On Saturday, the U.N. nuclear watchdog announced Tehran had met its commitments to curtail its nuclear program and the U.S. was prompt in revoking the sanctions. These moves were not unexpected and the stock investors were mentally ready for such news.
In Pakistan PSX-100 took a nose dive and lost more than 1,000 point soon after opening of the market. It was much anticipated that with enhanced export of crude oil, its price will erode. Selling in E&P companies was anticipated but the phenomenon was not unique to Pakistan.
In Pakistan the general perception is that foreign fund managers are on selling spree. Prices of scrips in which foreign funds have huge investment (OGDC, PPL and POL) are down but the volume in their shares is still not very high. Bulk of the volume is still being contributed by second and third tier companies.
At the time I am posting this update the market has already recovered nearly half of the lost points. I am of the view that as the day proceeds those feeling jittery will gather the courage. Historically, at such junctures institutional investors step in and buy at bargain price.
Therefore, my suggestion to the investors is ‘not to panic’, keep a close watch and enter the market at appropriate time.