Stocks snap bullish streak over Moody’s

Benchmark KSE100 index sheds 75.32 points to settle at 42,085.25

KARACHI:

A four-day winning streak ended at the Pakistan Stock Exchange on Friday as a Moody’s report sparked concerns among investors, who remained cautions while trading stocks. The rating agency downgraded Pakistan’s credit rating to Caa1 from B3. The stock market expected further deterioration in the economic outlook of the country.

Despite pessimism, the benchmark KSE100 index registered a steady buying activity during the first half, which helped push the market upwards. However, in the second half, the bourse succumbed to the selling pressure as profit-taking emerged that dragged the index into the red zone. At close, the benchmark KSE-100 index recorded a decrease of 75.32 points, or 0.18%, to settle at 42,085.25. Topline Securities, in its report, said Pakistan equities witnessed a mixed day.

Initially, the market opened on a negative note in the backdrop of Moody’s credit rating action where it downgraded Pakistan’s rating to Caa1 from B3. During the day, the KSE100 index touched an intra-day low at 41,992 (-169 points, or 0.40%) and an intra-day high at 42,389 (+229 points, or 0.54%). It eventually settled at 42,085 (-75 points, or 0.18%) for the day. Fertiliser, power, food, tech and banking-sector stocks contributed positively to the index where Engro Corporation, Kot Addu Power Company, Frieslandcampina Engro Pakistan, Systems Limited and Habib Bank added 66 points cumulatively, it said.

On the flip side, TRG Pakistan, Dawood Hercules Corporation and Fauji Fertiliser Company witnessed some profit-taking as they lost 69 points collectively. Over 313 million shares were traded at the bourse while total value came in at Rs9.4 billion. WorldCall Telecom led the volumes chart with trading in 3.5 million shares, Topline added. Arif Habib Limited, in its report, said a mixed session was witnessed at the PSX. Investors chose to stay away from the stock market during the opening session, causing the index to drop by 168.46 points after Moody’s Investor Service lowered Pakistan’s sovereign credit rating by one notch.

However, after resuming the second session in the green zone, the investors opted for profit-booking, which led the index to close in the red zone, it said. Main board volumes remained respectable as a result of the rupee’s strengthening versus the US dollar over the past many days. Third-tier companies led the volumes board. The index closed at 42,085.25, down 75.32 points (-0.18%). Sectors contributing to the performance included E&P (-40.1 points), technology (-32.4 points), investment banks (-18.6 points), cement (-8.8 points) and automobile assemblers (-8.3 points). Volumes decreased from 442.6 million shares to 313.3 million shares (-29.2%).

Traded value decreased by 30.7% to $42.8 million against $61.8 million a day ago, the Arif Habib report added. JS Research analyst Waqar Iqbal said profit-taking was witnessed that took the benchmark KSE-100 index to 42,085 points at close, with a loss of 75 points day-on-day. Traded volume stood at 313 million shares where WorldCall Telecom (0.6%), Telecard Limited (3.5%), The Organic Meat Company (3.6%), Lotte Chemical Pakistan (1.3%) and Kot Addu Power Company (3%) were the highest contributors. “Going forward, we recommend investors to avail any downside as an opportunity to buy in the construction and export-oriented sectors,” the analyst said.

Overall trading volumes decreased to 313.3 million shares compared with Thursday’s tally of 442.6 million. The value of shares traded during the day was Rs9.4 billion. Shares of 344 companies were traded. At the end of the day, 134 stocks closed higher, 187 declined and 23 remained unchanged. WorldCall Telecom was the volume leader with 83.5 million shares, gaining Rs0.01 to close at Rs1.60.

It was followed by Telecard Limited with 44.2 million shares, gaining Rs0.4 to close at Rs11.73 and The Organic Meat Company with 9.9 million shares, gaining Rs0.85 to close at Rs24.65. Foreign investors were net buyers of Rs44.6 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.