Shares on PSX slide 421 points as HBL faces liability in US court for terror financing

Published September 29, 2022
<p>A snapshot of trading activity at the Pakistan Stock Exchange on Thursday. — Photo via PSX website</p>

A snapshot of trading activity at the Pakistan Stock Exchange on Thursday. — Photo via PSX website

Shares at the Pakistan Stock Exchange (PSX) closed in the red on Thursday, with analysts saying investor sentiment was weighed down by news of the country’s largest bank, Habib Bank Limited (HBL), facing secondary liabilities in a terror financing case in the United States.

The benchmark KSE-100 index closed at 41,013.86 points, down 421.27 points, or 1.02 per cent.

The index saw an intraday low of 524.31 points, or 1.26pc, around 2:30pm.

First National Equities Limited Director Amir Shehzad said the stock market was under pressure due to HBL-related news.

HBL’s shares lost Rs6.11 or 7.50pc.

A day earlier, a US judge said HBL faces secondary liabilities in a terror financing case in which the plaintiffs had alleged the bank aided and abetted al-Qaeda terrorism and joined in a conspiracy to launch attacks that killed or injured 370 people in Afghanistan between 2010 and 2019.

However, in a statement, HBL said the allegations were “meritless”, adding that the bank was contesting them fully and vigorously.

“The court stated secondary liabilities will be evaluated following due legal proceedings and no judgement was passed by the court on this matter,” it stated.

Shehzad also noted that it was a rollover week — when the future contracts are to be settled or rolled over to the next month — during which the PSX usually comes under selling pressure.

Besides, he added, there were “issues” on the political front. He advised investors to adopt a buy-on-dip strategy.

Former PSX director and AKY Securities CEO Ameen Yousuf also agreed with Shehzad’s view. “This is a rollover week and the news related to Habib Bank’s terror financing [case] is a bad indicator for the market. It appears that the market will remain [in the red] today and tomorrow unless there is a positive trigger,” he said.

Factors that would influence the market included new Finance Minister Ishaq Dar’s policies, the exchange rate and inflows. Even though the World Bank and other institutions had announced support, inflows had not been received yet, Yousuf said, adding that sentiments would improve once that happened.

Arif Habib Corporation Director Ahsan Mehanti said the index was bearish because of political noise, while investor concerns about flood-induced losses and a record surge in Pakistan dollar bond yields played the role of a catalyst.

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