KARACHI - Stocks continued to slide for the third consecutive day despite the fact that FATF rejected US-sponsored resolution regarding placing Pakistan on a watchlist of countries that financially aid terrorism. The negative sentiment was aggravated by selling seen in banks and concern on any unfavorable decision for UBL against non-compliance of anti-money laundering laws of US.
The benchmark 100-share index closed at 42,920 points, showing a decline of 375 points, dealers observed.
Market participants said the news of Pakistan being given a moratorium of 3 months by FATF (Financial Action Task Force) was evident before market opening, which resulted in a spike of 329 points, however, the market again went under pressure and saw erosion after a positive start. Political uncertainty, fear of retaliation by US (after setback from FATF inclusion) and poor results seems to have caused the dampening of sentiments. Mainly the market took negative bets on large cap banks (HBL & UBL) which have greater likelihood of imposition of penalty from DFS or impact of pension liability. Disclosure of contingent liability in UBL’s recently released financials, pertinent with scrutiny from Federal Reserve New York on account of anti-money laundering, caused panic among investors and the scrip saw selling pressure.
Top 10 index point decliners included UBL (down 4%), HBL (1.8%), ENGRO (2.7%), OGDC (1.9%), MCB (1.8%), LUCK (1.5%), PSO (2.2%), MLCF (4.5%), PPL (0.8%) & HUBC (down 1%), withholding 353 points from the index.
Sector-wise data showed commercial banks withheld 182 points from the index, oil & gas exploration (E&P) sector withheld 59 points whereas cement sector eroded 49 points from the index.
Volumes increased further from 167m shares Tuesday to 188m shares (up 11% DoD). Average daily traded value also increased from $70.2m to $76.7m (up 9% DoD).
