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Crisis Investing: Pakistan ADRs are plummeting

Posted January 2, 2008

Baltimore — (TFN): Pakistan's Karachi Stock Exchange again closed sharply lower today, for the third sharp drop following the death of opposition leader Benazir Bhutto.

further drop in the karachi stock exchange

The benchmark KSE-100 Index finished the day at 13,353.38, down 313.05 points or 2.3 percent.

For the first time since the killing, Pakistani ADRs reflected that downwar pressure in the market: The share prices of electricity provider Hub Power Co. (HUPOF, down 5.35%), top Pakistani banks MCB Bank Ltd. (MCBBI, down 5.36%) and United Bank Ltd. (UDBKL, down 5.37%), Oil & Gas Development Co. Ltd. (ODVCI, down 5.34%), and already battered telecommunications giant Pakistan Telecommunication Co. Ltd. (PKTMF, down another 5.35%) all reflected Monday's precipitous market drop.

Today's decline in the Karachi stock indexes still has to work its way into the ADR prices. We believe the after-effects of this terrorist act will bottom out early next week, at which point crisis investing bargain hunters should be ready to snap up depressed share at at least 10% discounts.

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