Rough days for PSX

A downward trend ruled the market this Friday as stocks fell in all major sectors and trading volumes declined well below this week’s average. Overall the stocks of 245 companies lost value while 121 bucked the trend and stayed in the black. The biggest loss was suffered by UBL whose stock plummeted by -2.44% primarily due to rumours regarding changes in the bank’s top management. The HBL stock was similarly in decline. Meanwhile the Oil and Gas sector saw its share prices eroding due to the drop in international price of crude oil. Both OGDC and PPL were in the negative as the sector is extremely sensitive to international trends. Similarly, the fertiliser sector suffered due to news that the Ministry of National Food Security and Research has withheld payments to companies until such time as audits of their claims is completed.

It was because of these multi-sector losses that the index dropped 200 points and closed below 49,200. This despite the interest shown by foreign buyers on Thursday and news that stock brokers have received the sales proceeds from the PSX. As UBL attempts to stem the damage done due to the multiple negative reports regarding its top management shakeup and the international oil prices crawl up from their lowest level in the past three months, the situation for our stock market may change in the coming week. However the situation is not helped by ongoing political uncertainty in the country due to the awaited decision on the Panama Papers case. Despite the fact that PSX has been built up as going in the new and more positive direction in recent months since sale of 40% of its stake to a Chinese consortium and the hype around CPEC, other news tends to dominate the business news cycle as well. It has become evident that CPEC alone cannot hold the market against outside pressures even though it has been built up as a big contributor to our economy. Whether the PSX is able to retain its ranking as one of the top performing stock markets this year remains to be seen.

Published in The Express Tribune, March 13^th, 2017.

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