The Pakistan Stock Exchange experienced a bloodbath on Tuesday as the benchmark KSE-100 Index as it shed 1,138.37 points (2.78 percent) – a trend triggered and sustained by the political uncertainty prevailing in the country.
At one point, the KSE-100 Index was down 1437.79 points at around 3:05pm as it moved between a range of 41,037.14 and 39,533.03 during the session.
When the session ended, the total volume of the KSE-100 Index stood at 128.22 million shares, an increase of 35.73 percent from the figures of 82.41 million shares exchanged Monday, amid the selling pressure.
Shares of 92 companies were traded on Tuesday, of which 82 recorded a fall in their prices, eight registered an increase and two remained unchanged.
Most of the negative contributors were from technology, commercial banks, oil and gas exploration, cement and fertilizer sectors which negatively contributed 625.19 points.
As far as the volume leaders are concerned, K-Electric topped the list with 19.98 million shares followed Cnergyico PK Limited 9.97 million, Unity Foods 6.39 million, Hub Power Company 6.23 million and Maple Leaf Cement 4.68 million.
The stocks that emerged as net losers during the day included: Pakistan Services Limited 7.49 percent, Abbott Laboratories 6.26 percent, Archroma Pakistan 4.47 percent, Nestle 1.69 percent and Mari Petroleum 1.50 percent.
On the other hand, the shares which gained the most during the session were: Rafhan Maize Products 2.33 percent, Colgate-Palmolive 0.86 percent, Habib Metropolitan Bank 0.75 percent, Packages Limited 0.32 percent and Fauji Fertilizer 0.24 percent.
These losses are a result of political uncertainty, especially the fears of dissolving the Punjab and Khyber Pakhtunkhwa assemblies, and rising political confrontation which have damaged investor confidence.
It was a continuation of what we had witnessed on Monday too when the KSE-100 Index registered a fall of 330.66 points while closing at 40,970.82.
Factors like rise of terrorism acts [situation in Bannu], worsening economic situation, pressure on the rupee, shortage of dollars and the delay in the completion of the International Monetary Fund’s (IMF) ninth review are also complicating the affairs.
Experts say market players are looking for political stability before assuming fresh positions as they wait for positive news on political front and the regarding IMF programme, which will restore investors’ confidence.
“A lot of issues have accumulated, including dollar shortage, but the main reason remains political uncertainty and the impending dissolution of [two provincial] assemblies. There is pressure on foreign reserves as well,” First National Equities Limited Director Amir Shehzad commented.
Meanwhile, political affairs are heating up in Pakistan as Punjab Governor Baligh-ur-Rehman asked Chief Minister Parvez Elahi on Monday to take a vote of confidence.
Simultaneously, the PML-N and PPP provincial lawmakers, just hours later, submitted a no-confidence motion in the Punjab Assembly.
The move comes as the PML-N-led alliance was already working on both the options to counter PTI Chairman Imran Khan’s announcement of dissolving the Punjab and Khyber Pakhtunkhwa assemblies. If Parvez Elahi fails to secure the vote of confidence, he would lose the power to dissolve the assembly.
As far as the governor asking for vote of confidence is concerned, he summoned the assembly session for the purpose at 4pm on Wednesday [December 21].
The governor’s initiative requires the chief minister to prove his majority in the House, while it’s for the opposition show a majority in case of vote on the no-confidence resolution.
Baligh-ur-Rehman summoned the Punjab Assembly session under Article 130(7) of the Constitution. He said it was a matter of public knowledge that the chief minister had lost the confidence of his party President Chaudhry Shujaat Hussain and the members of his own party belonging to the Punjab Assembly.
He also cited serious differences of opinion between the PML-Q and the PTI as well as Parvez Elahi’s statement in a television programme, in which he openly criticised Imran.