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June 20, 2019

Directionless market finishes flat; investors await budget approval

Business

June 20, 2019

Stocks ended flat on Wednesday following range bound trade amid a directionless market on account of budget approval, as most of the financial institutions sold their shares ahead of year end closing to square their positions and book available profit, dealers said.

Faizan Munshey, head of foreign institutional sales at Next Capital, said, “Pakistan equities closed mostly flat after trading in a narrow band on Wednesday.”

Lack of positive triggers further dampened investor sentiments, as they were looking for any developments that could give the market a direction.

The opposition’s struggle to stop the passage of the federal budget 2019-20 from the national assembly has been keeping the index under check, he added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 0.07 percent or 25.60 points to close at 34,656.12 points level. KSE-30 shares index followed suit with a low of 0.02 percent or 3.51 points to end at 16,351.34 points level.

Of 316 active scrips, 136 moved up, 160 retreated, and 20 remained unchanged. The ready market volumes stood at 99.345 million shares, as compared with the turnover of 104.130 billion shares in the previous session.

Topline Securities in its post-market note said the market was flat on lack of news flows.

“Uncertainty regarding budget approval continues to persist, as opposition leader in his speech today at the National assembly has demanded major changes in the budget, declaring it as IMF influenced,” it noted.

A leading trader said though investors now have clarity on the International Monetary Fund (IMF) programme, and the board would meet on July 3 to approve the package, the deliberation was yet to be seen.

State Bank of Pakistan Governor Dr Reza Baqir in his maiden press conference had said that following approval, the IMF would reveal the agreement as to what the government and the international financial institutions have discussed and agreed upon.

The market remained listless because of reports that starting the new fiscal year, the government would likely increase gas and electricity tariff again.

However, it played a positive role for the gas distribution companies, as Sui Southern gas Company went up 0.63 percent, and Sui Northern Gas Pipelines Limited went up 1.58 percent.

Both would have a major impact on inflation and earnings of the companies in the upcoming quarters. Another factor which deterred fresh flows in the market was the negative vibes surfacing from the foreign exchange market.

Rupee depreciated again and reached a record high level, despite a statement by the exchange companies’ officials that $1 billion would be infused in the interbank market within the next three months.

The highest gainers were Nestle Pakistan, up Rs96.71 to close at Rs6,849.00/share, and Hinopak Motor, up Rs14.90 to finish at Rs329.90/share.

Companies that booked highest losses were Unilever Foods, down Rs268.75 to close at Rs5,170.00/share, and Indus Motor Company, down Rs39.40 to close at Rs1,125.51/share.

Maple Leaf recorded the highest volumes with a turnover of 14.134 billion shares. The scrip gained Rs0.07 to close at Rs25.36/share.

The lowest volumes were witnessed in Pakistan International Bulk recording a turnover of 2.100 million shares, whereas the scrip lost Rs0.03 to end at Rs8.56/share.

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