Dump and run at PSX as KSE-100 finishes with 1,900-point fall

Index ends near 44,665 as political uncertainty, lack of positive triggers worry investors

KARACHI: The stock market bore the brunt of political uncertainty, with the KSE-100 Index declining from the moment trading began to end with a 1,900-point or 4.08% fall on Monday.

Political uncertainty over the Panama case probe meant that investors adopted a ‘dump-and-run’ approach, pushing the KSE-100 Index below the 45,000-point level.

Lack of positive triggers and selling pressure prevented the market from any recovery, leading the index to close its second consecutive session in the red.

At close, the benchmark KSE 100-share Index finished with a fall of 1,899.88 points or 4.08% to end at 44,665.41.

Elixir Securities, in its report, stated that Pakistan equities closed deep in the red with benchmark KSE-100 Index losing a record 1,900 points and settling down 4.1%.

“Domestic politics, as key members of premier’s family lined up to appear before the investigative panel in the corruption probe this week, is to blame where what started as a knee-jerk reaction to political noise recently turned into a full-blown hammering,” the report stated.

Meanwhile, lower-than-consensus inflation reading announced for the month of June also failed to bring any excitement in the market. All hundred companies represented in the  benchmark KSE-100 Index closed either in red or flat with more than half (56) of them closing at their respective lower price limits or falling by more than 4%.

Index-heavy Habib Bank (HBL PA -5%) led the declines, followed by United Bank Limited (UBL PA -5%), Lucky Cement (LUCK PA -5%), Oil & Gas Development Company (OGDC PA -5%) and MCB Bank (MCB PA -5%).



“[We] expect stocks to remain under pressure in the near term with investors eagerly waiting for any clarity on domestic politics,” the report added.

JS Global analyst Arhum Ghous said that a bloodbath was witnessed at the bourse on Monday, mainly driven by ongoing political situation.

“Commercial banks led the decline as sector heavyweights HBL (-5%), MCB (-5%) and UBL (-5%) all closed on their lower circuits, cumulatively taking away 376 points from the index,” said Ghous.

Cement sector also lost ground (-4.6%) with LUCK (-5%), KOHC (-5%) and DGKC (-5%) closing limit down.

“Moving forward, we recommend investors to stay side-lined and wait for clarity on the prevailing political situation,” he added.

Overall, trading volumes fell to 156 million shares compared with Friday’s tally of 235 million.

Shares of 359 companies were traded. At the end of the day, 21 stocks closed higher and 326 declined while 12 remained unchanged. The value of shares traded during the day was Rs8.8 billion.

Engro Polymer was the volume leader with 10.5 million shares, losing Rs1.82 to close at Rs34.68. It was followed by Maple Leaf with 9.5 million shares, losing Rs2.85 to close at Rs108.51 and Bank of Punjab (rights share) with 8.4 million shares, losing Rs0.02 to close at Rs0.02.

Foreign institutional investors were net buyers of Rs509 million during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, July 4^th, 2017.

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