Stocks flat on IMF, inflation frets

Stocks finished flat on Friday owing to late profit-taking as investors continued to keep their fingers crossed over the release of next IMF tranche, while a sudden hike in the petroleum prices caught them off guard, traders said.

KSE-100 Share Index, the main gauge of country’s capital market, closed higher by 76.62 points or 0.16 percent to 47,295.80 points. The highest and the lowest of the day were 47,607.45 points and 47,184.06 points respectively in the session. Brokerage Arif Habib Ltd in a post-market note said positive momentum was witnessed just after the opening bell as the cement sector led the rally owing to rumors of price hike in the upcoming week.

Cement and banking stocks contributed the most in the bull-run, the brokerage added. It said activity continued to remain sideways as market witnessed hefty volumes in the 3rd tier stocks. Overnight fuel price increase by the government concerned the investors towards inflationary pressure, the brokerage said.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, Pakistan Stock Exchange's (PSX) benchmark index closed higher on speculations on a likely release of next IMF tranche, strong data on oil sales surging by 17 percent, and exports by 17.5 percent in October 2021.

Rupee stability, surging foreign exchange reserves, and robust financial results in banking, fertilisers, and the oil led to a bullish close, Mehanti added.

Volumes dropped 92 million shares to 469.86 million from 561.93 million, while traded value decreased to Rs15.94 billion from Rs16.00 billion. Market capital increased to Rs8.096 trillion from Rs8.090 trillion. Out of 363 companies active in the session, 180 posted gains, 164 losses, while 19 remained unchanged.

Topline Securities in its market review said the main index opened on a positive note and gained to make an intraday high of 389 points; however, profit-taking the later hours dragged in down to close at 47,296 points.

Major contribution came from UBL, HBL, MCB, OGDC, and PIOC, as they cumulatively contributed 102 points to the index, whereas FFC, TRG, SYS, POL, and THAL lost value to strip the index of 124 points, the brokerage said.

JS Research in its market wrap said with the announcement by the government to increase petroleum products prices by Rs8/liter, the market preempted that agreement with IMF would materialise soon. “Going forward the market will remain sensitive to news flow regarding monetary policy and current account print for November 2021,” the brokerage said. Wyeth Pak Ltd was the top gainer of the day as it jumped Rs64.03 to Rs1,500/share, followed by Sapphire Fiber that gained Rs61.01 to close at Rs901/share. Nestle Pakistan suffered the worst losses by shedding Rs125.98 to end at Rs5,870/share, followed by Colgate Palm lost Rs17.90 to finish at Rs2,632/share.

The percentage-wise highest increase was recorded in shares of MERITR2, SPLC, GRYL, HASCOL, REDCO, UVIC, AGSML, PIM, GATI, and HINO while top decliners included FANM, FIBLM, TRSM, DSML, BUXL, DADX, ARUJ, EFGH, ANTM and KPUS. On the other hand, SPI increased by 0.67 percent week on week and 15.21 year on year. One analyst said a rise in prices especially of petroleum products would have an impact on investor sentiment. “Further delay in the resumption of IMF loan may weigh on the market,” the analyst added.

WorldCall Telecom was the volume leader with with 41.91 million traded shares, trailed by Ghani Global Holdings with 36.44 million shares.

Stocks that recorded significant turnover included Telecard Limited, Firs National Equities, Hascol Petrol, Unity Foods Ltd, Byco Petroleum, Pace (Pak) Ltd, Azgard Nine, and TPL Properties. Turnover in the future contracts shrank to 117.83 million shares from 140.18 million.