PSX tumbles on MSCI’s reclassification to Frontier Markets

Javed MirzaWeb Editor

25th Jun, 2021. 07:49 pm
PSX remains lacklustre

KARACHI: The Pakistan Stock Exchange (PSX) tumbled on the last day of the rollover week, as Morgan Stanley Capital’s announcement regarding reclassification of Pakistan to Frontiers Markets was taken negatively by the market, dealers said.

Ahsan Mehanti at Arif Habib Corp said the stocks closed lower on uncertainty over FATF decision on Pakistan action plan and exit from the grey list and the MSCI consultation over downgrading to the Frontier Markets status by September 7, this year.

“Institutional support remained on [the] higher global crude oil prices and the rupee stability. However, [the] impact of Senate approval for 10 per cent surcharge on [the] industrial power tariff and reports of $632 million current account deficit in May 2021 played a catalytic role in the bearish close.”

The Pakistan Stock Exchange KSE-100 shares index shed 0.75 per cent, or 359.18 points, to close at 47,603.36 points. The KSE-30 shares index shed 0.96 per cent, or 184.92 points, to close at 19,113.68 points.

As many as 402 scrips were active, of which 155 advanced, 229 declined and 18 remained unchanged. The ready market volumes stood at 761.42 million shares, compared with the turnover of 638.84 million shares in the last trading session.

An analyst at Topline Securities said the market largely remained under pressure during the day.

“This pressure in [the] market can be attributed to [the] news that MSCI may reclassify Pakistan from [the] Emerging Markets (EM) to Frontier Markets (FM), as [the] MSCI EM constituents Lucky Cement (LUCK), Habib Bank Limited (HBL) and MCB Bank lost value to weigh down the index by 124 points.”

The steel sector also remained under pressure, as the plants announced closures to retaliate against the government’s decision to incentivise manufacturers in the erstwhile Federally-administered Tribal Areas.

Going forward, analysts expect the market to react in line with the upcoming FATF announcement.

The companies that reflected the highest gains included Pak Services, up Rs58.14 to close at Rs900/share; and Nestle Pakistan, up Rs55 to close at Rs5,815/share.

The companies, which reflected the most losses included Sapphire Textile, down Rs37.5 to close at Rs872.5/share; and Abbott Laboratories, down Rs27.56 to end at Rs725.44/share.

The highest volumes were witnessed in WorldCall Telecom with a turnover of 142.17 million shares, as the scrip gained 90 paisas to close at Rs3.95/share; followed by Byco Petroleum with a turnover of 53.80 million shares. It shed 35 paisas to close at Rs12.15/share without any change. Pace Pakistan was the third with a turnover of 45.15 million shares. It gained 11 paisas to finish at Rs6.96.

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