Equity market slides in post-budget consolidation phase

Web DeskWeb Editor

17th Jun, 2021. 08:30 pm
Equity Market

KARACHI: The equity market slid to close in the negative zone on Thursday, as investors opted to square their positions in a post-budget consolidation phase ahead of the Financial Action Task Force (FATF) meeting, scheduled next week, dealers said.

An analyst at Pearl Securities said the market ended the day in the red territory where banking, power, and oil marketing companies cumulatively eroded 140 points from the index.

“Volatility was observed at the bourse, as [the] IMF program[me] has been delayed for three months and investors were also concerned over [the] FATF meeting, which is due next week. Furthermore, [the] ECC [Economic Coordination Committee] has decided to defer the payments of Independent Power Producers (IPPs), which further drop the market sentiment.”

The Pakistan Stock Exchange KSE-100 shares index shed 0.67 per cent, or 323.27 points, to close at 48,157.63 points. The KSE-30 shares index shed 0.65 per cent, or 126.68 points, to close at 19,421.09 points.
As many as 413 companies were active, of which 116 advanced, 283 declined and 14 remained unchanged. The ready market volumes stood at 1.11 billion shares, compared with the turnover of 936.6 million shares in the last trading session.

Ahsan Mehanti at Arif Habib Corp said that the stocks fell sharply, amid consolidation in the post-budget session, a slump in the global crude oil prices, and weak global equities.

“Investors’ concerns over hike in [the] power tariff, foreign outflows, and political noise played a catalytic role in the bearish close.”

An analyst at Arif Habib Limited said the market tumbled again on Thursday with a drop of 365 points during the session to close 257 points down.

“Refineries, oil and gas marketing companies, cement, engineering, banks, fertiliser, and technology stocks saw persistent selling pressure despite budget incentives announced last Friday.”

The exploration and production (E&P) companies were relatively unscathed on the back of stable oil prices, which hovered around $74/bbl. It is hoped that there will be good news for Pakistan at the FATF’s plenary session, starting June 21, as Pakistan has implemented 26 of the 27 points of the FATF action plan.

Going forward, analysts expect the market to move both ways and recommend investors to book profits at higher levels.

The companies that reflected the highest gains included Wyeth Pakistan, up Rs82.45 to close at Rs2,325.83/share; and Nestle Pakistan, up Rs30 to close at Rs5,780/share.

The companies, which reflected the most losses included Island Textile, down Rs50.01 to close at Rs2,250/share; and Pak Services, down Rs30.67 to end at Rs910.12/share.

The highest volumes were witnessed in WorldCall Telecom with a turnover of 243.17 million shares. The scrip gained 17 paisas to close at Rs4.01/share; followed by the SilkBank with a turnover of 188.56 million shares. It gained 23 paisas to close at Rs1.8/share. K-Electric was the third with a turnover of 57.43 million shares. It sheds 11 paisas to finish at Rs4.36.

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