SECP freezes share prices as KSE tumbles

Brokers attributed the colossal decline in stock markets to the dreary position of local and foreign investors mainly because of discouraging political developments in the county coupled with economic woes, like trade deficit soared by 49.19 per cent, current account deficit jumped up by 24 per cent to US$ 1.10 billion in July-08, declining forex reserves and liquidity crunch that kept haunting the equity markets.

This aggravated foreigners concern over the country’s economic stability as they remained net sellers, they added.

Brokers said that gradual but consistent outflow of portfolio investment was a major blow for the equity markets of the country.

They said that the local investors contentedly invest at stock market when they see the portfolio investment pouring in the country.

‘The outflow of huge foreign investment from the stock market is very upsetting because it has further shattered the confidence of local investors’, a stock broker said.

He said the political uncertainty was triggering foreign investors sentiments but the worst may be over by September 6 after the election of President and it may help in restoring confidence among local investors.

Analysts were of the view that offloading by foreign funds has been at the heart of recent fall in Pakistan equities. Though the quantum of selling is not huge, but due to low volumes and uncertain political and economic conditions, it made a huge negative impact on share prices.

So far in calendar year 2008, foreigners have sold shares worth US$2.7bn and bought shares of US $2.3bn. Thus a net selling of US$396m according to NCCPL data. However, majority of this selling occurred in last 3 months where they sold out shares valuing US $233m on net basis.

Analysts said that swift resolution of the outstanding political issues is likely to help reverse the prevailing bearish sentiments.

Analysts said that selling of OGDCL stake in Qadirpur gas field and expected announcement on coming days from Saudi Arabia regarding the US$5-6 billion oil facility against deferred payments, among the good signs that will support the economy of the country and markets as well.

Zeal Pak topped the volume list with 12.8mn shares, its shares declined by Rs 98 and closed at Rs 1.16.

Oil and Gas Development Authority (OGDCL) losing Rs 5.15 closed at Rs 97.93 with 9 m shares.

NIB declined by Rs 5 closed at Rs 8.45 with 7million shares, while Arif Habib Securities plunged by Rs 63 winded up at Rs 12.05 with 5.9m shares.