Pakistan Stock Exchange experiences bloodbath, benchmark sheds 937 points in intra-day trading

Published May 13, 2019
A stockbroker reacts as monitor share prices during a trading session at the Pakistan Stock Exchange (PSX) in Karachi. — AFP/File
A stockbroker reacts as monitor share prices during a trading session at the Pakistan Stock Exchange (PSX) in Karachi. — AFP/File

The Pakistan Stock Exchange (PSX), a day after the government announced a $6bn International Monetary Fund (IMF) package, experienced a bloodbath on Monday, with the benchmark KSE-100 Shares Index shedding 937 points — a loss of more than 2.7 per cent — during intra-day trading.

Trading opened at 34,716 points and showed an upward activity for a few minutes before adopting a negative trajectory for the rest of the session.

Take a look: Pakistan reaches agreement with IMF, to receive $6 billion over 3 years

The market closed at 33,900 points down 816 points or 2.4 per cent. The benchmark touched a day's high at 35,228 points up 512 points during first few minutes of the session. It touched a day's bottom at 33,779 points down 816 points or 2.4pc near the end of the session.

As many as 89.9 million shares of the benchmark companies, worth Rs4.7 billion, changed hands during the session.

The K-Electric Limited (KEL) led the most active stocks as 9.8 million shares changed hands. Its shares lost 5.69pc of their value. The Maple Leaf Cement (MLCF) followed with 7.1m shares whereas its shares lost 4.98pc of their value. The Bank of Punjab (BoP), Pakistan International Bulk Terminal Ltd (PIBTL) and Unity Foods Limited (UNITY) followed with 6.8m shares, 6.5m shares and 4.7 m shares changing hands. Their shares also lost value by 6.5pc, 8.2pc, and 8.4pc respectively.

Mohammad Faizan, an analyst and head of foreign institutional sales at the Next Capital Limited, held the tough conditions attached with the IMF bailout package responsible for bearish rule at the bourse.

"As a result of the attached conditions by the IMF, heavy taxation is to be slapped on the consumers to improvise the target collection by a further PKR650-700bn triggering further inflationary pressures and slowing down economic growth."

He added that daily traded value for the 100 Index increased to $33.6mn from $10.9mn in the previous session.

Another senior analyst Ahsan Mehanti also shared the same views. "Investors fear impact of prior actions and agreed conditions in the upcoming budget, leading to increase in taxes and utility prices to obtain a 39-month Extended Fund Facility (EFF) for $6b," the analyst said.

"The agreement is subject to IMF Board approval and timely implementation of economic policies to resolve low growth, high inflation, high indebtedness and weak external position," he added.

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