Daily Times

Karachi: Pakistan stocks posted steepest fall  on Tuesday since May 14, 2018, following 4 percent  of devaluation of Pak Rupee against US$ which failed to entice investors. The benchmark KSE 100 index dropped 702 points to close at 43229 level.

“Stocks fell across the board amid slump in rupee parity and surge local POL products prices. Foreign outflows, uncertainty in rupee dollar parity on concerns for falling FX reserves and debt repayments, rupee devaluation weakening earnings outlook and concerns for dismal economic outlook played a catalyst role in panic selling at PSX”, Ahsan Mehanti, senior analyst commented.

Investors also fear that devaluation and call to further devalue will likely push up the interest rates and will eventually rein in on aggregate demand.

“Pakistan imports continue to rise as last two devaluations have yet to make any noticeable impact on the over?all import bill, thereby raising the question, ‘is devaluation really the solution”, analyst at Topline Securities said.

Investors’ sentiment remained bleak across the board, while disappointment was more striking in banks and cement sector.

Total traded volumes/values was down 14 percent /23 percent , respectively during the trading session.

Amongst the major sectors, Cement, Bank, Oil & gas marketing, Fertilizer, Automobile and Exploration & Production Sectors withheld 519 points from the index.

As per the latest figures, Pakistan auto sales registered growth of 5% YoY in May 2018 to clock in at 21,813 units, which was largely in line with expectations.

Cumulatively, in 11MFY18, car sales grew by 21% YoY to 240,114 units by strong growth seen by various auto assembler driven by rising auto financing and various cab schemes and improved macros.

Analysts expect that the market will remain choppy with flows from local and foreign institutions directing the market.

Published in Daily Times, June 13^th 2018.