nestle Pakistan, up Rs200 close at Rs5,565/share, and Colgate Palmolive, up Rs75 to finish at Rs2024.99/share.

Companies that booked highest losses were Bata Pakistan, down Rs77 to close at Rs1,523/share, and Unilever Foods, down Rs46.99 to close at Rs6700.00/share. Stocks 

WorldCall Telecom posted the highest volumes with 11.799 million shares, gaining Rs0.05 to end at Rs1.12/share. Dost Steels Limited turnover was the thinnest of the day with 2.804 million shares, while the scrip lost Rs0.04 to end at Rs5.49/share.

(This news/article originally appeared in The News on October 17th, 2019)

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