PSX closes flat amid lack of positive triggers

Author: Staff Report

KARACHI: Pakistan equities closed flat on Tuesday post Eid holidays with benchmark KSE-100 index settling at 43,683, up a mere 2 points from last close.

Blue chips were dull in early trade; however large cap banks gradually slid throughout the day with MCB Bank losing 2.5 percent and Habib Bank Limited (HBL) losing 1.45 percent taking the lead in declines on reports of continuous selling by foreign investors.

The market was excited about the interim Finance Minister’s visit to PSX and discussion on amnesty scheme. Fertilizers were some of the top drivers of the Index due to news that the country is heading towards severe shortage of Urea by July end, which would propel prices.

Contrary to the market sentiments of pre-election rally, which investors believed will start right after holidays’ season, the index stood range-bound between 43,511.65 points to 43,825.11 points. Lackluster activity in bourse is due to lack of positive triggers and uncertain economic situation of the economy, said Aba Ali Habib Securities (Private) Limited research report.

Pakistan Oil Fields (POL) losing 1.24 percent and Oil Gas Development Company (OGDC) losing 1.55 percent also dragged the index on decline in international crude oil prices and market expectations of reduction in production cuts to be announced by OPEC (Organization of the Petroleum Exporting Countries) in its upcoming meeting over the weekend.

On the other hand, Fertilizer sector stole the show as Fauji Fertiliser Company (FFC) gaining 4.44 percent, Engro Fertiliser gaining 1.97 percent and Fauji Fertilizer Bin Qasim (FFBL) gaining 0.99 percent closed positive on reports of urea shortage and resultant retail price increase by the dealers in the market, with investors betting on another round of price hikes by the manufacturers if the government fails to release the overdue past subsidies.

Elixir Securities’ analyst Muhammad Arbash expects market to remain range bound this week as locals keenly watch out for the outcomes on Financial Action Task Force (FATF) decision on Pakistan and success of Amnesty Scheme which is due to expire by the end of this month.

Published in Daily Times, June 20^th 2018.