Delayed IMF talks results in carnage, PSX sheds over 1,100 points

The Pakistan Stock Exchange witnessed a bloodbath on Tuesday as the benchmark KSE-100 Index shed 1,378.54 points, or 3.47 percent, as a result of institutional selling with the country also facing a tough set of IMF conditions and political uncertainty.

By the time this tumultuous session ended, the KSE-100 Index was recorded at 38,342.21 against the previous day’s level of 39,720.75.

Meanwhile, the latest losses mean the market has shed 2,461.68 points during the last three sessions while the total loss during the current calendar year now stands at 6.01 percent after closing at 40,420.45 on Dec 30 – the last business day of 2022.

According to Ali Nadeem, who is Head of Sales at the First National Equities Limited (FNEL), this selling pressure was a product of redemptions called from mutual funds.

However, he did not rule out other factors like a tough set of conditions from the IMF and political uncertainty.

Political uncertainty and the IMF’s latest demand of collecting an additional revenue of Rs200 billion coupled with the pressure to deal with the circular debt and adhering to a free-floating exchange rate are certainly the constant reasons, keeping the market under pressure, said Nadeem.

But the Tuesday’s bloodbath was mainly triggered by institutional selling as investors wanted to withdraw their investments made through the mutual funds, he added.    

When asked why investors went for disinvestment, his replied that low returns or losses amid political uncertainty were the reason as they opted for investing their money somewhere else.

On Tuesday, the overall market volume stood at 25.59 million shares as a total of 339 stocks were on offer with 282 of these declining and 34 registering an increase while 23 remained unchanged.

There was further decrease in market capitalisation which touched Rs6.13 trillion (Rs6,134,384,355,763) against the previous level of touched Rs6.33 trillion (Rs6,333,691,588,266) after Tuesday’s trading of value Rs6.71 billion (Rs6,710,843,525).

As far as the KSE-100 Index is concerned, its volume was recorded at 12.58 million shares after the trading of 92 entities’ stocks. During the process, the share prices of 78 was down, five made gains and three did not see any change.

The top five volume leaders on the KSE-100 Index were K-Electric 29.91 million, Sui Northern 9.69 million, Pakistan Petroleum 8.64 million, CNERGY 8.10 million, and Oil and Gas Development Company 5.11 million.  

When comes of those witnessing a decline in their share prices, the worst performers included Habib Bank Growth Fund 13.53 percent, K-Electric 8.81 percent followed by 7.50 percent each in the case of  Pakistan Tobacco, TRG and Fatima Fertilizer.

Moreover, Air Link Communication and Pakistan State Oil were down by 7.45 respectively and 7.43 percent respectively.

However, the share price of Pakistan Services Limited was up by 5.09 percent, Nestle 3.63 percent, EFU General Insurance 2.13 percent, Bannu Woolen Mills 1.53 percent, and First Habib Modaraba 1.11 percent.

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