KARACHI: Pakistan Stock Exchange (PSX) benchmark KSE 100 index shed 586.23 points as the rally started in December seems to have come to an end, meanwhile, PIA jumped 22.99 per cent after media reports stated the privatisation minister as saying that the government will try to privatise Pakistan International Airlines (PIA) before general elections due this year.
Meanwhile, the heated political scene in the country spooked investors as they maintained their distance. Consequently, KSE-100 index tanked 586 points or 1.4 per cent to close at 42,347 points mark. Market participation slipped on day on day basis to just 55.75 million shares or -48.8 per cent from 108.96 million in the previous session as investors were reluctant to let go of their trading positions in preferred names.
To recall, the KSE 100 Index has been sliding down the bannister after gaining more than 15 per cent in just 15 days. Perhaps it is the extent of the recent run-up in a very short duration that has pushed away buyers from initiating another round of demand more so as certain key stocks have outperformed the broader market within this limited time span and lost their shine to potential investors. Technical breaches of trend line support, 200EMA and 50WEMA have also contributed towards further retreat for the 100 Index.
Privatisation Minister Daniyal Aziz while speaking to the media here on Monday shared government’s plans to privatise PIA before the general elections later this year. He maintained that the national airline has caused the state losses to the tune of at least Rs 325 billion.
The news was welcomed by investors as PIA shares surged 22.99 percent during the trading session. Aziz also said that the government has resolved to privatise all the state-owned companies that are costing billions in losses. He added that the economy is burdened by Rs 600 billion annually owing to loss-bearing companies which is why they are needed to be privatised. While talking about the national carrier, Aziz said that the government would treat assets of the airline and aviation section separately.
However, a press release said that PIA has no plans to shrink its network purposely as falsely reported in a section of media. The news is not only misleading creating a wrong perception but also aimed at damaging the image of the airline affecting its sales.
The KMI 30 index lost 838.43 points during the session before it ended down 742.06 points at 71,427.78.
The KSE All Share index concluded 366.99 points in the red at 30,565.08. The advancers to decliners ratio stood at 101 to 231. The major contribution to total market volume came from ANL (+2.34 per cent), TRG (-5 per cent) and PIAA (+22.99 per cent) churning 33.98 million shares out of the All Share volume of 130.45 million shares.
Daily traded value for the KSE 100 Index declined to $ 41.44 million from $ 73.54 million in the previous session (-43.7 per cent on d/d basis); SNGP ($ 3.5 million), ENGRO ($ 3.23 million) and ISL ($ 3 million) were among top contributors from traded value perspective.
Major contribution to the 100 Index downside came from HBL (-2.23 per cent), UBL (-2.33 per cent), FFC (-3.33 per cent), POL (-3.11 per cent) and PPL (-1.53 per cent) taking away 233 points.
Despite WTI crude oil trading well above $ 64/bbl, little support was seen from E&Ps besides OGDC.
On the flip side, ENGRO (+0.68 per cent), OGDC (+0.38 per cent) and DAWH (+0.75 per cent) added 26 points. The 100 index is 12 per cent away from its 52-week low of 37,736.73 reached on December 12 and 20 per cent below its 52-week high of 53,127.24 touched on May 25.
On the sector front; index heavy banks shed 150 points, followed by E&Ps which eroded 74 points, fertilizer was down 51 points, OMCs 45 points, engineering 43 points, power 29 points, tech 24 points & cement 21 points, whereas no major sectors were positive.
The engineering sector was top loser amongst all. The sector chopped off 4.17 per cent from its market capitalisation. Ittefaq Iron Industries Limited (ITTEFAQ -4.99 per cent) hit the lower circuit breaker. Crescent Steel and Allied Products Limited (CSAP) was down 4.48 per cent while Amreli Steels Limited (ASTL) depreciated by 2.72 per cent.
Technically speaking, the 100 index extended its losses for the 3rd consecutive session amid a sharp decline in market participation as the cooling off phase continues.
