KARACHI – Political committees failed to make any tangible progress on the economic reforms agenda and a further delay in announcement of PPP’s strategy to address pressure by PML-N has continued to hurt investor sentiment. Following yesterday’s $3.1 million outflow, foreign funds were rumoured sellers.
Local investors also remained bearish, as deteriorating internal and external political situation took its toll on the investors. The KSE-100 index, with a loss of 125.96 points, closed at 11523.42 points, while total volume and total value stood at 81,725,188 and 3,917,047,848 respectively. Lack of investor’s interest kept the benchmark under pressure, while activity remained limited as only 100 million shares were traded.
Top tier stocks, except HUBC, did not show progress. Chain reaction of the recent decline that may come in shape of defaults and margin calls is likely to have a deeper impact, incase existing issues on economic, financial and diplomatic fronts sustain alarming levels. Rise in government borrowings and a likely increase in local fuel prices will again make a case for a likely increase in local interest rate.
Its impact may be louder since it will carry the numbers deferred when status-quo stance was adopted during the previous MP statement. Caution therefore stays the call, strength in various stocks, facing heavy debt burden along with decline in local and export demand, on technical grounds should therefore be ignored even for short term trades while stocks from safer sectors, having consistent dividend yields, can be looked for, said Hasnain Asghar Ali at Aziz Fidahusien.
