PSX experiences volatility on profit-booking

KARACHI:

The stock market remained under pressure on Thursday as investors resorted to profit-booking primarily due to the narrowing of banking spread and uncertainty about the rollover of $15 billion worth of Chinese energy sector debt.

Led by the banking and oil sectors, the market witnessed a downward trend and lost around 150 points.

It came despite the reduction of 100 basis points in policy rate by the State Bank of Pakistan (SBP) earlier in the week, which reduced the cost of borrowing for businesses.

In a major development, Federal Finance Minister Muhammad Aurangzeb reiterated at an event that the government would press ahead with structural reforms in the key areas of taxation, energy, state-owned enterprises and privatisation.

Earlier, trading commenced on a positive tone, taking the KSE-100 index to the intra-day high of 78,241.02 points. However, the index fluctuated throughout the day with exploration and production (E&P) and banking sectors bearing the brunt of losses.

The bourse fell to the intra-day low of 77,595.93 points after midday. However, it recovered somewhat by the end of trading.

“Stocks closed under pressure as institutional investors took profits in blue-chip stocks of banks and oil companies,” stated Ahsan Mehanti, MD of Arif Habib Corp.

“Shrinking banking spreads amid the easing of SBP policy rate, surging power-sector circular debt and uncertainty about the rollover of $15 billion of Chinese IPPs’ dues played the role of catalysts in bearish close at the PSX.”

At the end of trading, the benchmark KSE-100 index recorded a modest loss of 146.68 points, or 0.19%, and settled at 77,740.31.

Topline Securities, in its commentary, observed that the KSE-100 index concluded trading at 77,740, marking a decrease of 147 points.

The market’s downtrend was driven by declines in E&P and banking sectors, with significant contribution coming from United Bank Limited, Bank Alfalah, Mari Petroleum, Pakistan Petroleum and Bank AL Habib, which together erased 229 points from the index, Topline said.

Arif Habib Limited (AHL), in its report, wrote that the KSE-100 was “pushed further into the 77.5-78k weekly support zone, leaving both bulls and bears uncertain.”

On the index, 34 stocks advanced while 57 declined with Fauji Fertiliser (+3.76%), Lucky Cement (+1.12%) and Habib Bank (+1.05%) being the top gainers. On the other hand, United Bank (-2.44%), Bank Alfalah (-3.69%) and Mari Petroleum (-1.24%) were the major laggards, it said.

Bank Alfalah reported second-quarter earnings per share (EPS) of Rs7.59, a 53% year-on-year increase. It took 1HCY24 EPS to Rs13.90, up 18% YoY. The bank also declared a dividend per share of Rs2.

“Friday’s close above
78k will be positive for potential gains next week,” AHL predicted.

JS Global analyst Mohammed Waqar Iqbal wrote that a dull activity was observed as investors seemed uninterested in taking positions in the absence of triggers.

“Moving forward, we expect range-bound activity to continue, however, a corporate results-based activity can be seen. Investors are advised to adopt a cautious approach,” the analyst added.

Overall trading volumes decreased to 278.99 million shares compared with Wednesday’s tally of 382.6 million. The value of shares traded during the day was Rs13.1 billion.

Shares of 433 companies were traded. Of these, 172 stocks closed higher, 198 fell and 63 remained unchanged.

Hascol Petroleum was the volume leader with trading in 26.7 million shares, gaining Rs0.32 to close at Rs6.45. It was followed by WorldCall Telecom with 21.8 million shares, remaining unchanged at Rs1.25 and Waves Home Appliances with 13.5 million shares, losing Rs0.81 to close at Rs8.04.

Foreign investors were net buyers of shares worth Rs48.4 million, according to the NCCPL.