Political woes mount pressure on PSX

KSE-100 index loses 177.93 points, settles at 81,114.20

KARACHI:

Pakistan Stock Exchange (PSX) remained under pressure at the beginning of the week, shedding 178 points, primarily owing to mounting political uncertainty and continued foreign fund outflows.

Although the KSE-100 index reached its intra-day high of 81,321.63 points just about an hour after the commencement of trading, the early optimism faded soon.

Key factors weighing on market sentiment included the government's action to reduce the tariff paid to the independent power producers (IPPs), concerns over a potential tax collection shortfall and delay in the privatisation of state-owned enterprises (SOEs).

As a result, the market fell below the 81,000 mark and touched its intra-day low of 80,352.22 points immediately after midday. Though the index recovered significantly but it still ended the day with modest losses.

Hub Power was the biggest drag on the index as it erased 139 points, driven by concerns over possible revision to its plant contracts and payout ability.

"Stocks closed under pressure on political uncertainty and foreign outflows," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

"Government action on IPPs' tariff, concerns over repercussions of tax collection shortfall and delay in privatisation of SOEs played the role of catalysts in bearish close at the PSX." At the end of trading, the KSE-100 index recorded a decline of 177.93 points, or 0.22%, and settled at 81,114.20.

Topline Securities, in its commentary, said that the KSE-100 index closed the trading session at 81,114, marking a decrease of 178 points. The main contributor to the market's fall was Hub Power (-139 points), which dipped 3.6%, due to concerns about potential revisions to its power plant contracts and payout ability.

Other stocks that contributed to the downward movement were Meezan Bank, TRG Pakistan, Bank AL Habib and Engro Corporation. They collectively wiped off 194 points from the index, it said.

Mari Petroleum initially saw a drop in its share price following the distribution of bonus shares to investors, however, it managed to recover and close the day in positive territory with gains of 4.1% and contribution of 130 points to the index, Topline added. Arif Habib Limited (AHL) wrote in its report "the KSE-100 dipped into the weekly support zone of 80,000-81,000 and then recovered. We are now on alert for a bottom to form and the upside to resume."

Some 44 shares rose whole 51 fell with the biggest upside contribution coming from Mari Petroleum (+4.09%), Fauji Fertiliser (+2.58%) and United Bank (+0.96%). Hub Power (-3.58%), Meezan Bank (-1.49%) and TRG Pakistan (-7.53%) were the largest index drags, AHL commented. JS Global analyst Mubashir Anis Naviwala said that the bearish spell continued as the market lost more than 940 points in intra-day trading.

"Going forward, we advise investors to exercise caution and look for opportunities during market dips," the analyst added. Overall trading volumes decreased to 297.99 million shares compared with Friday's tally of 339.3 million. The value of shares traded during the day was Rs14.1 billion.

Shares of 444 companies were traded. Of these, 132 stocks closed higher, 244 declined and 68 remained unchanged.

PIA Holding Company was the volume leader with trading in 43.1 million shares, losing Rs0.08 to close at Rs18.74. It was followed by WorldCall Telecom with 21.7 million shares, remaining unchanged at Rs1.20 and Hub Power with 20.5 million shares, losing Rs4.43 to close at Rs119.34. During the day, foreign investors sold shares worth Rs1.37 billion, according to the NCCPL.