Business

KSE-100 Index plunges by 1,000 points over anti-corruption crackdown fears

Shajar Capital Investment Analyst says there is uncertainty in the market due to a volatile political situation

Afp/kazim Alam September 07, 2015

PHOTO: AFP

In line with most Asian stocks, the benchmark index of the Karachi Stock Exchange (KSE) plunged by over 1,000 points in intraday trading on Monday.

The KSE-100 Index stood at 32,965 points at 1pm after registering a decline of 2.73% since the beginning of trading at 9:30am.

Speaking to The Express Tribune, Shajar Capital Investment Analyst Hamza Kamal said a complete absence of triggers to drive the market has caused selling on the Karachi bourse.

"Today the rumours about the potential arrests of stock (market)-related people intensified the panic," said Mohammad Sohail, an analyst and the chief of Topline Securities, according to AFP.

Read: Weekly review: Volatile week ends with KSE-100 down 556 points

Authorities have in recent months embarked on an anti-corruption drive, with former prime minister Yousuf Raza Gilani, who held office from 2008-2012, facing 24 graft charges.

Further, former petroleum minister Asim Hussain, a close aide to ex-president Asif Ali Zardari, was also remanded into the custody of Pakistan's Rangers paramilitary force over another corruption case.

Officials of the state-run Sui Southern Gas Company, one of the exchange's blue chips, were also being questioned by anti-corruption officials.

According to an equity trader working for another Karachi-based brokerage house, individual investors have been selling shares on the KSE after most Asian stock markets experienced a bearish trend on Monday.

“Individual investors are panicking and have trimmed their positions,” he said.

Prices of as many as 276 stocks have declined while those of 23 stocks have appreciated since morning, KSE data shows.

Read: Market watch: Probe into broker affairs sparks selling on bourse

So far, 178 million shares have been traded on the bourse with the exchange value of Rs9.6 billion.

The KSE-100 Index shrank by 1.6% last week amid reports that the bearish trend in the market was partly because a few brokers had received notices from regulators over non-compliance of client segregation regulations.

COMMENTS (6)

raza mahmood | 9 years ago | Reply the stock exchange buisness in Pakistan is like a tom and Jerry show where the tom investors most often received heavy battering from jerry the brokerage mafia

Maaz | 9 years ago | Reply Economic terrorism wave is gonna sweep every corrupt individual or institution whether its money exchanges, brokers, banks or mutual funds. Remember 2005 report of Dr Hassan of SECP and thereafter an independent report from digilence.

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Mustafa | 9 years ago | Reply Uncertainty! Our stock market is volatile, the returns on leaving your money with the banks are almost negative, manufacturing is NIL leaving our exports to a standstill. Where should the local investors go? There is hardly any investment option.

Parvez | 9 years ago | Reply When the market was way UP our PM and his munshi touted this as a clear indicator of his government's policies and the strength of the economy.....and now what do they have to say ?

Waqas Sheikh | 9 years ago | Reply The macro-level indicators such as falling exports, low tax collection, rising debt service cost and overall slowdown of economies around the world do not paint a rosy picture for KSE in the near future.

Asad | 9 years ago | Reply KSE-100 index started to fall since the fall of China's economic growth rate and fall in their stock market. Things are not looking good in the future as well for the Pakistani Market.

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