Pakistan stocks remain volatile as talks with IMF keep investors at bay

KARACHI: The Pakistan Stocks Exchange (PSX) witnessed volatility on Tuesday due to the ongoing talks with the International Monetary Fund (IMF) that kept the investors at bay, dealers said.

Ahsan Mehanti at Arif Habib Corp said that profit-taking was witnessed at the bourse on pre-budget uncertainty. Investors remained concerned over the slump in the global crude oil prices while weak global equities invited pressure.

“Midsession support was witnessed in [the] energy stocks after Rs89 billion settlement of power producers’ dues and upbeat sales data in fertilizer, autos and cement sectors during May 2021.”

However, investors’ concern over foreign outflows, deadlock over the IMF’s tax measures, and the rupee instability played a catalytic role in the bearish close.

The Pakistan Stock Exchange KSE-100 shares index shed 0.32 per cent, or 154.68 points, to close at 48,147.98 points. The KSE-30 shares index shed 0.42 per cent, or 83.19 points, to close at 19,574.92 points.

As many as 422 scrips were active, of which 139 advanced, 268 declined and 15 remained unchanged.

The ready market volumes stood at 1.04 billion shares, compared with the turnover of 936.08 million shares in the last trading session.

An analyst at Arif Habib Limited said that the market slumped bearing selling pressure that began a day ago.

“[The] increase in cement price/bag helped cement stocks trade-in [the] green, whereas Kot Addu Power (KAPCO) saw price moving up on the notification of board meeting to consider interim dividend.”

“On the other hand, TRG Pakistan contributed to [the] downside in Index due to concerns over minimum global tax as envisaged by EU and the US.”

Maaz Mulla at JS Global Capital said despite starting on a positive note, the market soon slid into the negative territory.

“The coronavirus positivity ratio has dropped to 3.02 per cent in Pakistan, according to the National Command and Operation Centre (NCOC).”

Selling pressure was witnessed in refineries, steel, and technology sectors where Byco Petroleum (BYCO) declined 2.1 per cent, Attock Refinery (ATRL) was down 2 per cent, National Refinery Limited (NRL) declined 1.4 per cent,

International Steel Limited (ISL) down 1.8 per cent, Agha Steel (AGHA) down 1.5 per cent, and TRG Pakistan declined 3.9 per cent.

An analyst at Pearl Securities said the National Economic Council (NEC) approved a 40 per cent higher development outlay for FY22.

“In addition, the government has approved a cut in duties on raw materials under 600 tariff lines. As a result, the market made an intraday high of 107 points before succumbing to profit-taking.”

Going forward, analysts anticipate the market to maintain its momentum once the clarity of the IMF discussions comes up, and recommend investors to avail of any downside, as a buying opportunity in construction and export-oriented sectors.

Companies that reflected the highest gains included Nestle Pakistan, up Rs69.52 to close at Rs5,776.19/share; and Rafhan Maize, up Rs65 to close at Rs9,790/share.

Companies that reflected the most losses included Unilever Foods, down Rs699 to close at Rs16,500/share; and Wyeth Pakistan, down Rs182.57 to end at Rs2,251.82/share.

The highest volumes were witnessed in WorldCall Telecom with a turnover of 399.96 million shares. The scrip gained 14 paisas to close at Rs3.64/share; followed by Byco Petroleum with a turnover of 37.8 million shares.

It sheds 24 paisas to close at Rs11.25/share. Hum Network was the third with a turnover of 35.11 million shares, as it sheds 26 paisas to finish at Rs8.42.

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