No time to wallow, just run with mired feathers

KARACHI: The Pakistan Stock Exchange (PSX) started the day in the red on Wednesday, falling some 800 points during the initial hour of trade, the downfall eventually arrested later in the day.

The market took a u-turn and closed trading at 47,603 points, reflecting an addition of 729 points. Relative to its day-low, the KSE-100 Index gained 1,600 points, the longest stretch in a day.

At the beginning, many expected a knee-jerk reaction due to the Panama case development. Some even positioned to take advantage of low share prices anticipated after the drop.

The market has been due for a correction for some time now, and the fall from its 27 January-high of 50,887 points to today’s low of 46,048 points is almost 10% in terms of correction.

Sohai Farooq, a broker at Munir Khanani Securities, believes that the Panama decision would be a short-term phenomenon, and the market will ride on going forward.

Zeeshan Afzal of Insight Securities, however, understands that going north without a financing facility would be a tough task. Panama case fears have kept investors cautious; once this matter is settled, it would bring clarity to the market. According to Afzal, even though the market offers healthy returns and Pakistan's inclusion in MSCI's emerging market would trigger a rally, a financing product is also needed.

Upon asking a small investor of the Panama decision's impact, which is scheduled for tomorrow, it was understood that it would be positive for the country and the market.