KARACHI – KSE-100 index came under heavy selling pressure for the secondconsecutive week, where market reached to 27 months low level and wipingindex by another 4 percent losing Rs 361 billion in shape of marketcapitalization.
Mohammed Sohail, CEO Topline Securities said that the market fell 4 percentduring the preceding week taking two weeks losses to 9 percent, worsttwo-week performance in three years and six months.
Investor sentiment was shaken by reports that certain stocks are under riskof exclusion from MSCI’s EM index. This was in addition to alreadyuncertain economic outlook of the country, he said.
Amongst Pakistan stocks in the MSCI EM Index, Lucky and Habib Bank fell themost, declining by 11 percent and 8 percent respectively and cumulativelyeating away 316 points from the index. Resultantly, Commercial Banks andCements were the worst performing sectors during the week, cumulativelychipping away 595 points from the index, he explained.
Foreigners sold US$32.6 million (largest selling after 8 weeks) worth ofshares during the week versus net selling of US$8.4 million last week. Onlocal front, Companies, Insurance and Banks were net buyers amounting to US$22.8 million, US$6.5 million, and US$6.3 million, respectively.
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The country’s top decision makers finally conveyed their intentions toapproach the IMF for a bailout package, with the fund showing itswillingness to work on the finer details of a new program. Thisannouncement earlier in the week, let loose a large nosedive in Rupee valueagainst the Greenback which slightly recovered later in the week.
The FATF team conducting review on Pakistan’s progress on compliance withthe framework’s guidelines signaled that the country needs to do more workto be fully compliant and gain removal from the grey list in the nextreview, which hints at increased tightening on scrutiny of financialtransactions, hence negative ramifications for the economy.
