Stocks posted the highest weekly loss of the year 2018 in the week ended May 18, 2018, as cagey investors continued to hedge their bets amid shaky economic outlook and a groundswell of anxiety over a fast unfolding political crisis casting doubts on the interim setup and upcoming general elections.
Topline Securities in a report said lower investor participation was due to absence of any positive triggers.
“The benchmark index lost 4.5 percent in the week and closed at 41,624 points level as the country’s foreign reserves’ erosion continues while political noise is growing louder and louder,” the brokerage said.
The brokerage added that traded value during the week went down 22 percent, while trading volume declined 31 percent.
Topline further said the key events to track going forward will be official announcement of general election date, inflows of foreign currency in Pakistan, and announcement of interim prime minister.
Analysts at BMA Capital Management said dust on the recent statement by former Prime Minister Nawaz appeared to have settled down; however further development on the issue remained to be seen and would be keenly tracked by the investors.
Analyst said activity was expected to remain lackluster in the coming week where key triggers would be an announcement of caretaker setup, interim prime minister, and monetary policy review.
The capital market suffered heavy losses for the past three weeks and witnessed a wipeout of nearly Rs720 billion in the shape of market capitalization, while index recorded a fall of 3918 points because of the rising temperature on the political front and depressing macro-economic numbers.
During the first week of this month the index lost nearly 1000 points, second week saw a fall of 942 points and the outgoing week witnessed a bloodbath where index lost nearly 1971 points.
Foreign selling in commercial banks kept the whole sector under pressure during the week and eroded 346 points from the index, where Habib Bank lost 4.5 percent, United Bank shed 5 percent, while MCB was down 1 percent.
Foreigners, offloading equities worth $20 million, were net sellers during the week compared to $4.1 million last week.
Amongst local investors mutual funds emerged as net sellers with $16.8 million worth of shares sold, whereas banks were net buyers of shares worth $20.2 million.
An analyst from JS group said the market remained in shambles for the third consecutive week in a row with benchmark KSE-100 index splashing red on the screen in all trading sessions.
On the macroeconomic front, cracks continued to widen further with recent numbers showing a persistent downward spiral in foreign exchange reserves, while external debt statistics presented an alarmingly high debt-to-GDP-ratio of 64.1 percent by end March 2018.
