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Thursday March 28, 2024

Stocks decline on profit-taking amid FATF jitters

By Our Correspondent
October 15, 2019

The capital market declined on Monday on profit-taking as well as jitters created by the much awaited outcomes of the Financial Action Task Force (FATF) review on Pakistan’s compliance report, dealers said.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Pressure remained at PSX on investor concerns over economic uncertainty after the World Bank reported on economic stagnation, high debt vulnerabilities, and fall in global crude oil prices.”

Trade remained thin as investors remained cautious ahead of corporate results due this week. Uncertainty over outcome of FATF proceedings on FATF action plan, surging public debt and concerns over political noise played a catalytic role in the bearish close in overbought scrips, Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.84 percent or 289.43 points to close at 34,186.26 points level. KSE-30 shares index followed suit with a low of 0.91 percent or 147.66 points to end at 16,089.72 points level.

Of 371 active scrips, 103 moved up, 244 retreated, and 24 remained unchanged. The ready market volumes stood at 137.932 million shares, as compared with the turnover of 287.100 million shares in the previous session.

Commercial banks, cements, and pharmaceuticals were the major draggers taking off 203.4 points cumulatively.

Madiha Javed head of research at Ismail Iqbal Securities said, “The KSE-100 index turned volatile and closed in red ahead of FATF’s (Financial Action Task Force) review meeting for Pakistan’s status on the grey list.”

Moreover, result season starting from tomorrow might limit further upside and see some profit-taking this week. World Bank projected Pakistan’s GDP growth at 2.4 percent in the current fiscal year, which was the lowest among regional countries, she added.

The World Bank has said Pakistan’s economy was slowing as it faced yet another macroeconomic crisis due to high twin deficits and low foreign reserves. The outlook for medium-term growth, meanwhile, hinged on the country’s ability to implement necessary structural reforms to boost competitiveness and achieve sustained growth, the report said.

Salman Ahmad, head of institutional sales at Aba Ali Habib, said, “The stock market was bound to shed weight because during the last week it almost gained 4.4 percent and from the low of August 16 it has appreciated by 20 percent.”

Eyes were now glued to the FATF meeting in Paris, where Pakistan would be discussed for two sessions amid Pakistan government claims that most of the conditions raised by the Group have been met. The FATF decision would set the tone of the market this week, Salman added.

The highest gainers were Rafhan Maize, up Rs325.50 to close at Rs6,835.50/share, and Unilever Foods, up Rs305.98 to finish at Rs6,425.95/share.

Companies that booked highest losses were Bhanero Textile, down Rs43.66 to close at Rs850.01/share, and Pakistan Tobacco, down Rs21.00 to close at Rs2,399.00/share.

WorldCall Telecom recorded the highest volumes with a turnover of 14.251 billion shares. The scrip lost Rs0.05 to end at Rs1.06/share.

The lowest volumes were witnessed in Bank of Punjab recording a turnover of 3.091 million shares, whereas the scrip lost Rs0.28 to end at Rs9.51/share.