Stocks plunge as govt plans divestment in E&Ps
KARACHI: Following two sessions of minor gains, investors lost their cool on Thursday and jettisoned shares causing the KSE-100 index to plunge 479 points (1.6 per cent) and close at 30,159.
The exploration and production sector wiped off 155 points from the index as investors ran to dump shares in the Oil and Gas Development Company (OGDC) and Pakistan Petroleum Ltd (PPL) after the formal advertisement of the Privatisation Commission (PC) regarding divestment of government stake in both companies by 7pc and 10pc respectively.
That spooked the investors who believed that a sizeable increase in market float would result in further discounting price of two stocks. PPL hit its lower circuit while OGDC also closed near its lower limit.
Already jittery, the announcement by the PC could not have come at a worse time. Analysts said the retreat came amid lingering concerns on border tensions, the Financial Action Task Force uncertainties and the surging budget deficit, where missing revenue targets could result in a mini-budget to raise taxes to meet the International Monetary Fund quarterly reviews.