The KSE-100 index registered heavy loss of 8.7 percent on month-on-month basis in February 2011, analysts said. The benchmark KSE-100 declined by 1070.13 points during February 2011 and closed at 11,289.23 points from previous months closing of 12,359.36 points.
They said that row between Pakistan and the US over the Raymond Davis case, unrest in Middle East and slow downing foreign investments triggered the selling at the Pakistan's leading stock exchange during the outgoing month. The investors concerns over the political and economic issues kept them totally on the sideline, resultantly the average daily volumes drastically declined by 91 percent on month-on-month basis to 97 million shares in February as compared to January's average daily trade of 168 million shares.
The offshore players' activity also slow-down during February as the foreign investors' portfolio investment (FIPI) declined by 91 percent on month-on-month basis to stand at 5.5 million dollars.
"The 8.7 percent decline for KSE-100 index on month-on-month basis is the worst February showing in the last 20 years," an analyst at KASB Securities said. "While domestic and international politics was noisy, ongoing MENA tensions triggered rally in commodities, raising concerns on follow through impact on Pak macros," he said. More importantly, it fuelled concerns on continued foreign investment outflows from emerging markets spilling over to Pakistan, he added.
"The slow-downing foreign portfolio investment at the local equity market, unrest in the North Africa and Middle East and row between Pakistan and the US over Raymond Davis case invited heavy selling at the KSE during February 2011," Farhan Mahmood, senior analyst at Topline Securities said.