Since the news circulated about Pakistan’s inclusion in MSCI-EM Index or even before that Pakistan’s stock market was performing really well, there was a gradual increase in points to KSE-100 index seems perpetual increase.
But on Thursday, PSE saw worst decline on a single day, on Thursday first day of MSCI-EM index entry, the KSE-100 plunged to 48,780.81 points removing 1810.76 points from the index in one day.
It was witnessed that foreign investors were the main sellers who sold equities of worth $16.5 million.
However, the overall index was dropped to 48,359.90 points which was down by 2231.67 points, it regained the value because some of the investors started buying due to the dip in selected stock prices. The market capitalization was dropped by Rs. 653 billion.
Trading activity on Thursday remained low changed from 410.82 million shares to 403.94 million shares as compared to previous day on Wednesday. Out of 394 active stocks, 352 were closed in negative and 35 in positive while 7 stocks remained unchanged.
K-Electric was the volume leader on Thursday with 49.818 million shares. However, it lost Rs 0.38 to close at Rs 6.94. Bank of Punjab (R) also lost and closed at Rs 1.15, down Rs 0.21 with 27.603 million shares. Power Cement (R) dropped by Rs 0.35 to close at Rs 2.05 with 23.717 million shares.
Wah Noble and Shezan International were the top gainers with Rs 8.55 and Rs 9.96, respectively to close at Rs 306.20 and Rs 440.06.
Rafhan Maize and Wyeth Pak were the top losers with Rs 108.33 and Rs 95.07, respectively to close at Rs 7,191.67 and Rs 2,213.77.
One of the leading analysts in stock market, Muhammad Sohail, CEO of Topline Securities said that the index went down by 4.4 percent, this was the second worst fall in three year time since Aug 11, 2014 when the market plunged by 4.5 percent. However, it was worst-ever single day point decline. Previously, the market dropped by 1,419 points, 4.1 percent on Aug 24, 2015 when China took a strange decision to devalue yuan.
All major Banks including HBL, MCB, UBL and Oil and Gas companies including PSO, OGDC, PPL witnessed dropped by 3.8 to 4.8 percent.
WHY THIS IS HAPPENING
This sudden declined can be classed as reshaping, as Pakistan is entered in MSCI index, investors are selling stocks in the market to regain capital to invest in other markets like MSCI-EM. Since, MSCI-Emerging markets index is performing well since 2016 and it is likely to improve further with Pakistan’s inclusion.