Shares at the Pakistan Stock Exchange (PSX) were trading in the red on Thursday, with analysts saying investor sentiment was weighed down by news of the country’s largest bank, Habib Bank Limited (HBL), facing secondary liabilities in a terror financing case in the United States.
The benchmark KSE-100 index was at 41,096.75 points at 12:15 pm, down 338.38 points, or 0.82 percent.
First National Equities Limited Director Amir Shehzad said the stock market was under pressure due to HBL-related news.
A day earlier, a US judge observed that the bank “faces secondary liability under the Justice Against Sponsors of Terrorism Act as a party that aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism”, according to a Bloomberg report.
The plaintiffs “sufficiently allege that the bank knew its customers were ‘integral to al-Qaeda’s overall campaign of terrorism, carried out directly and by proxy’, which is sufficient to allege general awareness.
“The complaints also show that the bank ‘knowingly and substantially’ helped ‘al-Qaeda and its proxies evade sanctions’ and engage in terrorist acts’,” the report quoted the judge as saying.
Shehzad also noted that it was a rollover week — when the future contracts are to be settled or rolled over to the next month — during which the PSX usually comes under selling pressure.
Besides, he added, there were “issues” on the political front. He advised investors to adopt a buy-on-dip strategy.
Former PSX director and AKY Securities CEO Ameen Yousuf also agreed with Shehzad’s view. “This is a rollover week and the news related to Habib Bank’s terror financing [case] is a bad indicator for the market. It appears that the market will remain [in the red] today and tomorrow unless there is a positive trigger,” he said.
Factors that would influence the market included new Finance Minister Ishaq Dar’s policies, the exchange rate and inflows. Even though the World Bank and other institutions had announced support, inflows had not been received yet, Yousuf said, adding that sentiments would improve once that happened.
Arif Habib Corporation Director Ahsan Mehanti said the index was bearish because of political noise, while investor concerns about flood-induced losses and a record surge in Pakistan dollar bond yields played the role of a catalyst.