Market slips below 40,000-point level

LAHORE - Carnage was witnessed at the Pakistan Stock Exchange on Monday as the KSE 100-index lost around 996 points to close below the psychological level of 40,000 points, at 39,288 points.

Volumes remained subdued as 124m shares changed hands during the day. KEL (-5.4 percent) from the power sector led the volumes with more than 11m shares exchanging hands. Most of the dull activity can be attributed to political uncertainty and lack of positive triggers. On the political front, ousted Prime Minister Nawaz Sharif and his daughter, Maryam Nawaz, are set to return to the country on July 13, 2018.

Cement sector closed lower on the back of increase in Richard bay coal price to USD 108. DGKC (-5.0 percent), LUCK (-3.4 percent), MLCF (-5.0 percent) and PIOC (-5.0 percent) were the major losers of the mentioned sector. Uncertainty was witnessed in the banking space on the back of the news that the Supreme Court of Pakistan ordered to place the names of heads of three banks on the Exit Control List (ECL) in relation to a fake bank accounts case. As a result, UBL (-4.8 percent) closed close to its lower circuit.

Other major players such as MCB (-2.5 percent), HBL (-2.5 percent) and BAFL (-2.2 percent) were among the major laggards of the sector. POL (-3.3 percent) and OGDC (-0.7 percent) closed in the red zone as crude oil prices edged lower in the international market. It is expected that market will exhibit volatility in the coming sessions due to overall ambiguities in the political environment.

Experts said that bears dominated the KSE-100 for yet another day. In the past 7 trading sessions, the market has fallen by 2,709 points (down in 6 out of the 7 sessions). This amounts to 2.5 percent decline over the last trading session and 6.5 percent fall in the past 7 trading sessions.

Along with the persistent and increasing political noise in the form of return announcement of the Sharifs, market also reacted negatively on news related to involvement of major banks in money laundering scandal and lower than expected Urea off-take. The biggest drags in session were commercial banks, fertilizer and cements contributing 531 points to the index decline. Worst performing stocks included UBL (-4.8 percent), HBL (-2.7 percent) and ENGRO (-3.4 percent).

Traded volume and traded value was up by 19 percent & 60 percent, respectively.

Experts said that confusion gripped the auto market over the matter of sale of new automobiles to non-filers of tax returns. The Finance Act, 2018 prohibited any sale of new vehicles to non-filers, but a letter from Director Excise and Taxation, Region C, Lahore claimed the requirement does not apply to cars below 1000cc engine capacity. However, Jahangir Ahmad, Commissioner Inland Revenue in Lahore, says that the matter is “under process and shall be referred to the Federal Bureau of Revenue (FBR),” adding that excise and taxation director has circulated a fake clarification.

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