PSX sheds weight on SECP notices and Trump's decisions

KARACHI: After surpassing the 50,000 point barrier last week the Pakistan Stock Exchange on Monday witnessed a correction of sorts, with the benchmark index shedding nearly 1,000 points.

While global markets reacted negatively on the back of recent decisions taken by US President Donald Trump, in Pakistan the market also witnessed a negative trend due to show-cause notices issued by Securities and Exchange Commission of Pakistan (SECP).

According to market sources, the SECP issued notices to over twenty brokers for providing margin trading facility to their customers.

This news created panic in the market and investors opted to close their positions.

Margin trading is a facility offered by a broker, which allows investors to trade five times beyond the amount of his earnest money.

The issue was raised by MD PSX during an interview with Geo Pakistan, in which he had asked investors not to indulge in leveraged business.

Market insiders added that besides the show-cause notices the Pakistan Stock Exchange also reacted to US President Trump’s measures which caused jitters in markets across the world.

However, “after a long run [the] market was due for a correction,” said Zeeshan Afzal, Research Head, Insight Securities, before adding that it was triggered on the back of SECP notices and Trump’s gamble