Punjab affairs results in panic, KSE-100 Index down 372 points

The Pakistan Stock Exchange (PSX) witnessed huge losses on Friday, the last business day of the week, as political uncertainty multiplied in the country after Chief Minister Parvez Elahi advised Governor Baligh-ur-Rehman to dissolve the Punjab Assembly.

By the time trading was closed, the benchmark KSE-100 Index was recorded at 40,323.45 – a 480.44 points drop against the previous day’s value of 40,803.89.

Earlier on Thursday, the panic created by the National Savings to increase the return rate pulled the market down as the nearly lost the gains made in earlier in the day after going up by around 450 points.

It means that positive news coming out of the UAE about rolling over the existing loan of $2 billion and provision of another $1 billion as well as Saudi Arabia financing $1 billion oil for Pakistan couldn’t create positive sentiments in the market.

The advice about dissolving the Punjab Assembly came during a night which also saw the Sindh government postponing the local government elections in Karachi after different factions of the former Muttahida Qaumi Movement merged into MQM-P, a coalition partner at the Centre, which demanded delaying the polls over the delimitation issue.

Analysts and media commentators are of the view that the dissolution of the Punjab Assembly would be followed by the Khyber Pakhtunkhwa Assembly and uncertainty would prevail. The federal government may also be forced to dissolve the National Assembly and a caretaker government would not have the authority to negotiate with the International Monetary Fund (IMF) for the completion of the much-needed ninth review.

But they are missing a simple question: Will the real decision makers and political leadership of the country allow the removal of government and new elections to sustain political uncertainty for months to come during which default is also possible? The answer is no.

During the session, sectors like oil and gas exploration as well as marketing, technology and communication, refinery, fertilizer and cement were under selling pressure.

On Friday, the market capitalisation was recorded at Rs6.42 trillion (Rs6,424,208,930,150) when compared with the previous day’s level of Rs6.51 trillion (Rs6,506,008,334,154) with the shares worth Rs4.63 billion traded during the session.

During the session, the total volume of the benchmark KSE-100 Index was 66.45 million shares against 83.92 million shares traded Thursday.

Shares of 92 companies included in the benchmark index were traded Friday out of which 75 registered a fall, 15 recorded an increase, and three remained unchanged.

As far the volume leaders are concerned, the top five entities were: Pakistan Petroleum 12.90 million, CNERGY 7.55 million, Oil and Gas Development Company 6.47 million, Lotte Chemical 5.84 million, and K-Electric 4.43 million.  

Among the worst performers, the share price of Pakistan Petroleum was down 6.82 percent followed by Rafhan Maize Products 5.73 percent, Oil and Gas Development Company 5.45 percent, Pakistan Telecommunication 3.88 percent and Nestle 3.42 percent.  

On the other hand, the shares of five best performing companies during the day were: EFU General Insurance 3.30 percent, Lotte Chemical 2.07 percent, Murree Brewery 1.99 percent, Standard Chartered Bank 1.71 percent, and Faysal Bank 1.63.

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