KSE-100 endures worst month in seven years

Benchmark index plunges 10.4% in August, sheds 3.4% week-on-week

KARACHI: It was a devastating week for the stock market as the index continued to slide for the fourth consecutive week, shedding 1,435 points (3.4%) week-on-week, due to political and economic uncertainties that took a toll on the market.

The deteriorating external account, increasing tensions between Pakistan and the US, news of New York regulator seeking to impose a penalty of up to $630 million on Habib Bank Limited (HBL) and planned secondary public offering of Mari Petroleum added to the investors’ woes.

These factors kept the already anxious market under pressure, resulting in its worst month since May 2010 and worst August performance since 2008. The KSE-100 suffered the biggest monthly decline in seven years, down 10.4% to settle at 41,207, the lowest level of 2017.



The week kicked off on a bearish note as Habib Bank and Mari Petroleum dragged the index down due to potential imposition of a fine by the US regulator and plans for the secondary public offering.

The downward trend continued as Tuesday witnessed another session in the red with the index plunging 740 points.

However, Wednesday brought a change in the trajectory and pushed the KSE-100 into the green zone. Sadly, the recovery was short-lived as stocks once again tumbled into the red on Thursday.

Overall activity also remained substantially low as investors remained side-lined because of devastating rains in Karachi, Hajj pilgrimage and four-day-long Eid weekend.

Average daily trading volumes and value slumped 39% and 38% to 109 million shares and $57 million, respectively. Meanwhile, Thursday’s turnover of 70.5 million shares was a three-year low as the metropolis faced transportation difficulties due to heavy downpour.

Banks remained the worst performing sector, down 6% week-on-week, followed by exploration and production companies (down 5%) as news of Mari divestment and 4% decline in international oil prices dampened sentiments. On the other hand, tobacco (up 2%) and food (up 1%) stood out as gainers.

Individually, HBL led the decline for obvious reasons, tanking the index down by 588 points during the week.

Negotiated off-market deals for HBL were executed at as low as Rs155 per share, a 30% discount to pre-fine levels. A 13% discount between HBL’s market price and deal price guarantees that next week won’t be any better.

United Bank (UBL), Mari Petroleum, Engro Corporation and Oil and Gas Development Company caused declines of 124 points, 110 points, 74 points and 73 points, respectively, in the KSE-100 index.

Most of the selling was led by foreigners with net selling of $14.2 million during the week. However, this was absorbed by local financial institutions such as banks with net buying of $5.2 million and investment companies with buying of $13.5 million in search of value stocks amidst the chaos.

Apart from this, key highlights during the week were that Pakistan’s population soared to 208 million in the latest census, $400 million smart meter project faced a two-year delay as complexities took over, rains disrupted cotton harvest in Sindh with heavy downpour likely to hit other crops as well, ECC rejected increase in oil marketing companies’ margins, subsidy to fertiliser sector remained unpaid and Malaysian firm Axiata were buying telecom towers firm in Pakistan for $940 million.

Winners of the week

Standard Chartered Bank



Standard Chartered Bank Pakistan Limited is an international bank that provides consumer and wholesale banking services.

Ibrahim Fibres



Ibrahim Fibres Limited, a part of the Ibrahim Group, operates a polyester staple fibre manufacturing plant. The company manufactures a wide range of polyester staple fibre and it also manufactures a variety of blended as well as pure synthetic yarns. Ibrahim Fibres Ltd also owns an in-house power generation plant.



Philip Morris (Pak)



Philip Morris Pakistan Limited manufactures and sells tobacco and cigarettes.

Losers of the week

Habib Bank



Habib Bank Ltd operates a commercial bank in Pakistan. The bank offers commercial, corporate, investment, retail and International Group Banking.

Mari Petroleum



Mari Petroleum is a fully integrated exploration and production company of Pakistan, currently managing and operating the country’s largest gas reservoir (in terms of current reserves) at Mari Field, District Ghotki, Sindh.

Ferozsons Laboratories



Ferozsons Laboratories Ltd manufactures and sells pharmaceutical products.

Published in The Express Tribune, September 2^nd, 2017.

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