KARACHI - KSE-100 index came under heavy selling pressure for the second consecutive week, where market reached to 27 months low level and wiping index by another 4 percent losing Rs 361 billion in shape of market capitalization.
Mohammed Sohail, CEO Topline Securities said that the market fell 4 percent during the preceding week taking two weeks losses to 9 percent, worst two-week performance in three years and six months.
Investor sentiment was shaken by reports that certain stocks are under risk of exclusion from MSCI’s EM index. This was in addition to already uncertain economic outlook of the country, he said.
Amongst Pakistan stocks in the MSCI EM Index, Lucky and Habib Bank fell the most, declining by 11 percent and 8 percent respectively and cumulatively eating away 316 points from the index. Resultantly, Commercial Banks and Cements were the worst performing sectors during the week, cumulatively chipping away 595 points from the index, he explained.
Foreigners sold US$32.6 million (largest selling after 8 weeks) worth of shares during the week versus net selling of US$8.4 million last week. On local front, Companies, Insurance and Banks were net buyers amounting to US $22.8 million, US$6.5 million, and US$6.3 million, respectively.
The country’s top decision makers finally conveyed their intentions to approach the IMF for a bailout package, with the fund showing its willingness to work on the finer details of a new program. This announcement earlier in the week, let loose a large nosedive in Rupee value against the Greenback which slightly recovered later in the week.
The FATF team conducting review on Pakistan’s progress on compliance with the framework’s guidelines signaled that the country needs to do more work to be fully compliant and gain removal from the grey list in the next review, which hints at increased tightening on scrutiny of financial transactions, hence negative ramifications for the economy.