PSX ends bearish over tax law worries

KARACHI

Pakistan Stock Exchange (PSX) on Wednesday engaged in highly bearish trading, reflecting investor concerns over the Tax Laws Amendment Bill, which was seeking to bar non-filers from making stock purchases beyond certain limits.

Analysts attributed the market's downturn of nearly 1,600 points to apprehensions surrounding the legislative change, alongside broader economic challenges such as rupee instability, weaker global crude oil prices and political uncertainty.

The index touched the intra-day high of 213 points after midday and fluctuated around that level for some time before plummeting to the day's low of 1,682 points. The bearish activity was exacerbated by institutional profit-taking. There were some positive reports as well. In its financial results, Honda Atlas Cars exceeded market expectations, posting a 297% year-on-year (YoY) increase in earnings per share (EPS) for the third quarter.

Ahsan Mehanti of Arif Habib Corp commented that stocks closed bearish amid worries over the Tax Laws Amendment Bill 2024, which prohibited non-filers from making stock purchases beyond certain limits. He added that rupee instability, uncertainty about negotiations between the government and Pakistan Tehreek-e-Insaf and weak global crude oil prices played the role of catalysts in bearish activity. At the end of trading, the benchmark KSE-100 index recorded a slump of 1,598.82 points, or 1.39%, and settled at 113,443.43.

Topline Securities, in its review, commented that bears dominated trading as the KSE-100 index recorded a sharp decline. After reaching the intra-day high of 213 points, the index plunged to the day's low of 1,682 points.

The downtrend was primarily attributed to consistent selling pressure from local banks, as reflected in the National Clearing Company data. The prolonged selling dampened market sentiment, leading to a bearish tone. Investors maintained a cautious stance, which further intensified the negative activity, it added.

On a brighter note, Topline mentioned, Honda Atlas Cars announced its 3QMY25 financial results, where it reported EPS of Rs3.97, surpassing industry expectations.

Arif Habib Limited (AHL), in its report, noted that the KSE-100's close below 115,000 shifted the market back into the neutral zone and firmly within the 112,000-115,500 range. Some 14 shares rose while 81 fell with Fauji Cement (+7.17%), Systems Limited (+0.98%) and Kohat Cement (+2.52%) contributing the most to index gains. On the other hand, Mari Petroleum (-9.79%), Oil and Gas Development Company (-1.94%) and Pakistan Petroleum (-2.01%) were the biggest drags, AHL said.

JS Global analyst Muhammad Hasan Ather commented that the PSX's decline was primarily driven by apprehensions surrounding the Tax Laws Amendment Bill 2024, which restricted non-filers from making stock purchases, along with rupee instability and weaker global crude oil prices.

Insight Securities Head of Sales Ali Najib remarked that "PSX danced to the tune of bears." Institutional profit-taking led to the bleeding again, as Tuesday evening data confirmed the market's atmosphere where banks and funds took the lead in that regard. On Wednesday too, there was some noise regarding funds that may receive redemptions.

Overall trading volumes decreased to 743.6 million shares compared with Tuesday's tally of 767.3 million. Shares of 454 companies were traded. Of these, 93 stocks closed higher, 307 fell and 54 remained unchanged.

WorldCall Telecom was the volume leader with trading in 100.2 million shares, falling Rs0.08 to close at Rs1.70. It was followed by Cnergyico PK with 96.98 million shares, gaining Rs0.07 to close at Rs7.36 and Fauji Cement with 83.6 million shares, gaining Rs2.58 to close at Rs38.58.

Foreign investors bought shares worth Rs1.35 billion.