KSE-100 falls below 43,000 as profit-taking kicks in

The Pakistan Stock Exchange was the brunt of profit-taking that ended its five-session gaining spree, as the benchmark KSE-100 Index registered a decline of over 300 points, while both volume and value of shares traded decreased on Wednesday.

Indices slipped lower during the day with the KSE-100 hitting an intra-day low of 42,718.73, down by 354 points.

At close on Wednesday, the KSE-100 finished with a loss of 322.10 points, or 0.75%, to close at 42,756.04.

Fifth successive gain: KSE-100 inches up in volatile session

“Equities closed on a negative note amid expectations of higher inflation ahead coupled with withdrawal of fuel and energy subsidies in the upcoming budget, which is due on 10th June 2022,” said Topline Securities in its post-market comment.

For weeks, deteriorating economic indicators and political uncertainty kept Pakistan equities at the receiving end. The KSE-100 index witnessed a sharp decline of 2,171 points / 4.8%, MoM, during May to close at 43,078 points, taking the FYTD return to -9.03% (USD based return of -27.8%).

“Market is eagerly anticipating announcement of the IMF agreement which will not only allow country to unlock further inflows and help meet its maturing debt liabilities, but also help instill confidence in the market,” said AKD Securities in a note.

The brokerage house said that the government has already made headway on reviving the deal by partially rolling back subsidies on the consumption of fuel. “However, more needs to be done to get IMF on board.”

The market will also track the budget announcement closely where the government is expected to announce a tax collection target or PKR7.1trn, added AKD Securities.

“Budgetary spending will also likely be adjusted downwards in order to contain the fiscal slippages,” it said. “We continue to advocate holding a cautious approach in the market where the positions should be built on the dips.”

On the economic front, CPI-based inflation increased by 13.8% on YoY basis in May as compared to an increase of 13.4% in April and 10.9% in the same period last year, shared Pakistan Bureau of Statistics (PBS).

On the corporate front, Mari Petroleum Company Limited (MPCL) informed the bourse that it has made a gas/condensate discovery in its exploration well located in North Waziristan, Khyber Pakhtunkhwa.

Meanwhile, the rupee appreciated for the fourth successive session against the US dollar and closed at Rs197.87 in the inter-bank market on Wednesday.

Sectors dragging the benchmark KSE-100 index downwards included banking (71.09 points), power generation and distribution (69.20 points) and cement (57.93 points).

Volume on the all-share index declined to 194.4 million from 285.4 million on Tuesday. The value of shares traded decreased to Rs5.35 billion from Rs7.39 billion recorded in the previous session.

Silkbank Limited was the volume leader with 24.63 million shares, followed by Unity Foods Limited with 14.10 million shares, and Ghani Global Holdings with 13.5 million shares.

Shares of 334 companies were traded on Wednesday, of which 98 registered an increase, 207 recorded a fall, and 29 remained unchanged.