Stocks close nearly flat over political anxiety

KSE-100 index loses 48.26 points, settles at 79,944.10

KARACHI:

Pakistan Stock Exchange (PSX) came under heavy selling pressure on Friday amid political uncertainty following court’s ruling which declared that Pakistan Tehreek-e-Insaf (PTI) was entitled for reserved seats in the assembly.

In the morning, trading started on a lacklustre note but later the market started falling gradually. After midday, the KSE-100 index took a deep dive and touched its intra-day low of 78,611.68 points.

However, more than an hour before close, optimism returned as the market made a handsome recovery during which investors looked for lucrative bargains. Consequently, the index closed with marginal losses of nearly 50 points.

A key development during the day was a report of Pakistan Bureau of Statistics (PBS), which said that the short-term inflation rose 0.11% week-on-week.

“Stocks closed under pressure after the opposition won a major Supreme Court ruling on reserved seats, which would limit the government’s powers for constitutional amendments,” said Ahsan Mehanti, MD of Arif Habib Corporation.

“Uncertainty about the resolution of circular debt crisis, which was impacting a crucial investment of $5 billion, terms for the rollover of $15 billion worth of Chinese energy debt and Nepra’s approval of a massive power tariff hike acted as catalysts in bearish close of the PSX.”

At the end of trading, the benchmark KSE-100 index recorded thin losses of 48.26 points, or 0.06%, and settled at 79,944.10.

Topline Securities, in its report, said that a volatile session was observed at the bourse, where the index at one point dropped 1,380 points, or 1.73%, after the Supreme Court’s verdict on reserved seats in favour of the PTI.

However, recovery was noted during latter hours of the day as investors noted that the PML-N’s ruling coalition still held 62% representation in the National Assembly. As a result, the bourse settled at 79,944, down just 0.06%, Topline added.

Arif Habib Limited (AHL), in its report, commented “though the session was volatile on Friday, the market still stuck to the 80k level. However, the KSE-100 index fell 0.42% week-on-week.”

Some 40 shares rose while 59 fell with major upside contribution coming from Habib Bank (+4.77%), Fauji Fertiliser Bin Qasim (+6.8%) and Engro Fertilisers (+1.01%).

The biggest drags were Hub Power (-1.97%), Oil and Gas Development Company (-1.38%) and United Bank (-0.76%), it said.

The Supreme Court announced a decision allotting reserved seats to the PTI. It ruled that the Election Commission decision to allocate reserved seats to other parties was unconstitutional and as a result the government’s majority in the National Assembly fell to 62% from 68%.

The court’s decision saw the market dive 1.8% before recovering and closing the day flat, AHL added.

JS Global analyst Mubashir Anis Naviwala wrote in his report that the day started positively with the index reaching the intra-day high of 80,321 points.

However, profit-taking ahead of court’s decision on reserved seats erased early gains and the first half closed with losses of 405 points. The second session began with panic selling following the verdict, dragging the index down to 78,611 (-1,380 points).

Subsequently, investors resorted to buying at attractive levels, helping the market recover, the analyst added.

Overall trading volumes increased to 437.3 million shares compared with Thursday’s tally of 389.02 million. The value of shares traded during the day was Rs23.5 billion.

Shares of 444 companies were traded. Of these, 155 stocks closed higher, 245 fell and 44 remained unchanged.

Fauji Fertiliser Bin Qasim was the volume leader with trading in 45.4 million shares, gaining Rs2.6 to close at Rs40.85. It was followed by K-Electric with 33.1 million shares, losing Rs0.04 to close at Rs4.81 and WorldCall Telecom with 29.2 million shares, losing Rs0.02 to close at Rs1.20.

Foreign investors were net buyers of shares worth Rs172.5 million, according to the NCCPL.