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February 25, 2020

Stocks battered as spread of coronavirus in region sparks panic

Business

February 25, 2020

Stocks plunged almost 3 percent on Monday, in line with global markets, as investors unnerved on growth outlook following a surge in coronavirus cases outside China, dealers said.

“Report of coronavirus cases in neighboring Iran increased investor`s concern multifold, as they fear that the rampant virus might reach Pakistan if precautions are not taken,” brokerage Topline Securties said in a post market note.

“FATF`s decision to keep Pakistan in grey list till its next review in June 2020 and decline in international oil prices didn’t offer much support to the declining market.”

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 2.82 percent or 1,105.49 points to close at 39,143.73 points level. KSE-30 shares index followed suit with a low of 3.03 percent or 546.41 points to end at 18,051.56 points level.

Of 336 active scrips, 48 moved up, 271 retreated, and 17 remained unchanged. The ready market volumes stood at 144.282 million shares, as compared with the turnover of 85.597 million shares in the previous session.

Analyst Ahsan Mehanti from Arif Habib Corporations said Pakistan stocks fell to record lows on investor concerns amid global equity selloff over outcome of coronavirus outbreak.”

However, volumetric activity improved compared to last week. Samiullah Tariq, director research at Arif Habib said the spreading of virus in some of the new countries like South Korea and Iran, with Asian markets ending on a negative note and European stock market plunging, alarm bells were raised in the domestic market as well.”

“Decrease in informal trade with Iran, from where several goods arrived to fill the commodities gap, might ignite price hike, which also led to some panic,” he explained.

Some analysts said the domestic market overreacted, as the virus threat in China had subsided a little, with the number of recoveries higher than those who were falling sick now.

Salman Ahmad, head of institutional sales at Aba Ali Habib said the reports that the virus has entered several other countries, including Iran shocked investors, “but it was an overreaction from the market men, because in China, the government has taken measures and controlled it”.

“However, reporting in other countries, especially in Iran was taken as a setback.” The market was also down because of the rollover week, but much was due to the new coronavirus, or nCovid-19 as per the WHO, which would further slow down economic activity, scaling down shipments from Asian countries, he added.

The highest gainers were Nestle Pakistan, up Rs375.00 close at Rs7,800.00/share, and Rafhan Maize, up Rs300.00 to finish at Rs7,000.00/share. Companies that booked highest losses were Unilever Foods, down Rs200.00 to close at Rs7,300.00/share, and Pakistan Tobacco, down Rs81.01 close at Rs1,914.28/share.

Hascol Petroleum recorded the highest volumes with a turnover of 14.356 billion shares, whereas the scrip lost Rs1.44 to end at Rs20.96/share. The lowest volumes were witnessed in WorldCall Telecom recording a turnover of 4.057 million shares. Its scrip lost Re0.05 to end at Rs0.89/share.