IMF cautions Pakistan against increasing Chinese involvement in economy
He revealed that heavy selling by foreign and local institutions was mainly in auto, bank and cement stocks. “They are in the phase of readjusting their portfolios in the wake of Pakistan’s negative economic outlook for two years,” Ahmed added.In an earlier development, Pakistan has formally approached the International Monetary Fund (IMF) for a bailout. IMF Managing Director Christine Lagarde announced on Thursday that she would send a mission to Pakistan for bailout negotiations amid emphasis on full disclosure of the debt Pakistan had acquired including from China.The analyst pointed out, “Everyone is foreseeing a rebound in the market any moment. But at the same time, everyone is selling as well to repurchase stocks at lower levels.”There was confusion about the size of IMF bailout Pakistan was seeking. Earlier, there was talk that Pakistan would apply for a $8-12 billion bailout. Now, market talk suggests the package would be around $6-7 billion.
IMF mission to arrive in coming weeks for bailout talks
“If Pakistan receives a low amount, the problem of current account balance may remain in place over the medium term,” the analyst said.JS Global analyst Danish Ladhani said the index came under pressure after street talk suggested that major heavyweights like Lucky Cement, United Bank and Habib Bank could be removed from the MSCI large-cap index in the upcoming semi-annual review on November 13.
It took a toll on the benchmark index, pushing it near the 37,500-point level.
Top heavyweights Habib Bank (-1.88%), Oil and Gas Development Company (-1.82%), Engro (-3.46%), Pakistan Petroleum (-2.10%), MCB Bank (-3.01%), Pakistan Oilfields (-2.87%), United Bank (-1.90%), Fauji Fertiliser (-2.92%) and Lucky Cement (-5%) cumulatively took away 410 points from the index.DG Khan Cement (-4.64%) and Maple Leaf Cement (-4.65%) closed near their lower price limits.“Pressure was also seen in the financial sector where HBL (-1.88%), MCB Bank (-3.01%) and UBL (-1.90%) were the major laggards,” the analyst said.Searl (-2.12%) in the pharma sector announced its FY18 results where the company reported consolidated earnings per share of Rs14.55 with a cash payout of Rs5 and bonus of 15%.
Market watch: KSE-100 dips 394 points as investors stay cautious
In the exploration and production sector, Pakistan Oilfields (-2.87%) announced first-quarter consolidated earnings per share of Rs12.57 with no cash payout. Attock Refinery (-0.99%) reported loss per share of Rs1.97 with no dividend.“Moving forward, we expect investor’s sentiment to remain choppy. Therefore, the KSE-100 will remain under pressure along with selling pressure from foreign investors,” Ladhani added.Overall, trading volumes increased to 135.4 million shares compared with Thursday’s tally of 134.6 million. The value of shares traded during the day was Rs5.5 billion.Shares of 363 companies were traded. At the end of the day, 60 stocks closed higher, 288 declined and 15 remained unchanged.TRG Pakistan was the volume leader with 10 million shares, losing Rs1.18 to close at Rs22.54. It was followed by K-Electric with 8.9 million shares, gaining Rs0.10 to close at Rs5.21 and Engro Polymer with 8.7 million shares, losing Rs0.75 to close at Rs29.36.Foreign institutional investors were net sellers of Rs76.2 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.