Business | Markets
Pakistani stocks plunge 4.43%
Pakistan's stocks ended more than four per cent lower on Monday as foreign investors offloaded shares after authorities decided to revert to five per cent daily limit on stock movements, dealers said.
- Reuters
- Published: 00:08 July 15, 2008
Karachi: Pakistan's stocks ended more than four per cent lower on Monday as foreign investors offloaded shares after authorities decided to revert to five per cent daily limit on stock movements, dealers said.
The Karachi Stock Exchange benchmark 100 share index ended 4.43 per cent, or 518.51 points, lower at 11,177.31. Volume was 49.4 million shares and losers led gainers 226 to 28.
The free-float KSE-30 share index shed 4.72 per cent to 12,772.39 points.
"The measures taken on Friday proved to be an exit strategy for foreign investors," said Asad Iqbal, managing director at Ismail Iqbal Securities Ltd.
The Securities and Exchange Commission and Karachi Stock Exchange decided on Friday to revert to a daily limit of five per cent up or down in share prices.
Last month, they amended the limits to one per cent down and 10 per cent up in an effort to support the market after it set a more than 15-month low on June 23. But investors said the limits hobbled trade and artificially propped up the market.
Stocks have been sliding since late April as investors worry about a fragile political situation and doubts about a new government's ability to handle widening trade and fiscal deficits and surging inflation.
The KSE-index has fallen 20.6 per cent since the beginning of the year and is 29 per cent lower since it made its life high on April 21.
But despite the cheaper prices, Iqbal said investors were still nervous. "Even though valuations may be attractive at these levels, because of the political and economic uncertainty, investors are apprehensive," he said.
Rate rise
The central bank raised interest rates to 12 per cent from 10.5 per cent in May which also added pressure to the stock market. Dealers are expecting another increase in the next scheduled meeting before July 31.
However, the rupee ended firmer at 69.50/60 yesterday as sentiment improved slightly after the introduction of stabilisation measures last week and on rumours the government may curb imports, dealers said.
The central bank last week took measures to stabilise the rupee after it set its weakest ever closing level at 72.85/90 on July 8.
Among the most active companies, volume leader NIB Bank fell 8.7 per cent to Rs9.69, Oil and Gas Development Co shed five per cent to Rs110.45, while Arif Habib Securities was four per cent lower at Rs143.49.
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