Economic, political headwinds pull bourse down


The Pakistan Stock Exchange (PSX) began the week on a bearish note with the benchmark KSE-100 index shedding over 250 points as the market reacted to repercussions of economic and political uncertainty.

Political tensions following a rally of the Pakistan Democratic Movement (PDM) in Swat after several months impacted the investment climate.

Soaring inflation and failing efforts of the government to control price hike added to the concerns of investors.

On the results front, Sui Northern Gas Pipelines (SNGPL) announced its results for the financial year ended June 30, 2020, which gave investors some room to take fresh positions.

At close, the benchmark KSE-100 index recorded a decrease of 257.06 points, or 0.54%, to settle at 47,429.12.

A report of Arif Habib Limited stated that post-closure of financial year 2020-21, the market began receding, resulting in a loss of 311 points during the session.

“Lack of obvious near-term trigger caused lacklustre activity in the market, where investors were concerned about the beginning of earnings season, due to start at the end of August,” the report said.

Selling pressure was evident across the board, with focus on cement, steel, technology, refinery and exploration and production sectors.

Oil and Gas Development Company was an exception and enjoyed active trading with a range-bound price uptick.

Moreover, SNGPL posted its results with a dividend payout, which attracted investors to build position and realised price gains.

Sectors contributing to the performance included cement (-76 points), technology (-23 points), exploration and production (-23 points), tobacco (-21 points), fertiliser (-16 points) and power (+25 points).

Individually, stocks that contributed positively to the index included Hubco (+27 points), Sui Northern Gas Pipelines (+12 points), Engro Fertilisers (+11 points), Standard Chartered Bank (+10 points) and Bank Alfalah (+9 points).

Stocks that contributed negatively were Lucky Cement (-39 points), Pakistan Tobacco Company (-21 points), Engro Corporation (-17 points), HBL (-17 points) and Pakistan Petroleum (-15 points).

JS Global analyst Muhammad Mubashir said that the KSE-100 index opened the session on a slightly positive note, but soon fell victim to profit-taking, which dragged the index into the negative region where it remained for the remainder of the day.

The market touched intra-day high and low of 47,739 (+53 points) and 47,375 (-311 points) respectively and closed the session at 47,429, down 257 points.

Major contribution to the total traded volume came from WorldCall Telecom (-2%), Hascol Petroleum (-11.9%), K-Electric (-1.5%), Byco Petroleum (-3.9%) and TPL Corp (-4.9%).

Contrary to the bearish performance, PIA(A) (+3.1%) closed positive on news that the airline was set to issue a 10-year Sukuk worth up to Rs20 billion this month, Mubashir added.

However, despite news of strong cement offtake, the cement sector remained under pressure where Lucky Cement (-1.6%), DG Khan Cement (-2.4%) and Pioneer Cement (-1.3%) were among the major losers.

“Going forward, we recommend investors to view any downside as an opportunity to buy in construction and export-oriented sectors,” the analyst said.

Overall trading volumes dropped to 494.5 million shares compared with Friday’s tally of 563.8 million. The value of shares traded during the day was Rs15.4 billion.

Shares of 411 companies were traded. At the end of the day, 133 stocks closed higher, 270 declined and 8 remained unchanged.

WorldCall Telecom was the volume leader with 55.6 million shares, losing Rs0.08 to close at Rs3.98. It was followed by Hascol Petroleum with 39.8 million shares, losing Rs0.98 to close at Rs7.28 and K-Electric with 29.5 million shares, losing Rs0.06 to close at Rs4.01.

Foreign institutional investors were net sellers of Rs1.02 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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