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Wednesday, July 6, 2022

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Stocks extend losses amid selling pressure


The Pakistan Stock Exchange endured another volatile session on Tuesday, as investors were observed weighing the impact of ongoing political uncertainty and deteriorating macroeconomic indicators after a brief pause.

Pushed by these factors, the market players opted to offload their stockholdings at attractive valuations and the KSE-100 index lost over 200 points.

Fresh devaluation of the rupee against the US dollar, as it dropped another 1.03% on a day-on-day basis in the inter-bank market, dented the confidence of market participants.

Moreover, uncertainty about the resumption of International Monetary Fund (IMF) loan programme haunted the trading environment at the bourse.

Earlier, the trading started on a positive note as the market rallied in the initial hours, touching an intra-day high of 46,746 points.

However, it failed to sustain the rally due to late-session profit-taking and the index, after oscillating in a narrow range, finally settled in the red zone for the second consecutive day.

At close, the benchmark KSE-100 index recorded a decline of 206.23 points, or 0.44%, to settle at 46,333.36 points.

Topline Securities, in its report, said that Pakistan equities closed in the red as the benchmark KSE-100 index settled at 46,333.

The day kicked off on a positive note, where the market touched an intra-day high of 206 points as investors cheered Engro Polymer and Chemicals’ result announcement and material information, it said.

The company announced its expansion and earnings per share of Rs5.19 along with dividend per share of Rs5 for the first quarter of 2022, which led the stock to close at its upper cap, Topline said.

However, some profit-taking was witnessed in the second half, where major laggards were Hub Power Company, Pakistan Petroleum Limited, TRG Pakistan and Oil and Gas Development Company as they dented the index by a cumulative 134 points.

On the results front, Engro Fertilisers announced earnings per share of Rs4.13 along with dividend per share of Rs5.5 for the first quarter of 2022, while Bank AL Habib declared earnings per share of Rs4.4 for the same quarter, Topline added.

A report of Arif Habib Limited stated that the stock market witnessed profit-taking as the benchmark index opened on a positive note but could not sustain the rally.

Investors opted for across-the-board profit-selling due to the weakening of Pakistani rupee against the US dollar. Main board activity remained dull, but hefty volumes were recorded in third-tier stocks, the report said.

“Sectors contributing to the performance included banks (-89.2 points), exploration and production (-72 points), technology (-51 points), power (-42.6 points) and cement (-37.2 points).”

JS Global analyst Neelam Naz said that the KSE-100 index witnessed another volatile session on Tuesday.

Cnergyico PK (-5.4%), Ghani Global Holdings (-6.7%), WorldCall Telecom (-2.7%), Telecard Limited (-0.6%) and Lotte Chemical Pakistan Limited (+2.3%) were the highest contributors in terms of volume, she said.

“Selling pressure was seen mainly in cement, technology and banking sectors,” the analyst said, adding that rupee depreciation coupled with uncertainty about the IMF loan programme dented the investors’ sentiment.

“Going forward, we recommend investors to avail any downside as a buying opportunity,” the analyst added.

Overall trading volumes dropped to 228.6 million shares compared with Monday’s tally of 255.6 million. The value of shares traded during the day was Rs8.8 billion.

Shares of 345 companies were traded. At the end of the day, 94 stocks closed higher, 226 declined and 25 remained unchanged.

Cnergyico PK was the volume leader with 18.3 million shares, losing Rs0.35 to close at Rs6.14. It was followed by Ghani Global Holdings with 18 million shares, losing Rs1.39 to close at Rs19.36 and WorldCall Telecom with 11.5 million shares, losing Rs0.05 to close at Rs1.8.

Foreign institutional investors were net sellers of Rs142.3 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.

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