KARACHI:- Pakistan equities reached two months low mark following political happenings on back of JIT appeared related to fake accounts where billions of rupees were laundered sending negative vibes to investors who foresees further crackdown in share price week ahead.
Weak sentiments were witnessed during the week on account of re-emergence of political noise. During the week, the accountability court announced its verdict against Former Prime Minister Nawaz Sharif’s Al Azizia reference case thereby imposing a hefty fine and seven years imprisonment.
Moreover, in the latest development in Fake Accounts case, senior leadership (including former-President Asif Ali Zardari) of Pakistan People’s Party (PPP) was placed on the Exit Control List (ECL).
The index continued its downward trend as the index lost 1,084 points or -2.83 percent, closing at 37,167 points. Investors were left dejected due to several factors this week, including a US$591mn decline in the SBP’s foreign exchange reserves, strong political tension in the country and weak macro indicators.
Foreigners’ selling for the week was $1.1 million as compared with $12.2 million in the previous week. This was their 34th week of consecutive selling. Among local investors’, mutual funds were also net sellers of $6.2 million, while Banks and Individuals were net buyers of $7.5 million, cumulatively.
During the week, Brent Crude declined by 3 percent on week on week basis to trade at $52/bbl. There has been extreme volatility and commodity depicted during the week dipping below $50/bbl at one point). The decline came on the back of ongoing turmoil in global markets. As a result, domestic Exploration and Production (E&P) stocks were down during most part of the week – Oil and Gas Development Company (OGDC), Pakistan Petroleum (PPL), Mari Petroleum (MARI) and Pakistan Oilfields (POL) declined by 4.4 percent, 4.1 percent, 4.8 percent and -3.4 percent on weekly basis respectively while the sector was down 4.3 percent, contributing 231 points to the overall decline in KSE100 Index.
An analyst from Habib Metro Finance said that the upcoming hearing of the Fake Accounts scandal on Monday can unveil even more strain on the political front with widespread rumors of even further tumult on the political front. “We expect the index to stay under pressure in the near term, which warrants a cautious stance alongside ample liquidity to hunt for bargains at lower levels,” he added.