1. GUMM
  2. Annus Horibilis
  3. The Inhumanity of Pakistan’s Coal Industry
  4. Iran Nuclear Deal The U.S Withdrawal
  5. Method in the Madness
  6. Legal System Reforms
  7. Power Over Impulse
  8. Refugees and Migrants are People too
  9. PTCL – A Nonstop Journey Towards Excellence
  10. Gulgee – The Last of The Greats
  11. Patrik Hoffmann – Sonraj
  12. Pakistan’s Primordial Hindu Heritage
  13. Pakistan’s Migrant Tragedy
  14. PTCL – Fastest Growing Brand in Pakistan
  15. Keep Pakistan’s Wagon Hitched To The China Star
  16. Anique’s Chocolate Cake
  17. Selfless & Fearless – Lahore Qalandars
  18. NEWS PICKS
  19. Intellectual Property and Tourism
  20. Fitness with the Mughal
  21. REBEL WITH A CAUSE
  22. The Big Fat Lie – Cholesterol (Part-1)
  23. Mummy’s Recipes Roast Chicken & Veg
  24. ENGAGING HEADS HEARTS AND HANDS
  25. The Big Fat Lie – Cholesterol (Part-2)
  26. Q & A with Star of Parchi
  27. Addressing Sexual Abuse
  28. Q & A with EMAN ZAEEM & MEHR SAAD
  29. Pakistan’s Lost Children
  30. ENGLAND AND THE INDUSTRIAL REVOLUTION
  31. STICK WITH FRIENDS AND DITCH THE ENEMIES
  32. The Phenomenon that Stephen Hawking was!
  33. In Conversation with ANUSHAY ZEESHAN
  34. Q & A with owner of District 6 – Anum Rafat
  35. Ali Rehman Khan – Naturally A Star
  36. MUNIBA`S Call for Tolerance & Justice
  37. Q&A Muniba Mazari
  38. Health Quotient (Dental health)
  39. Money for nothing, bits for free
  40. FinTech
  41. TRADING THREATS OF WAR
  42. Crisis of Civilization
  43. Child Sexual Abuse
  44. Education is the only Solution
  45. Fit for Purpose
  46. BLUE CHIP TALKS TO THE CREATOR OF TEETOO AND TANIA
  47. Mini meringue recipe
  48. NEW ANIMATED TV SERIES PAKISTANI
  49. Changing the Perception of Public Transport Motorway Express
  50. AUSTENISTAN DEBUTS WITH ELEGANCE AND ENTHUSIASM
  51. PAKISTAN’S WOMEN OF 2017
  52. THE BEAUTY IN BUSINESS
  53. PERCEPTIONS ARE ALSO REALITY
  54. Blue Chip Q/A with Atiqa Odho
  55. Five major political events of 2017
  56. WHAT DOES TRUMP’S TWEET MEAN FOR CPEC AND THE REGION
  57. THE GLOBAL ECONOMY IN 2017
  58. AFGHANISTAN GOING DOWNHILL
  59. 2017 FOR PSX – THE CLIMB AND THE DECLINE
  60. What we can learn from Ghalib
  61. QUINOA SALAD WITH THAI DRESSING
Wed, Aug 15, 2018
  1. GUMM
  2. Annus Horibilis
  3. The Inhumanity of Pakistan’s Coal Industry
  4. Iran Nuclear Deal The U.S Withdrawal
  5. Method in the Madness
  6. Legal System Reforms
  7. Power Over Impulse
  8. Refugees and Migrants are People too
  9. PTCL – A Nonstop Journey Towards Excellence
  10. Gulgee – The Last of The Greats
  11. Patrik Hoffmann – Sonraj
  12. Pakistan’s Primordial Hindu Heritage
  13. Pakistan’s Migrant Tragedy
  14. PTCL – Fastest Growing Brand in Pakistan
  15. Keep Pakistan’s Wagon Hitched To The China Star
  16. Anique’s Chocolate Cake
  17. Selfless & Fearless – Lahore Qalandars
  18. NEWS PICKS
  19. Intellectual Property and Tourism
  20. Fitness with the Mughal
  21. REBEL WITH A CAUSE
  22. The Big Fat Lie – Cholesterol (Part-1)
  23. Mummy’s Recipes Roast Chicken & Veg
  24. ENGAGING HEADS HEARTS AND HANDS
  25. The Big Fat Lie – Cholesterol (Part-2)
  26. Q & A with Star of Parchi
  27. Addressing Sexual Abuse
  28. Q & A with EMAN ZAEEM & MEHR SAAD
  29. Pakistan’s Lost Children
  30. ENGLAND AND THE INDUSTRIAL REVOLUTION
  31. STICK WITH FRIENDS AND DITCH THE ENEMIES
  32. The Phenomenon that Stephen Hawking was!
  33. In Conversation with ANUSHAY ZEESHAN
  34. Q & A with owner of District 6 – Anum Rafat
  35. Ali Rehman Khan – Naturally A Star
  36. MUNIBA`S Call for Tolerance & Justice
  37. Q&A Muniba Mazari
  38. Health Quotient (Dental health)
  39. Money for nothing, bits for free
  40. FinTech
  41. TRADING THREATS OF WAR
  42. Crisis of Civilization
  43. Child Sexual Abuse
  44. Education is the only Solution
  45. Fit for Purpose
  46. BLUE CHIP TALKS TO THE CREATOR OF TEETOO AND TANIA
  47. Mini meringue recipe
  48. NEW ANIMATED TV SERIES PAKISTANI
  49. Changing the Perception of Public Transport Motorway Express
  50. AUSTENISTAN DEBUTS WITH ELEGANCE AND ENTHUSIASM
  51. PAKISTAN’S WOMEN OF 2017
  52. THE BEAUTY IN BUSINESS
  53. PERCEPTIONS ARE ALSO REALITY
  54. Blue Chip Q/A with Atiqa Odho
  55. Five major political events of 2017
  56. WHAT DOES TRUMP’S TWEET MEAN FOR CPEC AND THE REGION
  57. THE GLOBAL ECONOMY IN 2017
  58. AFGHANISTAN GOING DOWNHILL
  59. 2017 FOR PSX – THE CLIMB AND THE DECLINE
  60. What we can learn from Ghalib
  61. QUINOA SALAD WITH THAI DRESSING

For the market, Uncertainty is worse than bad news

When it comes to Pakistan, there is no better word to describe it than ‘unpredictable’. No stranger to ups and downs, whether its sports, politics or any other domain, the charts of this country are always in a frenzy. However, of late, Pakistan’s financial markets has been quite a focal point for the world. Since the birth of the Pakistan Stock Exchange (PSX) – that absorbed three main markets into one – stock shares have witnessed bullish trends on continuous basis. With a market cap of 98 billion USD and listings of more than 560 companies, the PSX provides a rock solid economic image of Pakistan. But the continuous rise and fall of this market creates a number of questions that prove to be a mystery. This unpredictability in Pakistan’s financial market gives the market fraternity two separate angles to deliberate upon: The High and The Low.

 

The Climb

 

In 2016, the PSX provided the highest returns on equity investments by any market across Asia. This was a stunning 46% in one fiscal year. It was predicted by market pundits that the index would climb another 8,300 points, and reach a scorching 54,000 points by December.

 

Till the month of May 2017, the benchmark  of the KSE-100 index hit an intra-day all-time high at 53,124 points, a marginal increase of 11% from the start of the fiscal year. But then the market came tumbling down like a house of cards. In just another 16 trading sessions, soon after the hype the market made a steep decent of 16% to shed 6265 points. However, hopes got another lifeline, as ahead of Pakistan’s reclassification into an MSCI Emerging market from a Frontier Market, the PSX raised back.

 

Even the PSX management made preparations and announced extra-time sessions to accommodate the heavy increase in activity. But as the trading drew to an end in March, investors were bamboozled to see net outflows of $81.7million. But the question posed was, what went wrong?

 

Scores of delegations of big brokerages, mutual funds, major listed companies and officials of PSX had trotted the globe, from Wall Street to Hong Kong, before June to gauge the interest of MSCI passive funds in Pakistan.

 

Every single person was enthusiastic over foreign inflows on the eve of Pakistan regrouping as an Emerging MARKET (EM). However, no one had foreseen that Frontier Market Funds, which retain heavy investment of around $7 billion in the PSX, would go on a selling frenzy.

 

The buying activity of some companies like ‘Topline Securities’ went up to $452 million while their selling activity was at $534 million. This took the benchmark KSE-100 index on a nose dive to a record single day decline of 1,811 points, or 3.58%.

 

Overall six companies managed to qualify for the main emerging market index. These included the renowned Engro Corporation, Habib Bank, Lucky Cement, MCB Bank, Oil and Gas Development Company and United Bank Limited.

 

In anticipation of this outlook of the market mutual funds, banks, companies, stockbrokers and individuals began to build up positions changing the numbers immensely to the cue of the reaction seen in the Dubai and Qatar equity markets, which had received buy orders of $469m and $160m between the MSCI inclusion announcement on June 2013 and the actual inclusion on June 2014

 

 

The Decline

 

It is often said that ‘everything that goes up, must come down’ and that is exactly what these anticipated lot of people and companies alike had to face. These fate guided people who had the six heavyweight stocks in anticipation of selling them to foreign funds at a higher price had carried market prices to unsustainable levels. However, in Pakistan instability is something that is consistent.

 

At the peak of the market, the following six companies that qualified for the emerging market index had the following values: UBL stock was priced at Rs260, HBL at Rs305, Lucky Cement Rs 962,  OGDC Rs 187, MCB at Rs 247 and Engro Corporation at Rs 399 a share.

 

Now these six major companies saw a major blow dealt to them by investors who began unwinding their positions due to the lack of interest shown in Emerging Market funds. This saw these six companies now face a steep decent of UBL to Rs 222, HBL to Rs 260, Lucky Cement to Rs 826, OGDC to Rs 141,  MCB to Rs 208 and Engro Corporation to Rs 335. As these six major companies had a heavy margin of almost 70% in the KSE-100 index, they dragged the whole market down with them. From its record all timehigh of 53,124 points in May, the KSE-100 index plunged 6,265 points or 11.79%. Stockbrokers who had accumulated mainly the six big shares but failed to sell-off on time were left stranded at the bottom of the abyss.Whether the present government stays or falls, the fact is that everyone knows that stock markets all over the world hate uncertainties, and so do the economy and the common people.

 

By: Ahmad Nawaz

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