KARACHI: Stocks tumbled on the last day of the rollover week with the KSE-100 index recording a sharp decline by 359 points, or 0.75 per cent, to close at 47,603.
Traders said that the overnight intimation by the MSCI of its consideration of the proposal for possible downgrade of Pakistan to Frontier Market (FM) from Emerging Market (EM) came as a blow to investors. There was not a hint of the MSCI intentions since the last quarterly review; MSCI had upgraded certain Pakistani stocks including Lucky Cement to Standard Index and the technology stock, TRG to Small Cap Index.
Investors started to dump stocks as they were already seized with the fear of fast spreading rumour that Pakistan would not be left off the hook of grey list by the FATF; the decision was expected later in the afternoon. Stocks fell like nine-pins across the board with huge falls recorded in banks (114 points), cement (101 points), E&P (63 points), pharma (40 points) and investment banks (28 points).
Among scrips, the three constituents of the MSCI EM were hammered; Lucky Cement, HBL and MCB Bank lost value which weighed down on the index by 124 points. UBL (36 points), PPL (20 points) and Dawood Hercules (19 points) were other major laggards. Stocks that sailed against the wind and gathered values included PSEL (29 points), FCEPL (14 points), Systems Ltd (12 points), ANL (7 points) and Hubco (7 points).
Analyst Ahsan Mehanti commented that the institutional support remained on higher global crude oil prices and rupee stability. The Senate approval to the government’s imposition of 10pc power surcharge on industrial power tariff and reports of $632m current account deficit in May played catalyst role in bearish close.
The trading volume was up 19pc over the previous day to 761.3m shares while the traded value jumped by 32pc to reach $138.0m as brisk business was seen in high-valued scrips following the MSCI proposal. WTL, BYCO, PACE, TPL and KEL contributed 39pc to the total turnover.
Published in Dawn, June 26th, 2021
