KARACHI – Panic selling in high-priced blue chip scrips let the bears prevail at the Karachi Stock Exchange (KSE) on Friday that saw the political and strategic situation dog local and international share traders. The investors’ fear of foreign selling led to panic selling at the KSE owing to disturbing developments like a destabilising political backlash after the controversial release of American spy Raymond Davis and Thursday’s drone attack on a Pakistani tribal Jirga and a rare but strong diplomatic reaction by the armed and civilian leadership of Pakistan.
The situation is likely to aggravate as Pakistan’s Foreign Office, reportedly on Friday, not only summoned the US ambassador in Pakistan to lodge a formal protest against the deadly drone attack inside Pakistani territory, but also refused to attend the forthcoming trilateral dialogue with the US and Afghanistan scheduled to be held in Brussels on the 26th of this month in protest of Thursday’s aerial bombing that killed at least 41 civilians, mostly tribal Jirga elders, in North Waziristan.
On last trading day of the week, the KSE-100 index lost 251.66 points or 2.12 percent to close at 11,606.61 points against 11,858.27 points of the previous day.
“Bearish activity witnessed in scrips across the board on the investors’ fears on foreign selling after the protests called today by politicians over the release of US spy,” Ahsan Mehanti of Arif Habib Investments opined. He said panic selling was witnessed in blue chip scrips after Pakistan’s Foreign Office summoned the US ambassador and Chief of Army Staff General Asfaque Pervez Kayani termed the American strike on tribal elders in Datta Khel as violation of human rights. This, the analyst said, said was “despite a favorable current account balance reported for the first eight months of the (current) fiscal year and strong recovery in the global capital and commodity markets.”
The day witnessed the intraday high and low, respectively, at 11,896.27 and 1,593.56 points, while turnover at the ready-counter was recorded at 125.13 million, up by 8.1 million shares against Thursday’s 117.023 million. Market capitalisation remained down by Rs 64 billion at Rs 3.111 trillion as compared to Rs 3.175 trillion a day earlier. Lotte Pakistan PTAXD topped the list of volume leaders by marking a share trading of 39.157 million and making a 0.22-paisa per share gain closing at Rs 15.75. Other volume leaders included PTCL, Nishat (Chunian), National Bank of Pakistan, Nishat Mills Limited, Engro Corporation, Arif Habib Corporation, Azgard Nine, Fatima Fertiliser and Fauji Fertiliser Company with a respective turnover of 9.4 million, 7.7 million, 5.7 million, 5.1 million, 3.9 million, 3.8 million, 3.6 million, 3.3 million and 2.9 million shares.
The future market also remained downward to close at 5.56 million shares against the previous 6.75 million, exhibiting a decline of 1.18 million shares over the previous day. Other market analysts like Hasnain Asghar Ali of Aziz Fidahusein and Company opined that on Friday high-priced stocks mounted pressure on the KSE-100 benchmark.
“Political up-rise over the release of US national, likely fall-out of the recent increase in existing taxes and withdrawal of various exemptions and its impact on inflationary numbers for the upcoming months… kept the benchmark in deep red zone throughout the session.” He said.
Other factors that downed the index, the analyst said, included sell-off in the high-priced stocks, through offshore channels and by some local corporate participants, and the worsening situation in Arab countries. He said local participants from both retail and corporate circuits were cautious accumulators in various mid-tier stocks along with dividend yielding stocks on discounts. “Likely future roll-over pressure next week, however, kept follow-up support lacking on strength,” he added.
