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Thursday March 28, 2024

Stocks fall as investors shed overbought names

By Our Correspondent
April 13, 2021

After gaining over two percent last week, stocks corrected on Monday as investors dumped overbought scrips to square their positions ahead of corporate results announcements, dealers said.

Pakistan Stock Exchange (PSX) KSE-100 Shares Index shed 0.46 percent or 208.43 points to close at 44,978.05 points. Volumes reduced to 503.52 million from 688.03 million in the last trading session.

Ahsan Mehanti at Arif Habib Corp said stocks closed bearish amid pressure in overbought scrips on concerns over economic uncertainty and reports of over Rs6.0 trillion tax collection target for FY22, which was likely to impact corporate earnings.

IMF and WB projections on lower growth at 1.5 percent and 1.3 percent respectively in FY21 amid surging public debt, circular debt and weak economic outlook due to ongoing pandemic dragged the index down, Mehanti added.

As many as 387 scrips were active of which 130 advanced, 234 declined, and 23 remained unchanged. A A H Soomro at KASB Securities said investors were anxious over the Covid infection rate and number of cases in the short term despite strong medium term outlook.

“Covid cases have been north of 5,000 for 4 out of past 5 days, with improvement witnessed on Sunday. However, government officials - Dr Faisal Sultan and Asad Umar - have voiced their concerns that SOPs are not being followed and the hospitalisation levels are increasing day by day to alarming levels of infection rate,” Soomro added.

An analyst said the market took hit from the possibility of imposition of lockdown in the

light of NCOC proposal, although a firm decision was yet to be taken.

Selling pressure was evident across the board with the exception of few scrips, including TRG Pakistan, Ghani Global, MCB Bank and Fauji Fertilizer, which somewhat supported the index. Refinery sector, which had lately coincided with technology stocks, also went down following weak investor sentiment, the analyst added.

Kohat Cement, up 0.7 percent, announced its 9MFY21 earnings per share (EPS) of Rs12.60 versus a loss of Rs1.41/share in the same period last year with no cash pay-out.

On the economic front, remittances from Pakistani workers employed abroad exceeded $2 billion for the 10th consecutive month as they clocked in at $2.7 billion for March, up 43 percent from a year earlier.

Furthermore, Pakistan Petroleum, up 0.04 percent, has received a pay order for Rs903.218 million from the National Accountability Bureau (NAB) against long outstanding receivables from Byco Petroleum Pakistan Limited.

Going forward the market would take cue from Covid cases and earnings announcements. Analysts feel the index may remain flattish until Covid is under control.

Companies reflecting highest gains include AKD Capital, up Rs28.69 to close at Rs411.31/share, and Shezan International, up Rs10 to close at Rs315/share.

Companies reflecting most losses include Colgate Palmolive, down Rs50 to close at Rs2,750/share, and Sapphire Textile down Rs47.07 to end at Rs814/share.

Worldcall Telecom led volumes with a turnover of 73.75 million shares, followed by TRG Pakistan with 42.17 million shares, and Global with a trade of 38.84 million shares.