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Stocks lose 2,237 points in jittery week

Updated August 11, 2019

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Bears continued to dominate the stock market during the outgoing week dragging the index down by 2,237 points (7.1 per cent) to close at 29,429.07 points, marking one of the largest week-on-week losses. — AFP/File
Bears continued to dominate the stock market during the outgoing week dragging the index down by 2,237 points (7.1 per cent) to close at 29,429.07 points, marking one of the largest week-on-week losses. — AFP/File

KARACHI: Bears continued to dominate the stock market during the outgoing week dragging the index down by 2,237 points (7.1 per cent) to close at 29,429.07 points, marking one of the largest week-on-week losses.

It was the fifth consecutive week of selling streak which pushed the index down to March 30, 2015 levels.

In the outgoing week, the rising tensions between India and Pakistan over the Kashmir issue dampened the investors’ sentiment who feared further escalation between the two nuclear neighbours in the coming weeks. The situation was further aggravated by remarks made by Army Spokesperson General Asif Ghafoor who vowed to retaliate stronger than before if India was to attempt any misadventure along the border.

Moreover, former finance minister Miftah Ismail’s arrest by the National Accountability Bureau in the LNG case fuelled uncertainty in the market. In addition, lower-than-expected corporate results also had the investors on the edge of their seats.

Further, International Monetary Fund Resident Chief Teresa Daban Sanchez’s said foreign financing dry up if Pakistan fails to get out of the Financial Action Task Force grey list.

She said the government faces five major risks to successful implementation of ongoing IMF programme including fiscal slippages, resistance from vested interests to implement reforms, lack of majority by the ruling party in the parliament, large amount of roll over debt and the looming inclusion in the FATF black list.

Foreign investors emerged as net sellers during the week offloading $0.9 million shares compared to $3.4m last week. Major selling was witnessed in commercial banks at $$4.5m and oil and gas exploration stocks at $0.2m. On the local front, major selling was reported by individuals at $10.9m followed by financials, who offloaded their positions by $3.5m.

The average trade volume improved significantly during the week rising by 26pc to 72m shares, whereas the average value traded also increased by a massive 44pc to $19m shares. The volume leaders included Maple Leaf Cement Factory averaging at 5.1m shares, K-Electric 4.2m, International Steels Ltd 3.1m, Unity Foods Ltd 2.8m and TRG Pakistan 2.7m.

Sector-wise, negative contributions were led by the commercial banks which dragged the index by 844 points, oil and gas exploration companies 529 points, power generation and distribution 221 points and fertiliser 182 points.

On the other hand, scrip-wise, the losses were led by United Bank Ltd losing 216 points, Oil and Gas Development Co. 195 points, Habib Bank Ltd 187 points, Pakistan Petroleum Ltd 176 points and Hub Power Company 163 points.

Going forward, experts believe that with the halt in trading on account og Eid holidays in the coming week, investors are likely to find some time to cool off. But the corporate results are expected to set the tone for the market in the coming week.

Moreover, experts also believe the market could take the turn for positive given the attractive valuations.

Published in Dawn, August 11th, 2019