Stocks dive over delay in IMF programme
PHOTO: FILE
Bears became aggressive at Pakistan Stock Exchange (PSX) on Wednesday as they completely sidelined the bulls and the market lost significant ground, which analysts attributed to the delay in resumption of International Monetary Fund’s (IMF) loan programme.
Finance Minister Ishaq Dar reiterated that Pakistan “will not default” on international payments as the government had arranged the entire requirement of $31-32 billion for the ongoing fiscal year.
Despite the minister’s remarks, investors’ sentiment weakened as they refrained from taking fresh positions, dragging the KSE-100 index into the red zone.
Market participants remained under pressure over concerns about the country’s economic situation. Furthermore, persistent depreciation of the rupee against the US dollar dented the confidence of already jittery investors.
At close, the benchmark KSE-100 index recorded a decrease of 523.48 points, or 1.32%, to settle at 39,279.43.
Topline Securities, in its report, said that Pakistan equities had a bearish day. “The KSE-100 index opened in the green zone, touched an intra-day high at 39,867 (+64 points; or 0.16%) and intra-day low at 39,028 (-775 points; or 1.95%) before eventually settling at 39,279 (-523 points; or 1.32%),” it said.
Tech, fertiliser, E&P and banking-sector stocks contributed negatively to the index where Systems Limited, TRG Pakistan, Engro Corporation, Pakistan Oilfields and United Bank erased a total of 259 points.
On the flip side, Hub Power, Pakistan Petroleum and Pakistan State Oil saw some buying interest as they added 69 points, Topline added.
Arif Habib Limited, in its report, said that a bearish session gripped the PSX on Wednesday.
The market opened in the green zone but within initial trading hours, bears took charge and the market nosedived, it said. “The negative session continued throughout the day due to news of redemptions and rollover week squaring of positions that caused the index to drop by 775.40 points in intra-day trading.”
However, decent volumes were observed across the board while third-tier companies remained the volume leaders.
The index closed at 39,279.43, down by 523.48 points (-1.32% day-on-day).
Sectors contributing to the performance included technology and communications (-138.9 points), commercial banks (-114.4 points), fertiliser (-93.8 points), chemical (-36.2 points) and E&P (-33.3 points).
Volumes increased from 153.7 million shares to 258.5 million (+68.1%). Traded value increased by 53.5% to $37.6 million as against $24.5 million a day go, the AHL report added.
JS Research analyst Muhammad Shuja Qureshi said that the market continued to lose ground with the index closing at 39,279, losing 523 points day-on-day.
Initially, selling in Systems Limited (-4.3%), Meezan Bank (-2.2%), United Bank (-3%), Engro Fertilisers (-1.8%), and Engro Corporation (-1.9%) brought the entire market under pressure.
Once again buy-back activity in Bank Alfalah (-1.2%) generated a turnover of 57.9 million shares, he said.
“Market sentiment remains weak and investors are advised to trade cautiously,” added the analyst.
Overall trading volumes increased to 258.5 million shares compared with Tuesday’s tally of 153.7 million. The value of shares traded during the day was Rs8.5 billion.
Shares of 340 companies were traded. At the end of the day, 66 stocks closed higher, 257 declined and 17 remained unchanged.
Bank Alfalah was the volume leader with 57.9 million shares, losing Rs0.36 to close at Rs29.60. It was followed by WorldCall Telecom with 22.1 million shares, losing Rs0.05 to close at Rs1.13 and K-Electric with 17.8 million shares, losing Rs0.05 to close at Rs2.37.
Foreign investors were net sellers of Rs1.6 billion worth of shares during the trading session, according to the NCCPL.