Market watch: Bears return as Pakistan placed on enhanced monitoring list

Benchmark index drops 534.43 points to settle at 31,350.02

KARACHI: Investor sentiment on Friday took a hit at the bourse following four days of bullish momentum as the benchmark KSE-100 index dived 534 points in the wake of placing of Pakistan on the Asia-Pacific Group's (APG) enhanced monitoring list.

The action was taken after the APG found Islamabad's performance unsatisfactory on three-fourths of the Financial Action Task Force's (FATF) recommendations, which sparked panic selling at the Pakistan Stock Exchange.

The first session began on a positive note as the KSE-100 index made handsome gains and crossed the 32,000-point mark for a brief period. However, selling pressure soon emerged and the first session ended with a loss.

The second trading session raised hopes by opening in the positive zone but again investor sentiment was dented, pushing the index to close the week on a negative note.

At close, the benchmark KSE 100-share Index recorded a decrease of 534.43 points, or 1.68%, to settle at 31,350.02 points.

JS Global analyst Maaz Mulla said equities turned negative after a brief rally with the benchmark KSE-100 index shedding 534 points and closing at 31,350.

"The bourse came under pressure after the international media suggested that the FATF's Asia-Pacific Group has put Pakistan on the blacklist due to many shortcomings in efforts to combat terrorism and money laundering," he said.

Hubco (-4.2%), HBL (-2.5%), Pakistan Petroleum (-3.1%), Fauji Fertiliser (-3%), UBL (-2.6%), Oil and Gas Development Company (-1.5%), Lucky Cement (-2%), MCB Bank (-1.3%) and Pakistan Oilfields (-1.7%) were the major laggards that contributed significantly to the negative close.

Traded value stood at $46 million, down 5% and volumes came in at 231 million shares, down 12%. Major contribution to the total market volume came from Unity Foods (-1.6%), Maple Leaf Cement (-1.6%), Pak Elektron (+1.8%) and WorldCall Telecom (+11%).

"Moving ahead, we expect the market to remain negative until further clarity on the FATF front," the analyst added.

Overall, trading volumes decreased to 230.7 million shares compared with Thursday's tally of 261.7 million. The value of shares traded during the day was Rs7.2 billion.

Shares of 358 companies were traded. At the end of the day, 130 stocks closed higher, 213 declined and 15 remained unchanged.

Unity Foods was the volume leader with 18.9 million shares, losing Rs0.15 to close at Rs9.33. It was followed by Maple Leaf Cement with 16.9 million shares, losing Rs0.33 to close at Rs19.97 and Pak Elektron with 15.9 million shares, gaining Rs0.3 to close at Rs17.18.

Foreign institutional investors were net buyers of Rs121.7 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.