PSX falls 2.5pc as banks tumble on money laundering probe

KARACHI: Bloodbath continued at the capital market on Monday as the benchmark KSE-100 index plummeted by 2.5 percent, hitting almost seven-month lows on reports related to involvement of some banks in money laundering and discovery of billions of rupees in more than two dozen fake accounts, dealers said.

Zeeshan Afzal, head of research at Insight Securities said, “All hell broke loose as KSE-100 index slumped by massive 995 points on concerns over deteriorating macros with escalating twin deficit leading to depleting foreign exchange reserves and rupee devaluations.”

The local mutual funds and foreign financial institutions were key sellers due to the unclear political outlook and weakening economy.

“Cements continued free-fall with uptick in global coal prices, weak cement demand with upcoming supply glut leading concerns. Most of the blue-chip shares remained under-pressure with banks faring some interest at lower levels,” he added.

The market since its high of 52,876 points attained on May 24, 2017 has lost more than 13,588 points or 26 percent, whereas market capitalisation suffered a fall of nearly Rs2.265 trillion to Rs8.181 trillion.

Pakistan Stock Exchange (PSX) KSE-100 shares index shed 2.47 percent or 995.66 points to close at 39,288.48 points. KSE-30 shares index shed 2.62 percent or 518.67 points to finish at 19,254.89 points.

Of 334 active scrips, 30 advanced, 286 declined, and 18 remained unchanged. The ready market volumes stood at 123.582 billion shares compared to a turnover of 103.893 billion shares in the previous session. Analyst Ahsan Mehanti from Arif Habib Corporation said panic selling was witnessed at the stock exchange amid pressure in scrips across the board on concerns for ongoing political noise and foreign selling after court verdict against the former prime minister in NAB references.

“Reports on likely International Monetary Fund (IMF) bailout post general elections to resolve external account crises, economic and pre-election uncertainty played a catalytic role in the bearish close,” Mehanti added.

Last time the KSE-100 was seen at a lower level was on December 19, 2017, when the index hit 37,919.42 points. “With this fall, the index has hit more than six months low, and has room for

more downward trend owing to financial scam reported on the weekend where big names of high net worth individuals and some of the banks appeared, resulting in nervousness,” a leading trader said.

The highest gainers were Sapphire Textile, up Rs18.63 to close at Rs1,000.00/share, and Atlas Battery, up Rs16.12 to finish at Rs424.15/share. Companies that booked highest losses were Indus Motor Company, down Rs59.34 to close at Rs1276.35/share, and Pakistan Tobacco, down Rs52.50 to close at Rs2,200.00/share.

Standard Chartered Bank recorded the highest volumes with a turnover of 1,000 shares. The banks scrip gained Rs0.79 to close at Rs23.79/share. The lowest volumes were witnessed in K-Electric Limited, recording a turnover of 11.927 million shares and losing 3 paisas to end at Rs5.28/share.