Market watch: Investors resort to panic selling, KSE-100 ends 261 points lower

Media reports citing Pakistan being placed on terror financing watch list reason for selling pressure

Our Correspondent February 23, 2018

KARACHI: The KSE-100 Index ended lower after a knee-jerk reaction to media reports that Pakistan was placed on the grey-list by the Financial Action Task Force (FATF), with the benchmark plunging over 500 points in intra-day trading right as the afternoon session began.

While an official statement was awaited, reports citing that the global watchdog has placed Pakistan back on its terror financing watch list took toll on investors who resorted to panic selling.

After a 100-point gain until the mid-session interval, the index plunged over 1.1%, hitting a low of 43,100 before value buying and cherry-picking brought back investors to the fold.

At close, the benchmark ended with a decrease of 261.31 points or 0.6%, settling at 43,267.2.

JS Research analyst Danish Ladhani said equities closed negative with benchmark KSE-100 index settling at 43,267, down 0.6%.

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"The market kicked off positively, up 269 points, as the Saudis announced to join Turkey and China to block US-led motion to put Pakistan on terror-financing watch list. However, the market retreated over the news released by an international news agency that the global money-laundering watchdog has placed Pakistan back on its terrorist financing watchlist pushing the market down to an intraday low of 514 points," Ladhani said.

"Moreover, the country's total liquid foreign exchange reserves fell by $139.4 million owing to external debt payments. Major heavyweights namely, HBL (-0.06%), OGDC (-0.63%), UBL (-0.59%), PPL (-1.45%), ENGRO (-0.07%) and LUCK (-0.41%) dragged the market down by 65 points.

"Traded volumes surged by 28% day-on-day to 244 million shares while value traded increased to $91 million. Top volume stocks were DSL (-1.56%), ANL (+0.23%), TRG (-3.42%), LOTCHEM (-3.44%) and BOP (-2.24%).

"GHNL (+5%) in the auto sector closed at its upper circuit as the company is likely to resume Datsun car production as the Board of Investment (BoI) and Engineering Development Board (EDB) agreed to treat the company's plan as a Brownfield investment.

"PAEL (-5%) closed limit down as the World Bank announced the debarment of the company for 33 months in connection with collusive practices during bidding on contracts under the World Bank-financed Electricity Distribution and Transmission Improvement Project in Pakistan.

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"Moving forward, we expect the market to closely monitor the final decision on FATF," Ladhani added.

Overall, trading volumes rose to 244 million shares compared with Thursday's tally of 190 million.

Shares of 366 companies were traded. At the end of the day, 95 stocks closed higher, 246 declined while 25 remained unchanged. The value of shares traded during the day was Rs10.07 billion.

Dost Steel was the volume leader with 27.5 million shares, followed by Azgard Nine (15.6 million) and TRG (14.7 million). A total of 244.5 million shares were traded on the all-share index. The value of shares traded during the day was Rs10.1 billion.

Foreign institutional investors were net buyers of Rs104 million during the trading session, according to data compiled by the National Clearing Company of Pakistan.


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