Stocks slump on profit-taking

Index plunges 2,000 points over institutional selling, IMF's policy concerns

KARACHI:

Pakistan Stock Exchange (PSX) on Monday took a deep dive after hitting record highs last week as the KSE-100 index plunged over 2,000 points primarily due to institutional profit-taking across various sectors.

Market jitters were compounded by reports of the International Monetary Fund's (IMF) disapproval of policy changes including a reduction in property transaction rates, lowering March 2025 tax target and slashing industrial power tariffs, which weighed heavily on investor sentiment.

Additionally, the negative impact of rising Karachi Inter-bank Offered Rate (Kibor) and an increase in royalty on cement manufacturers in Khyber-Pakhtunkhwa (K-P) further contributed to the market's downturn.

According to Ahsan Mehanti of Arif Habib Corp, stocks closed sharply lower amid institutional profit-taking. Reports of IMF's disapproval of reduction in property transaction rates and lowering of March tax target amid revenue collection shortfall further contributed to the downturn, he said. Mehanti added that higher Kibor as well as reports of no agreement with the IMF on reduction in industrial power tariffs played the role of catalysts in bearish close at the PSX.

At the end of trading, the benchmark KSE-100 index recorded a slump of 2,002.56 points, or 1.69%, and settled at 116,439.62.

In its review, Topline Securities commented that the KSE-100 index ended in the red with a loss of 2,003 points. The market faced downward pressure due to IMF's concerns over the lack of adjustments to electricity tariffs and no reduction in property taxes, as reported in the media, it said. Additionally, the proposed increase in royalty on cement manufacturers in K-P contributed to the negative sentiment.

The decline was primarily driven by Oil and Gas Development Company (OGDC), Engro Corporation, Fauji Fertiliser Company, Pakistan Petroleum and Mari Petroleum, which pulled the index down by 811 points, Topline noted.

Arif Habib Limited (AHL), in its report, stated that selling pressure hit the KSE-100 near the all-time high levels.

Some 16 shares rose while 79 fell with TRG Pakistan (+2.92%), Pakistan Aluminium Beverage Cans (+5.5%) and Atlas Honda (+3.34%) contributing the most to the index gains. On the flip side, OGDC (-4.04%), Pakistan Petroleum (-3.59%) and Mari Petroleum (-2.5%) were the biggest index drags, it said.

Systems Limited announced CY24 earnings per share (EPS) of Rs25.6, down 14% year-on-year. The EPS for 4QCY24 came in at Rs6.9, up 32% year-on-year. In addition, the company announced a final cash dividend of Rs6 per share and a stock split of 5:1, reducing the face value of each share from Rs10 to Rs2. As a result, the total number of ordinary shares would increase from 292.9 million to 1.46 billion, AHL pointed out.

"We are looking forward to the KSE-100 finding support between 115k and 116k this week," it added.

JS Global analyst Muhammad Hasan Ather remarked that profit-taking continued at the start of the week, with the benchmark KSE-100 closing 2,003 points lower at 116,440. Selling was primarily led by stocks of oil and fertiliser sectors, he said. The most active stocks of the day were Pak Elektron, Cnergyico PK and TRG Pakistan with trading in 28.6 million, 19.2 million and 15.7 million shares, respectively.

"Moving forward, while profit-taking is expected to continue, we advise investors to view any dip as a buying opportunity, particularly in oil & gas, cement and technology sectors," Ather added.

Overall trading volumes decreased to 312 million shares compared with Friday's tally of 369.1 million. Shares of 468 companies were traded. Of these, 124 stocks closed higher, 266 fell and 78 remained unchanged. The value of shares traded during the day was Rs21 billion.

Pak Elektron was the volume leader with trading in 28.6 million shares, falling Rs2.31 to close at Rs45.87. It was followed by Cnergyico PK with 19.2 million shares, falling Rs0.04 to close at Rs7.94 and TRG Pakistan with 15.7 million shares, gaining Rs1.99 to close at Rs70.20. During the day, foreign investors bought shares worth Rs498.1 million, the National Clearing Company of Pakistan reported.