Pakistan Stock Exchange (PSX) was recently included in Morgan Stanley Capital International (MSCI) emerging-market index, which increased the hopes that additional investments will be flowing in. However, on the day of its inclusion PSX lost more than 1,800 points – the biggest in the history of the market.
The market had barely recovered from that loss when it was hit by the political drama. According to reports, Prime Minister Nawaz Sharif was summoned by the Joint Investigation Team (JIT) probing Panama Papers scandal. As expected, investors reacted to this news negatively and the market suffered losses as it went down by 1,855 points on Monday losing 3.7% to close the day at 47,672 points, with a market high of 49,527 points.
During the trading session, 50 million cement shares changed hands, whereas a total of 62.6 million shares were traded with a total worth of PKR 6.8 billion. During the session, shares of 383 companies were traded, of which 339 lost value, 32 gained and 12 companies remained unchanged. Habib Bank was down by 3.2% whereas Oil and Gas Development Co. and Engro Corp were down by daily 5% price movement limit.
With prevailing uncertainties over the outcome of the JIT report, acute panic in the market is visible. During the month of Ramadan, market was already slow as timings are cut short. Head of International Sales at Intermarket Securities Gohar Rasool said “the market has lost its mojo with low volumes due to the Ramadan effect and lack of triggers.”
Since no one thought that JIT would summon the prime minister, the market response to this uncertainty was quite obvious. Nawaz Sharif has been summoned by the JIT on Thursday, June 15 to investigate the allegations levelled against his family. PM’s son Hussain Nawaz has already appeared before the JIT.
About The Panama Papers Case
The Supreme Court of Pakistan ordered an investigation about the four offshore companies registered in British Virgin Islands, as these companies were used by the Sharif family to purchase apartments in London. It is important to mention here that the Sharif family has dismissed these allegations as baseless and claimed that they have acquired the properties legally.
The month of June has been harsh on Pakistani market as foreign investors are selling their stocks and till now stocks worth $372 million have been sold by foreign investors.