Qalandari
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KARACHI:
Carnage was one word to sum up the performance of the stock market as panic-struck investors offloaded their investments, resulting in the benchmark KSE-100 index plummeting 1,842 points (5.8%) to close at 29,957 during the week ended March 27.
It was the KSE-100’s worst single-week performance since July 2011 as the index fell for four successive days in a shortened week due to the Pakistan Day holiday. The dreadful performance came despite a series of positive news flows, which would have, otherwise, provided a boost to the market.
It was somewhat of a sign of things to come that the KSE-100 index fell below the crucial 30,000 point barrier on Friday. The sell-off was witnessed across the board with the market failing to react to the discount rate cut, an improved credit rating by Moody’s and a sudden spike in global oil prices.
Local institutional and individual selling was the biggest cause of the decline as investors resorted to panic selling in light of continued foreign selling, especially after the announcement of a leading foreign hedge fund winding up its investments in emerging markets.
Foreigners, too, contributed to the market’s ill fortune as they continued to offload their positions at the bourse. Foreigners sold a net of $15 million worth of equity during the week, bringing the monthly total outflow to $72 million.
The State Bank of Pakistan’s (SBP) decision to cut the discount rate by 50 basis points over the weekend failed to have any positive impact on the bourse as the KSE-100 index opened the week with a sharp decline. The SBP’s latest discount rate cut has brought down the rate to 8% from 10% in November 2014.
During the week, Moody’s announced that it was improving Pakistan’s rating from a stable to a positive outlook, but investors paid no heed to the announcement as the market continued to plummet downwards. Moody’s also downgraded the rating of Pakistani banks, which had a negative impact on the banking sector.
The oil and gas sector also failed to benefit from the sudden spike in oil prices after Saudi Arabia launched a military operation against Yemen. The sector, however, did manage to outperform the broader market and also received a boost from the OGDC’s discovery of oil at the Palli field.
Weekly review: KSE-100 plummets 1,842 points as investors panic - The Express Tribune
Carnage was one word to sum up the performance of the stock market as panic-struck investors offloaded their investments, resulting in the benchmark KSE-100 index plummeting 1,842 points (5.8%) to close at 29,957 during the week ended March 27.
It was the KSE-100’s worst single-week performance since July 2011 as the index fell for four successive days in a shortened week due to the Pakistan Day holiday. The dreadful performance came despite a series of positive news flows, which would have, otherwise, provided a boost to the market.
It was somewhat of a sign of things to come that the KSE-100 index fell below the crucial 30,000 point barrier on Friday. The sell-off was witnessed across the board with the market failing to react to the discount rate cut, an improved credit rating by Moody’s and a sudden spike in global oil prices.
Local institutional and individual selling was the biggest cause of the decline as investors resorted to panic selling in light of continued foreign selling, especially after the announcement of a leading foreign hedge fund winding up its investments in emerging markets.
Foreigners, too, contributed to the market’s ill fortune as they continued to offload their positions at the bourse. Foreigners sold a net of $15 million worth of equity during the week, bringing the monthly total outflow to $72 million.
The State Bank of Pakistan’s (SBP) decision to cut the discount rate by 50 basis points over the weekend failed to have any positive impact on the bourse as the KSE-100 index opened the week with a sharp decline. The SBP’s latest discount rate cut has brought down the rate to 8% from 10% in November 2014.
During the week, Moody’s announced that it was improving Pakistan’s rating from a stable to a positive outlook, but investors paid no heed to the announcement as the market continued to plummet downwards. Moody’s also downgraded the rating of Pakistani banks, which had a negative impact on the banking sector.
The oil and gas sector also failed to benefit from the sudden spike in oil prices after Saudi Arabia launched a military operation against Yemen. The sector, however, did manage to outperform the broader market and also received a boost from the OGDC’s discovery of oil at the Palli field.
Weekly review: KSE-100 plummets 1,842 points as investors panic - The Express Tribune
