Stocks fade out as economic fog persists amid IMF concerns

Stocks were sluggish for another successive session on Tuesday as obscurity persists on the bottom line of the recent talks with International Monetary Fund (IMF) and the government talks, especially regarding hiking power and gas tariff amid an ever-swelling domestic and external debt, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 shares index lost 0.25 percent or 101.58 points to close at 40,175.35 points, while KSE-30 edged 0.05 percent or 9.03 points down to end at 18,595.01 points.

Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed lower in thin trade at the PSX on investor concerns over economic uncertainty and outcome of FATF review”. Textile and banking stocks outperformed on strong financials and upbeat data on textile exports

in July-January FY20, Mehanti said.

“Foreign outflows, weak financial results in auto and cement stocks and concerns over IMF resistance over revised revenue targets and tariff reduction kept the stocks under pressure,” Mehanti added.

Of 334 active scrips, 119 went up, 192 down, and 23 didn’t budge. The ready market volumes slumped to 91.643 million shares, against 99.965 million shares in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said “The volume was thin which clearly indicates lackluster support from investors”. Ahmad added the market was now in need for some trigger to move ahead, while investors were anxiously waiting for the outcome of FATF (Financial Action Task Force) meeting”.

“Furthermore…extension in meeting all the conditions will be fruitful but a decision on part of the anti-terror financing watchdog will help build a new rally at the market,” he added.

An analyst said the energy sector dominated the market as all the heavyweights declined sharply because of a delay in clearing outstanding payments of the oil and other companies. “The issuance of Rs200 billion sukuk bonds is lying in limbo and ministries of petroleum or finance are yet to come up with a final nod on the issue,” the analyst said. Dull crude oil prices, which recorded small declines, reflected in local stock market, where several listed companies slipped. Pakistan State Oil lost Rs10.72 to close at Rs182.30, Shell’s scrip fell to Rs192.32, while Pakistan Petroleum Ltd was down Rs2.01 to end at Rs128.16.

Habib Bank, despite facing penalty from the SBP amounting to Rs12.8 million, was up Rs1.55 to close at Rs 171.78 with a hefty volume of 5.376 million shares.

The share was up on hopes of robust financial results for 2019, where net interest income and revenues were seen registering an appreciable increment, said a leading trader. The highest gainers were Indus Dyeing, up Rs43.94 close at Rs719.94/share, and Service IndustriesLimited, Rs27.46 to finish at Rs998.13/share. Main losers were Pakistan Tobacco, down Rs138.71 to close at Rs1,995.29/share, and Colgate Palmolive, down Rs110 to close at Rs2,040/share.

Unity Foods Limited led the volumes with 13.375 million shares and gained Rs0.08 to end at Rs13.90/share.Hascol Petrol’s turnover was lowest of the day with 2.570 million shares; however, it went up Rs1 to end at Rs27.15/share.