Market Close !

Pakistan equities closed down 2.1% on fears of Dubai crisis spillover and reports of FII selling on first day of trading after EID holidays. Locals continue to remain cautious that is evident from lackluster volumes trading less than 75mn shares. United Bank UBL PA, possibly the only listed entity with direct exposure to Dubai World and likely to witness a marginal impact due to recent Dubai debt standstill dampened the mood in early trading. UBL's communiqué to the exchanges clearing up fears of a larger exposure and possible major hit brought no respite with stock closing at lower lock. Financials faced selling from both local and foreign investors with sector down over 3% barring ABL that hit upper lock intraday closing up 2.2% mainly on local interest. PSO that gains from yesterday's local retail petroleum price hike failed to resist broader market pressure closing marginally flat.

We expect today's fear of Dubai debt rescheduling led wider crisis on Pakistan stocks to subside over time. Possible positives on the political front such as the President relinquishing his powers to the parliament bodes well for sustained democracy. In our view the major concern remains the fluid security situation and lack of liquidity finding its way to the market.