Stocks end slightly lower after MSCI review

KARACHI:

Pakistan Stock Exchange (PSX) on Wednesday experienced volatile trading as the benchmark KSE-100 index see-sawed throughout the day and closed slightly lower by 85 points following the latest MSCI market review.

The bourse faced headwinds in the face of a series of challenging factors. Foreign financing outflow weighed on investor sentiment while uncertainty surrounding the Tax Amendment Bill 2024, which seeks to restrict non-filers from investing in the stock market, fueled caution.

Additional concerns about foreign debt repayments, EU review of Pakistan's GSP Plus status and political noise contributed to the negative close of the market.

The index kicked off trading on a strong note, reaching the intra-day high of 113,436.72. However, as the day progressed, market interest shifted, resulting in a dip that took the KSE-100 to the intra-day low of 112,621.14.

Ahsan Mehanti of Arif Habib Corp commented that stocks closed under pressure amid foreign outflows and uncertainty about the proposed Tax Amendment Bill 2024 aimed at restraining non-filers from investing at the PSX. "Concerns over foreign debt repayments, EU review of the GSP+ status, outcome of USAID suspension and political noise contributed to the negative close of the market," he added.

At the end of trading, the benchmark KSE-100 index recorded a modest dip of 85.44 points, or 0.08%, and settled at 112,924.94. Topline Securities, in its review, wrote that investor sentiment remained mixed following the latest MSCI review, where Abbott Laboratories and Searle Pakistan were included in the MSCI Frontier Market Index while BF Biosciences, Biafo Industries and Power Cement were added to the MSCI Frontier Market Small Cap Index.

However, the review fell short of market expectations, leading to subdued activity, it said. The uptick was largely driven by Pakistan Petroleum, The Bank of Punjab, Pakistan Telecommunication Company, Askari Bank and Maple Leaf Cement, which collectively contributed 202 points to the index.

On the flip side, Habib Bank, Hub Power, Millat Tractors, Bank Alfalah, Mari Petroleum and National Bank wiped off 220 points, Topline stated. Arif Habib Limited (AHL) noted that stocks registered a marginal decline following a sharp move higher earlier in the week.

Some 44 shares rose while 51 fell with Pakistan Petroleum (+1.84%), The Bank of Punjab (+9.97%) and Pakistan Telecommunication Co (+9.22%) contributing the most to the index gains. Habib Bank (-1.27%), Hub Power (-0.95%) and Millat Tractors (-2.07%) weighed the index down, it said.

Following the MSCI index review for February 2025, "Pakistan's weight in the MSCI Frontier Market Index is estimated to be around +6% and in the MSCI Frontier Market Small Cap Index around +11%," AHL added.

JS Global analyst Mubashir Anis Naviwala remarked that the PSX experienced a volatile session, reaching the intra-day high of 113,437 before profit-taking dragged it down to 112,621. The KSE-100 index ultimately closed lower by 85 points at 112,925.

He recommended a buy-on-dips strategy, particularly in exploration and production, pharmaceutical and fertiliser sectors that appeared poised for an upside potential.

Overall trading volumes increased to 669.6 million shares compared with Tuesday's tally of 486.9 million. Shares of 441 companies were traded. Of these, 172 stocks closed higher, 211 decreased and 58 remained unchanged.

The Bank of Punjab was the volume leader with trading in 195.5 million shares, rising Rs1.08 to close at Rs11.91. It was followed by Bank Makramah with 46.6 million shares, gaining Rs0.32 to close at Rs4.18 and Pakistan Telecommunication Co with 30.2 million shares, gaining Rs2.09 to close at Rs24.77.

During the day, foreign investors sold shares worth Rs433.6 million, the National Clearing Company of Pakistan (NCCPL) reported.