KARACHI: The stock market came under intense selling pressure on Friday due to an abnormal delay in announcements of election results and an apparent split mandate is unlikely to end the political instability the country has been passing through for almost two years.
Topline Securities Ltd said the market reacted negatively to delayed results where initial announcements showed no clear majority of a single party as a result the benchmark KSE 100 index plunged 2,362 points or 3.68 per cent intraday.
After the ECP announced more results towards the closing of trading and the news of a likely sovereign rating upgrade by Standard and Poor’s (S&P) to “B” from “CCC+” helped the market trim some losses.
Pak-Kuwait Investment Company Head of Research Samiullah Tariq told Dawn that the split outcome of the general elections has escalated investor concerns about the prompt formation of the new government, which is direly needed to deal with urgent and crucial issues including the balance of payments situation, circular debt management and rationalisation of power tariff, etc.
“The second review under the $3bn Stand-By Arrangement with the IMF is beginning this month of great significance to get the last tranche of $1.1bn under the current bailout package. A hung parliament, which seems obvious so far as per the available results, the installation of new political administration would take longer than usual dampened market sentiments,” he observed.
The business community was expecting the emergence of a strong government post-polls for the continuation of economic reforms undertaken by the caretaker government, but it didn’t happen.
However, he was of the view that the market may trade normally from next week as clarity will emerge on the country’s political future in a day or two.
As a result, the KSE-100 index closed at 62,943.75 points after losing 1,200.12 points or 1.87 per cent from the preceding session.
The overall trading volume fell 21.22pc to 258.07 million shares. The traded value also dipped by 12.43pc to Rs12.52bn on a day-on-day basis.
Stocks contributing significantly to the traded volume included Pakistan K-Electric (20.54m shares), Oil and Gas Development Company Ltd (18.93m shares), Pak Petroleum Ltd (17.86m shares) and Pakistan Refinery Ltd (14.88m shares) and WorldCall Telecom Ltd (13.40m shares). Foreign investors remained net buyers as they bought shares worth $2.19m.
Published in Dawn, February 10th, 2024
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