KSE-100 loses 5.6pc in 2011

KARACHI: Country's main stock index ended 5.6 percent weaker at 11,347.66 points and average daily volume fell to a 13-year low because of security and economic concerns and energy shortages.

The Karachi Stock Exchange (KSE) benchmark 100-share index gained 28 percent in 2010.

"Escalating macroeconomic concerns, sustained political tension, continuing law and order concerns and lack of positive sentiment came together to counter resumption of monetary easing and strong corporate earnings," AKD Securities said in a note.

The State Bank of Pakistan has cut its key policy rate by 200 basis points to 12 percent since July 1, but analysts said that did little to improve sentiment.

Foreign investors sold shares worth a provisional net $122.93 million in 2011, compared with the purchase of shares worth a net $515 million in 2010.

Violence in Karachi, country's biggest city and economic hub, a Taliban insurgency in the country's northwest and chronic power shortages have put off investors, analysts said.

At least 400 people were killed in July and August in violence in Karachi, and investors have started shunning the country's main stock exchange. (Reuters)