KARACHI: Politics took a heavy toll on the equity market on Tuesday as the dollar-based value of all listed shares dropped to a 12-year low.

Market capitalisation in dollars declined nearly five per cent on a day-on-day basis to $30.7 billion — lowest since June 2010 — on account of “rising political and economic problems,” according to Topline Securities.

Investors continued their overnight selling momentum across the board owing to the unrest on the political front and the devaluation of the rupee, which reached historic lows in the interbank and open markets, said Arif Habib Ltd.

As a result, the KSE-100 index settled at 40,389.07 points, down 978.04 points or 2.36pc from a day ago. The index shed 708 points in the week’s first trading session on Monday.

The trading volume increased 28.8pc to 194.9 million shares while the traded value went up 32.7pc to $26.1m on a day-on-day basis.

Speaking to Dawn, JS Global AVP Mubashir Anis said the primary reason for the fall in share prices is growing political uncertainty. “Investors are getting jittery about political developments derailing the International Monetary Fund (IMF) loan programme and other multilateral flows expected to materialise afterwards.”

He insisted that the fundamentals of listed companies remain strong. Some import-dependent businesses may be more exposed to sudden movements in the exchange rate, but that doesn’t justify the broad-based selling in the stock market, he added.

Mr Anis said the market requires clarity on the IMF programme and the overall macro landscape to calm the jitters and unlock the attractive valuations.

Stocks contributing significantly to the traded volume included K-Electric Ltd (19.62m shares), WorldCall Telecom Ltd (17.67m sha­res), Cnergyico PK Ltd (9.96m shares), Cordoba Logistics and Ventures Ltd (7.94m shares) and Unity Foods Ltd (7.47m shares).

Sectors that took away the highest number of points from the benchmark index included commercial banking (236.12 points), oil and gas exploration (139.97 points), fertiliser (131.05 points), cement (99.93 points) and power generation and distribution (57.26 points).

Shares contributing most negatively to the index included Meezan Bank Ltd (60.73 points), Engro Corporation Ltd (58.11 points), the Hub Power Company Ltd (56.44 points), Pakistan Petroleum Ltd (47.81 points) and Habib Bank Ltd (43.47 points).

Stocks that contributed most positively to the index included Packages Ltd (3.55 points), Nestle Pakistan Ltd (2.14 points), Abbott Laboratories Pakistan Ltd (1.99 points), Kot Addu Power Company Ltd (1.27 points) and First Habib Modaraba (0.82 points).

Foreign investors were net buyers as they purcha­sed shares worth $1.26m. On the local front, mutual funds and insurance companies sold shares worth $3.17m and $1.39m, respectively.

Published in Dawn, July 20th, 2022

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