Pakistan’s stocks fell the most in more than 14 months after a government coalition partner endorsed a planned protest calling for electoral reforms.
The KSE 100 Index (KSE100) of 100 companies traded on the Karachi Stock Exchange fell 2.1 percent to 16,451.39 at 2:48 p.m local time. The gauge is headed for its biggest drop since Oct. 19, 2011. Oil & Gas Development Co. (OGDC), the nation’s biggest oil and gas explorer, sank the most in a year. MCB Bank Ltd. (MCB), Pakistan’s biggest lender by market value, sank to a three-week low.
Muhammad Tahir-ul-Qadri, a religious scholar and former lawmaker who returned to Pakistan last month after a five-year stay in Canada, is planning a “million-man march” in Islamabad on Jan. 14 to call for electoral reforms. The plan was endorsed yesterday by the Muttahida Quami Movement, a Karachi-based coalition partner of the ruling party.
“Political noise has increased as the planned march can destabilize the political transition process,” said Faisal Bilwani, head of equity sales international at Elixir Securities Pakistan Pvt Ltd in Karachi. The current government’s term ends in March.
The KSE 100 has fallen 2.9 percent in the past three days since closing at a record of 16,943.19 on Dec. 28. Its 14-day relative strength index, which measures how rapidly stocks have risen or fallen in that period, rose to 72 that day, above the 70 level that some investors use as a signal to sell.
The gauge trades for 6.8 times estimates for this year’s earnings, down from a three-month high of 7 on Dec. 31, according to data compiled by Bloomberg. The KSE 100 surged 49 percent last year, the most since 2009.
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