Uncertainty abroad, upheaval at home sends KSE-100 into ‘panic’ mode – Newspaper

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KARACHI: The equity market bled red on Monday on rising commodity prices and rising political temperatures after Prime Minister Imran Khan’s harsh speech criticizing the opposition as well as European leaders.

As a result, the KSE-100 index lost 1,284.38 points or 2.88% on a daily basis to close at 43,266.97 points.

Speaking to Dawn, Topline Securities CEO Mohammed Sohail said the less than 3% drop in the benchmark should be described as a ‘panic sell’ instead of a ‘bloodbath’. “.

“While domestic politics was one of two drivers behind the latest drop in stock values, I believe the main reason is rising global energy prices. The market will stabilize once normality returns to normal. the international oil market,” he said.

Brent crude hit $139.13 a barrel – the highest since July 2018 – before the start of trading on Monday.

The Russian-Ukrainian war has rocked the global energy market, with crude, coal and natural gas hitting multi-year highs.

Mr Sohail said investors’ concerns about Pakistan’s status as a preferred supplier of textile products to the European Union are also misplaced. ” It is too early to tell. They may be biased, but the Europeans are unlikely to act against Pakistan in such an ostensible way,” he said.

Ismail Iqbal Securities, head of research, Fahad Rauf, agreed with Mr. Sohail’s assertion that the fall in stock prices is mainly the result of rising global energy prices.

“The sale was expected today given the sudden rise in oil prices. It will either produce inflation or widen the budget deficit if the government chooses to subsidize petroleum products,” he said.

Trading volume increased by 75.7% to 236.9 million shares while traded value increased by 73.4% to $46.1 million on a daily basis.

The sectors that deducted the most points from the benchmark index were cement (235.18 points), commercial banking (222.09 points), technology and communication (159.14 points), fertilizer (97.76 points) and electricity production and distribution (91.28 points).

Stocks contributing significantly to trading volume included Hum Network Ltd (20.07 million shares), WorldCall Telecom Ltd (11.54 million shares), Flying Cement Ltd (11.43 million shares), TRG Pakistan Ltd (9.51 million shares) and TeleCard Ltd (9.02 million shares). ).

Stocks contributing positively to the index include National Foods Ltd (12.13 points), Adamjee Insurance Company Ltd (6.97 points), Dolmen City REIT (5.15 points), Pakistan Services Ltd (2.79 points) and HBL Growth Fund (2.45 points).

Lucky Cement Ltd (121.68 points), The Hub Power Company Ltd (79.01 points), TRG Pakistan Ltd (77.64 points), Systems Ltd (58.66 points) and Habib Bank Ltd (58.49 points) .

The stocks with the largest percentage declines on a daily basis were Yousaf Weaving Mills Ltd (12.01pc), Azgard Nine Ltd (7.6pc), The Searle Company Ltd (7.49pc), Cherat Cement Company Ltd (7.47 pc) and Unity Foods Ltd (7.47 pc).

Foreign investors remained net sellers as they sold shares worth $0.91 million.

NASIR JAMAL ADDS:

Some stock analysts saw Prime Minister Imran Khan’s speech, lashing out at EU countries and asking if they consider Islamabad their “slave”, as a major trigger for the market decline.

But according to Fahad Rauf, domestic political events affect investor sentiment, but only for a very brief period.

“We saw the PTI dharna in 2014 and the impact of the Panama Papers case [against former Prime Minister Nawaz Sharif] on the market. But fears of political volatility don’t last long, and market prices fluctuate on major events for only a few days. What drives the market up or down for long periods of time is economic fundamentals.

Posted in Dawn, March 8, 2022

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