Market watch: Stocks fall on profit-booking amid FATF jitters

The Pakistan Stock Exchange (PSX) endured selling pressure on the first day of rollover week on Monday and the benchmark KSE-100 index failed to sustain the 46,000-point mark as profit-booking kicked in.

Investors remained jittery as they chose to trade cautiously ahead of the outcome of a Financial Action Task Force (FATF) meeting. A four-day virtual plenary began on Monday and final decision would be announced by the FATF president on February 25.

Overall, investors’ interest in equities remained low in the absence of positive triggers. Another factor that dampened investors’ sentiment was the first day of futures rollover week, which led to heavy selling.

Unimpressive performance of the banking sector also had an impact ahead of UBL financial results scheduled to be announced on February 24.

Earlier, trading kicked off on a positive note and the market climbed in initial dealings. However, the advance proved short-lived as participants resorted to profit-booking, thus eroding the gains and dragging the index downwards.

The bourse fell steadily till the close of trading. A few attempts were made to lift the KSE-100 index upwards, however, they proved futile.

At close, the benchmark KSE-100 index recorded a decrease of 337.61 points, or 0.73%, to settle at 45,890.04 points.

Arif Habib Limited, in its report, stated that the market came down on the first day of rollover week.

Negative contribution came from banking sector stocks, where disappointment reigned due to poor dividend distribution and anticipation of similar result from UBL on Wednesday.

“The FATF plenary session started on Monday with anticipation of maintaining the status quo, which also caused a bit of concern among investors, who held on to their positions in the hope of a positive conclusion,” the report said.

Cement, banking, oil and gas marketing and fertiliser stocks endured selling pressure whereas tech stocks performed well.

Sectors contributing to the performance included banks (-218 points), exploration and production (-81 points), cement (-44 points), fertiliser (-23 points) and power (-21 points).

Stocks that contributed positively to the index included TRG Pakistan (+105 points), Gul Ahmed Textile Mills (+12 points), Byco Petroleum (+8 points), Ghani Glass (+6 points) and Feroze 1888 Mills (+5 points).

Stocks that contributed negatively were HBL (-74 points), UBL (-59 points), Oil and Gas Development Company (-34 points), Pakistan Petroleum (-24 points) and Bank AL Habib (-22 points).

JS Global analyst Maaz Mulla said profit-booking was witnessed at the bourse as the KSE-100 index largely remained in the red. “Such activity can be attributed to the first day of futures rollover.”

The index touched intra-day low of -465 points and closed at 45,890, down 338 points. Top volume leaders of the bourse were Hum Network (+6.8%), Byco Petroleum (+6.5%) and TRG Pakistan (+7.1%), contributing a cumulative 270 million shares to the total volume.

On the news front, Pakistan and the International Monetary Fund agreed to explore options either to jack up the size of remaining loan tranches or to extend the timeframe beyond September 2022 under the existing $6 billion Extended Fund Facility (EFF).

The banking sector faced selling pressure where UBL (-4.1%), HBL (-3.5%), Bank Alfalah (-3.3%), The Bank of Punjab (-2%) and Faysal Bank (-2.3%) lost ground.

Similar sentiment was seen in the cement sector where Kohat Cement (-3.1%), Cherat Cement (-2.3%), Fauji Cement (-1.1%), DG Khan Cement (-1.1%) and Pioneer Cement (-0.4%) closed lower.

“Moving forward, the market is expected to remain volatile due to the ongoing FATF meeting,” the analyst said. “We recommend investors to take any downside as an opportunity to build positions in cement, steel and refinery sectors.”

Overall trading volumes rose to 722.1 million shares compared with Friday’s tally of 694.8 million. The value of shares traded during the day was Rs25.8 billion.

Shares of 414 companies were traded. At the end of the day, 162 stocks closed higher, 230 declined and 22 remained unchanged.

Hum Network was the volume leader with 114.3 million shares, gaining Rs0.52 to close at Rs8.13. It was followed by Byco Petroleum with 109.1 million shares, gaining Rs0.67 to close at Rs10.97 and TRG Pakistan with 46.4 million shares, gaining Rs9.75 to close at Rs146.59.

Foreign institutional investors were net buyers of Rs15.46 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.